Pages: 7 profit.com.pk

ISLAMABAD

STAFF REPORT

PreSiDeNT Asif AliZardari has been ensuredby finance minister DrAbdul Hafeez Sheikh that

the country is safe on theeconomic front. He was briefedabout the overall economicsituation of the country along withvarious aspects of the economyand economic performance duringthe first five months of the currentfiscal year. Dr Hafeez also focusedon critical indicators likebroadening tax base, fiscalausterity, exports, remittances,imports and inflation. Heinformed as a result of difficulteconomic decisions taken by thepresent government, economy wasstable and various indicators wereshowing encouraging signs.He said efforts to broaden the taxbase have registered a significantsuccess. Up till 16th of December,rs712 billion tax had beencollected as against rs555 billioncollection during thecorresponding period, last year. itamounted to an increase of 28 per

cent over the corresponding periodand exceeded the target of 25 percent. On austerity measures,finance minister informed that thevarious measures adopted by thegovernment have also yieldedpositive results. Hesaid the budgetaryexpenditure duringfirst five months of theyear, which wasenvisaged to be 42 percent, was broughtdown to 38 per cent,indicating that thebudgetary controlmeasures weresuccessful. Despiteworldwide slump indemand, Pakistaniexports during firstfive months of thecurrent fiscal year haveregistered an increaseof 12 per cent over thatof the correspondingperiod last year. Onremittance side, anincrease of 18 per cent waswitnessed with $5.2 billionremittances for the first fivemonths of the current year, said

Sheikh. Finance minister alsoinformed that by the end ofDecember, the government wouldhave provided a total of rs100billion for developmental projects.This amount, he said, would be

spent on mega projectsin energy,communications andwater sector thereby,creating jobs andbuilding infrastructure.The energy projectsincluded Bhasha Damand Chashma PowerProjects, he informedthe President. ThePresident was alsoinformed that theimports during the firstfive months of thecurrent fiscal year haveregistered an increaseof 20 per cent over thecorresponding period oflast year indicating thatthe economic activitywas gradually picking

up and was on steady course.mr Zardari was briefed thatinflation has also come downduring the first five months of the

current fiscal year. ConsumerPrice index (CPi), which was 14per cent in November, last yearwas 10.2 per cent in November,this year. Similarly, Sensitive Priceindex (SPi) was also witnessingcontinuously downward trendduring past five weeks. The President inquired about thesteps taken for extending socialsafety net to the poorest of thepoor. it was informed that rs20billion would be provided for BiSPby the end of December whichwould benefit tens of thousands ofpoor families living below povertyline. He remarked theimprovements in economicindicators were encouraginghowever, efforts should continueto keep up the pace andmomentums of economic turnaround. He also said gas andpower shortages continue to hauntpeople and we need to step up ourefforts to meet these challenges.‘The prevailing internationaleconomic situation is not veryhealthy and efforts must continueto further stabilise the economyand to fight economic challengesfacing the country,’ he added.

ISLAMABAD

AMER SIAL

FACeD with rising criticism overthe slow pace of power sector re-forms the government on Thurs-day urged the board of directors

of the power distribution companies (DiS-COs) to exercise complete powers withoutany fear to expedite reforms which wereholding hostage the national economy.

Chairmen of all boards took the pleathat they were not fully empowered due towhich they were unable to address humanresource constraints, financial manage-ment issues, reduction in lines losses andimprovement in recovery. The governmenthad convened a special meeting with thechairmen of DiSCO boards and Chief ex-ecutive Officers to assess their perform-ance in the last ten months and reviewbusiness plans for the current fiscal year.

The National electric Power regula-

tory Authority (NePrA) was severely cas-tigated by the board heads on its failure totimely notify monthly fuel adjustmentcosts and yearly tariff. They complainedthat NePrA had failed to notify tariff forDiSCOs even though six months of the cur-rent fiscal year have elapsed. They de-manded immediate restructuring ofNePrA to address the woes of DiSCOs.

Finance minister Abdul Hafeez Sheikhand minister for Water and Power NaveedQamar assured complete support to DiSCOboards. However they stressed the boardsto take steps to improve governance in theentities for better service delivery to thecustomers. Addressing the meeting,Deputy Chairman Planning CommissionDr. Nadeem ul Haque said that the lossesincurred by the power sector have been amajor reason for increasing the fiscal deficitfrom estimated 4 per cent to over 6 per centof GDP for the last three fiscal years. Hesaid that the government has incurred

rs1000 billion in costs for providing sub-sidy during the last three fiscal years.

Nearly all the chairmen of boardssought powers to implement decisions tostart reformation of their entities. Head ofeconomic reforms Unit of ministry of Fi-nance Dr. Khaqan Najeeb pointed out thatthe boards needed no extra powers theywere empowered under the companies or-dinance 1984 to make decisions. However,chairmen of boards said no one informedthem that they could make decisions astheir management kept looking to the min-istry of Water and Power and defunct Pak-istan electric Power Company (PePCO) fordecisions. Finance minister quipped that ifthey would keep seeking power then theywould never get it. They were fully au-tonomous and should exercise powerswhich would establish their authority. Arepresentative of the World Bank said thatthe government and boards were passingthe buck to each other and in reality they

should work as a team to bring the powersector out of the crisis.

minister for Water and Power NaveedQamar asked the boards to take responsi-bility and ownership of their companiesotherwise they would not be able to per-form. He said boards will have to taketough decisions. The boards according tohim were responsible for policy while themanagement was responsible for imple-mentation. He asked the boards to fixbenchmarks for management to reward orpunish them based upon their perform-ance. Chairman ieSCO board mohsinKhalid said that the company was facedwith human resource constraints. He saidthat the company could not reward em-ployees on their performance as under thepresent rules CeO could not approve anyreward for employees. Former mD ofSSGCL munawar Basheer Ahmad saidwithout restructuring the service structureand introducing compensation packages

the efficiency of the employees of DiSCOswould not improve.

Proposing a solution, former mDPePCO Tahir Basharat Cheema said thatthe boards were fully empowered and theyshould de-link from the national pay scalesand notify their own pay scales that wouldresolve the problem. Dr. Nadeem ul Haquesupported his proposal and said that undercompanies ordinance 1984, boards wereempowered to notify new pay scales andhire new staff. Chairmen of all boards com-plained about political interference intransfers and postings by the ministry ofWater and Power and PePCO. However,the ministers said that they should notmake lame excuses as it was under theirpower to stop outside interference and takesteps to block interference. They said theywere full empowered, like any corporatesector entity to make and implement deci-sions as the board was responsible for theperformance of the company.

DISCO boards ignorant of their powersg Boards seek guidelines on their powers g Govt says boards fully empowered under companies ordinance 1984

Country is safeon economicfront: Dr Sheikhg Dr Sheikh briefs President Zardari

about overall economic situationg President appreciates

economic progress in FY11

PM directs petroleum ministryto resolve gas supply issues

ISLAMABAD

STAFFREPORT

Prime minister Syed Yusuf razaGilani on Thursday directed theministry of petroleum to take

immediate steps to resolve gas supplyissues of both domestic and industrialsectors. He gave these directions whilechairing a meeting on LNG and gasimports.Secretary petroleum briefed themeeting that 100 mmcfd gas fromHyderabad gas field would be availablewithin a month. ‘This gas would be putinto the national system to easepressure of gas outages on domesticand industrial consumers,’ the secretarysaid. He said Khyber Pakhtunkhwawould get 15 mmcfd gas from Kohat gasfield immediately, which would be putinto the national system.He said negotiations with CNGassociation were underway torationalise the supply of gas to CNGstations. He also said priority would begiven to domestic consumers in thesenegotiations and terms would benegotiated with the industrial sector toensure uninterrupted supply of gas tohouseholds.Secretary said the government hadtaken emergency measures to addressgas shortage in rawalpindi andislamabad, and was able to resolve it tothe extent of 80 per cent. He informedsteering committee of eCC hadapproved financial consultancy foriran-Pakistan gas pipeline, which was amajor step forward as far as the projectwas concerned. He apprised themeeting that 750 mmcfd more gaswould be flowing into the system byNovember 2014, which would besufficient to meet 40 per cent ofcountry’s gas deficiency.The meeting was attended by ministerfor finance, minister for petroleum,secretaries of finance, water and power,petroleum, and cabinet; chairmanNePrA, FBr, OGrA, and Port Qasimauthority and mD private power andinfrastructure board.

Consumer PriceIndex (CPI), whichwas 14 per cent in

November, last yearwas 10.2 per cent inNovember, this year

Consolidation through intraprovincial trade Page 2

Most eligible public transportin town Page 3What the US loses in its war with Iran Page 5

Friday, 23 December, 2011

PRO 23-12-2011_Layout 1 12/23/2011 12:29 AM Page 1

nAghMAnA ShAhID

WiTH the deteriorat-ing macro-eco-nomic indicators,the value of Pak-

istani rupee has fallen drastically,almost like the infamous “ Londonbridge”. even the most optimisticwould give up the hope that this cloudof devaluation has a silver lin-ing. Taking this into con-sideration, the firstquestion we need toanswer, collec-tively as a nationis “How coulda nation sur-vive with no orless buying ca-pacity?” Whatother optionsdo we have, ifwe are not carrying money in our bags.

Some would suggest that we exchangethings in “barter” as nations and people haveover the years done. And once again we plungedown to the level of mockery, looking to revertback to medieval practices, like barter. is itprevalent these days? exchanging things, do wehave valuables that can be considered as ex-changeable commodities?

Somebody was talking about ‘martinLuther’ that day. i would say we need a ‘marx’rather than Luther, a man, who could tell us insimple words how to pay heed to the theory ofsurplus value. To convince our educated, de-cent, enlightened government that they shouldmake an effort to implement, the concurrentlist; as provided by the constitution of Pak-istan, which caters for ideas like ‘surplus value’of commodities and “intra provincial trade” inPakistan. We must follow the materialistic in-terpretation of history, which Karl marx hadalready started, back in the 19th century. “Withmarx socialism became international or cos-mopolitan in scope“.

We need to evaluate, who gets the credit andhow? This can happen with honest trade be-tween Baluchistan and Punjab or the otherprovinces; if they have any commodities totrade upon. The revenue generated from tradebetween provinces must be allocated to improveinfrastructural facilities for the people of theprovince in question. moreover, when and ifthey get their due “profit” as surplus they wouldcooperate more since it serves their own bene-fit. There is an urgent need to tap indigenousresources from Balochistan in a way that ensurethat the locals are able to benefit from the re-sources as well.

Ad-vantages of intra – provincial trade inPakistan Trade amongst provincesshall bring about positive change in thebody politic of Pakistan. Following area few merits of intra-provincial trade:

n Better use of natural resources n Benefits for deprived provinces n Provincial autonomy n Uniformity of policy n improved distribution of wealth

Better use of natural resourcesWhen there is regular trade between all fourprovinces of Pakistan; our natural resources willbe better utilised, as every province will take keeninterest, in improving their personal products.Punjab must think about increasing the produc-tivity of it’s crops and fruits. Balochistan on theirpart should think about creating modernised infrastructure, like construction of schools, roads,bridges and catering to geological surveys on min-eral extraction. This way their input and out putwill be more utilitarian. Converting wealth and re-sources into utility will prevent our wealth fromfurther devaluation, as we would be focusing moreon resource and asset building rather than money.A refined, preserved resource has more economicvalue than money.

Benefits for deprived provincesSo far we have not been able to do justice to ourprovinces, as far as provincial rights are con-

cerned. if we give them a chance to havetheir own trade with other provinces of Pak-istan, they will feel more confident and workharder, in order to get their products approvedin the national market. This can enable thetraders to develop their products in accordancewith international standards and thus preparethem for entering the export markets abroad.

Provincial autonomyindependent trade between provinces willpave way for better performance and individ-ual enterprise by provincial government; espe-cially in the field of commerce and trade. Thisindependence will further diminish their feel-ing of deprivation. Therefore; there will be anoverall efficient outlook amongst provincialgovernment.

Uniformity of policyProvision of equal opportunity for every provincewithout any provincial bias is the need of the hour.There should be no bias as all four provinces haveequal status according to the constitution of Pakistan.

Improved distributionof wealth

The citizens of Pakistan need to con-tribute more towards national consolida-

tion. With a better share in the economy theywill be motivated to take active part in the civil

government. improved distribution of wealth willinevitably gain popularity as it aims at providingsolution to the ills of the “body politic” of Pak-istan, in effect curing the widespread disease ofdiscontent in our country.

Feelings of brotherhood amongst all fourprovinces of PakistanThis way we can promise a more cordial andstronger relationship between provinces of Pak-istan. They will get to know each other well withinternal trade. They will foster a feeling of belong-ing which might result in concrete national con-solidation, as we rise again as a nation.

In a nut shellNo one can deny the importance of trade in a coun-try, within or outside its boundaries. No countrycan exist without expanding trade. We are a diversenation with four different provinces. Having variedcultures and resources.Yet, there is a difference be-tween letting others exploit your resources and util-ising your own resources according to your owndemands. exploiting your own resources for one’sown collective benefit gives one the feeling of selfdetermination and self empowerment. Along witha proud feeling of possession that you have re-sources and are smart enough to utilise them ac-cording to your needs. it leads to healthycompetition and we tend to perform well when weourselves are the legal beneficiary of our legalrights. This feeling of autonomy gives us a sense ofintegrity. By doing so, we in effect break away fromthe begging bowl and strive for a stronger economy;based on self reliance. We also learn to avoid ex-travagant living and make an honest effort to curtailour expenditures; within our limits. if a nation isnot economically strong; it would not survive as anindependent sovereign state. it was rightly pro-claimed by marx, “All history is economic history”.

The writer is a freelance contributor. For

comments and queries:

naghmanashahid@yahoo.com

Consolidationthrough intraprovincial trade

MohAMeD A eL-erIAn

Anew economic order is takingshape before our eyes, and it isone that includes accelerated con-

vergence between the old Western powersand the emerging world’s major newplayers. But the forces driving this con-vergence have little to do with what gen-erations of economists envisaged whenthey pointed out the inadequacy of the oldorder; and these forces’ implications maybe equally unsettling.

For decades, many people lamentedthe extent to which the West dominated theglobal economic system. From the gover-nance of multilateral organizations to thedesign of financial services, the global infra-

structure was seen as favoring Western in-terests. While there was much talk of re-form, Western countries repeatedlycountered serious efforts that would resultin meaningful erosion of their entitlements.

On the few occasions that such resist-ance was seemingly overcome, the out-come was gradual and timid change.Consequently, many emerging-marketeconomies lost confidence in the “pooledinsurance” that the global system suppos-edly put at their disposal, especially attimes of great need.

This change in sentiment was catalyzedby the financial crises in Asia, eastern eu-rope, and Latin America in the late 1990’sand early 2000’s, and by what many inthese regions regarded as the West’s inad-

equate and poorly designed responses.With their trust in bilateral assistance andmultilateral institutions such as the inter-national monetary Fund shaken, emerging-market economies – led by those in Asia –embarked on a sustained drive towardgreater financial self-reliance.

Once they succeeded in overcoming apainful crisis-management phase, many ofthese countries accumulated previouslyunthinkable levels of international re-serves as precautionary cushions. They ex-tinguished billions in externalindebtedness by generating and sustaininglarge current-account surpluses. And theyincreased the scale and scope of domesticfinancial intermediation in order to reducetheir vulnerability to external storms.

These developments stood in stark contrastto what was happening in the West. There,unprecedented leverage, massive debt cre-ation, and a seemingly infinite sense of creditentitlement prevailed. Financial excesses be-come the rule rather than the exception, fa-cilitated by financial innovation and theerosion of lending standards and prudentialregulation. Suddenly, the world turned up-side down: “rich” countries were runninglarge deficits and, in some cases, tippingfrom net creditor status to net indebtedness,while “poor” countries were running sur-pluses and accumulating large stocks of ex-ternal assets, including financial claims onWestern economies.

At first blush, this unusual convergencebetween Western and emerging countriesseems to reflect what advocates of a new in-ternational economic order had in mind.But appearances can be misleading, and, inthis case, they are misleading in a significant

way. Advocates envisaged an orderlyprocess in which economic convergence ac-companied and facilitated global economicgrowth. They foresaw a collaborativeprocess guided by enlightened policymak-ing. But what is occurring is far different andmore unpredictable.

rather than exhibiting enlightenedleadership, Western policymakers have con-sistently lagged realities on the ground, witha bewildering mixture of denial, misdiagno-sis, and bickering undermining their re-sponses. rather than proceeding in anorderly manner, today’s global changes arebeing driven by the disorderly forces of de-leveraging emanating from a europe indeep financial crisis and an America seem-ingly unable to restore sustained high ratesof GDP growth and job creation.

A version of this article was firstpublished in Project Syndicate

The new international economic disorder

Breaking away from the begging bowl

debate

Friday, 23 December, 2011

02

There is a difference between letting othersexploit your resources and utilising your ownresources according to your own demands

PRO 23-12-2011_Layout 1 12/23/2011 12:29 AM Page 2

IS it about time that islamic investment fundsstart screening out the companies doing busi-ness with the countries that are not friendly to-wards islam and muslims and other companiessupporting causes and movements that have a

hostile attitude towards islam? As being part of an overone trillion dollar islamic financial services industry,should islamic investment funds start a new journey ofinvestors activism to promote causes that are in line withislamic civilisation and discourage businesses and activ-ities deemed undesirable from an islamic viewpoint?

i have in the past advo-cated non-political natureand operations of islamicbanking and finance, andam indeed considered as akeen advocate for coopera-tion between islam and theWest. While i remain con-vinced of the benefits thatcan be derived from the fi-nancial alliance between is-lamic and conventionalfinancial institutions, it is in-

teresting to note that US Socially responsible investing(Sri) funds have for some time screened out the compa-nies that engage in business with Sudan. Although thisview may have a humanitarian dimension, it cannot bedenied that it has strong political implications as well.

According to 2010 report on Socially responsibleinvesting Trends in the United States, issued by Socialinvestment Forum Foundation, "increasing numbers ofinstitutional investors and money managers are ad-dressing the crisis in the Sudan, whether through tar-geted divestment or active engagement with companiesexposed to the risk of doing business in such a volatile,repressive regime. indeed, Sudan-related investmentpolicies have displaced tobacco as the most prevalenteSG (environmental, social and governance) criteria in-corporated into investment management, affectingmore than $1.3 trillion in institutional assets and nearly$450 billion across all investment vehicles included inthe money manager phase of research."

in my view it is time for islamic investment funds tostart offering some real value addition to investors beyondjust Shari'a compliancy. islamic investing so far has by andlarge been concerned with assurance of Shari'a compli-ancy by screening out forbidden activities (such as gam-

bling, interest-based financial services, liquor, pork andadult entertainment); it also includes some other activitiesdeemed undesirable for social responsibility or politicalcorrectness (like tobacco and arms). it employs two typesof screens: industry screens (as above) and financialscreens (to ensure that balance sheets of the companieschosen are in compliance with Shari'a). There is, however,a growing need for a detailed set of rules and regulationsto be developed to categorise islamic investment fundsinto merely Shari'a compliant and purely islamic funds.

As a starting point in this direction, a fundmay be called a Shari'a compliant fund if:

1. it does not invest in the companies involved inproduction, distribution, marketing and sale ofShari'a repugnant goods and services; and

2. it does not get involved in Shari'a repugnantactivities to conduct its finances (both in raisingand deploying funds).A fund may be categorised as an Islamic fund if:

1. it is Shari'a compliant in its product offering and interms of its finances and operations; and

2. it promotes any or all of the broader objectives ofShari'a, which include promotion of the well-beingof all mankind in terms of safeguarding faith, lifeand self-esteem, intellect and human capital, andposterity and wealth.The term islamic Shari'a funds industry can be used

for both Shari'a compliant and islamic funds. While a Shari'a compliant fund may not take a

political view on its investments, it is important thatan islamic fund ensures that its investment strategypromotes at least one of the objectives of Shari'a.Thus, prohibition of investing in companies that sup-port movements and ideologies like Zionism and ag-gressions like israeli occupation of Palestine may fallunder screening of islamic funds. On a companylevel, while a stock like that of Starbucks can be in-cluded in a Shari'a compliant fund (if it comes out ofthe chosen Shari'a screens successfully), it must notbe included in the portfolio of an islamic fund, be-cause Starbucks publically supports israel, who areblameworthy for the killing of innocent people in-cluding women and children in the West Bank andPalestine by the israeli army.

it is also important for the islamic financial serv-ices industry to start taking a view on the islamicityof the fund manager. After all, if an ethical fund man-ager is not committed to the ethical values, its credi-bility as an ethical fund manager must be questioned.Similarly, an islamic fund manager must demon-strate its full commitment to the objectives of Shari'a(as outlined above). While the profit motive can stillbe recognised as a valid reason for offering a Shari'acompliant fund, this must not be the raison d'etre' foroffering islamic investment funds.

The writer is a Shari’a advisor to a number ofbanks and financial institutions and can be contacted

at humayon@humayondar.com

THOUGH, for obvious reasons,the government’s newfound lik-ing for ‘capitalising on humancapital’ cannot be taken at facevalue, it touches upon a central

feature of the new international economic orderdeveloping in the wake of the great recession.Countries like malaysia and Australia weath-ered the storm better than most in the Asia-Pa-cific region because of their prior focus on‘capitalising on human capital’. embarking onmedium-to-long-term overhaul while much ofthe region experimented with the doomedmonetarist free-enterprise trickle-down, itturned out their focus on human resource de-velopment helped bolster the economy muchmore successfully than those relying on hotmoney advances to record GDP growth.

The present environment of low growthand high unemployment in much of the eco-nomic north has triggered a fresh rush to-wards human resource diversification.Foreseeing a dramatically changed marketenvironment in the near future, individuals

are acquiring skills that will cater to expand-ing real-sectors of economies, whereprocesses will involve intrinsic productionas opposed to financial wizardry that createswealth from nothing.

in this preemption novelty lies an importantlesson for Pakistan. The economy stands at astagnating low that needs steroid shots of fiscalinjections for even a modest revival. And our re-peated experiences with aid and borrowing areenough proof that the money must be generated,not borrowed. Which means both taxation andtrade must grow. Therefore, it behooves the gov-ernment to build a human resource baseequipped with the capacity to enhance industrialproduction, and subsequently exports.

The new world requires this proactiveshift. if the government is serious about mak-ing people the country’s most precious asset,then there is still hope. Otherwise, consideringmounting liabilities, not to mention interna-tional isolation and political paralysis, eachwith its own negative spillover, the breakdownpoint will come sooner rather than later.

Human capital,

liabilities and GDP

Is it time for Islamicfunds to start screeningcompanies thatsupport movementshostile to Islam?

Islamic Investment Funds

Humayon Dar

E D I T O R I A L

Most eligible public transport in town

YeS, you read the title cor-rectly; it is about the mosteligible public transportin town and not the mosteligible bachelor in town.

Therefore, the article does not foster sex-ual discrimination and caters to bothmales and females by offering them excit-ing new and old public transportation fa-cilities. if you're searching all around yourcity to find your ‘Desired One’; you nolonger need to rummage, for i have thedefinitive list of the town’s most eligible

public transport and their current status. Latest CNG buses: Only for Lahoris?

Check. Smoldering good looks? Check.Heart throbbing physique? Check.. Bur-geoning blockbuster release? Check.CNG? Uncheck, uncheck and uncheck.

Air transport: more specifically, PiA(read: Pakistan international Airlines). Aslong as you're okay with some flight de-lays, unexpected mood swings, uncooper-ative staff, skyrocketing fares, etc; you arefree to book your tickets. However, thereis a lot more exciting as side liners, sodon’t worry if this does not work for you,because we have three new airlines com-ing up, very soon. railways: it sure has areputation of being a bit inefficient, butthere’s no doubt that there has to be awhole story behind its rotten case study.Hint: a billion-dollar catch *runs to buytickets of the new private train startingfrom January, 2012*

Local buses: i understand, ‘if we don’thave railways, we can use buses instead,’ but

can we really trust the latter? The dispropor-tionate hike in diesel prices has also furtherincreased the inefficiency of these localbuses. rickshaws: i love the feel of travellingon a rickshaw, but it makes me sad when therickshaw wala demands for more moneyjust because ‘peetrole’ is too expensive andthere is a CNG strike for god knows howmany days. metro: Don’t mistake it withmetro Cash & Carry. This option is not evenon the list. Subway: Again, we can only takeit on face value and extract good vegetarianor non-vegetarian sandwiches and saladfrom here. Good news, it will take us on ajourney to taste the ‘international food’,without moving a single inch.

The definition of public transport herein Pakistan, today, is a misnomer owing tothe public institutions’ inefficiency andpublic’s general impression of the entireconcept of public transport. Weighingboth the public and public transportdilemma is therefore, of extreme impor-tance. Starting with the former; the public

dilemma is betteranalysed as a ‘pseudofacial’ mentality thatruns for an attractiveprivate transport, butwould disregard themost eligible publictransport in town. No, iam not talking about the luxurious busesin town that do not hurt your ‘conscioustag’, but all the rest available at your dis-posal, in your respective cities. Publicneeds to change their habits, lifestyles andattitudes; not their cars.

Similarly, coming to the public trans-port dilemma; public transport has notbeen in such a dire state since the day of itsconception, it has taken continuous levelsof mismanagement and corruption to bringit to this stage. Putting it correctly, publictransport is in serious competition with pri-vate transport on a number of fronts. Anddefinitely there are advantages for everyonein developing public transport. For every

extra person who takesup a public transportceases the possibility ofone person travellingfrom car, hence, lesscongestion on the roadsand less competition forthose scarce parking

spots. At the end of day, we fail to addressthe huge responsibility that rests on ourshoulders. We need to become the rekin-dled change agents to bring transformationin the society as a whole, instead of waitingon the system to change. No doubt, theforemost solution is to improve the publictransport in order to serve the demand. Butthen again, change should be on both sides.The public should also realise and inculcatethe habit of preferring frequent use of pub-lic transport over private.

The writer is Sub-Editor,Profit. She can be reached at

syedmaheen@hotmail.com

Maheen Syed

For comments, queries and contributions, write to:

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

BaBur SaGhirCreative Head

haMMaD raZaLayout Designer

ShahaB JaFrYBusiness Editor

ali riZviNews Editor

MuneeB eJaZLayout Designer

F r i d a y, 2 3 D e c e m b e r, 2 0 1 1

You no longer needto rummage, for I havethe definitive list of thetown’s most eligiblepublic transport

Kunwar KhulDune ShahiDSub-Editor

Maheen SYeDSub-Editor

Ridiculous plan

This is with regards to the news report,“Govt to extend railway track toChina:Bilour” published yesterday. Thisindeed is ridiculous, since there are re-ports every day on how our railway sys-tem is on the verge of collapse. Trainsaren’t running on time, massive corrup-tion scandals surface regularly and whatnot! rather than planning on improvingor actually trying to keep the existingsystem alive, our magnificent mr Ghu-lam Ahmad Bilour is planning on ex-tending the railway to China andAfghanistan. i mean there is so muchdisparity between the noise generated byour hierarchy and their actions that onewonders if there is any hope left whatso-ever. Only God can save us.

SAAD BALoCh

hydERAbAd

Welcoming development

This is with regards to the news re-port, “Thai govt to open markets forPakistani fruits” published yesterday.We are traversing such times that anynews that promises to bolster oureconomy is like a breath of fresh air.By opening markets to Pakistani fruitsthe Thai government is giving ourvaluable goods another market to ex-plore and we should make full use ofthis opportunity. Pakistani fruits areconsidered to be amongst the highestquality fruits globally and we shouldadvertise them properly. This is a re-ally welcoming development on Thai -Pakistan trade and investment promo-tion. i hope it does not become a vic-tim of typical Pakistani bureaucracyand red-tapism.

M. ASLAM ChAuDhry

LAhORE

Shari’a MaTTerS

PRO 23-12-2011_Layout 1 12/23/2011 12:29 AM Page 3

Friday,23 December,2011

04news

engro Foods CeO, afnan ahsan

There are logical expansions in the raw-material source, but collection of those rawmaterials is very difficult in Pakistan becausethe agriculture sector is disorganised

Pressure on rupee limits market gainsKArAChI

STAFF REPORT

THe trading band clearly sug-gests a lack of investor par-ticipation. rumours of CGT

thrown out, but the windfall gain of200 plus points provided somehope to investors. Today’s volumeswere well below the average year todate volumes of 80 million shares.

KSe 100 index closed at11306.10 with a gain of 37.55 points,while total volume stood at27,645,652 along with the totalvalue of 1,688,021,685. KSe 30index closed at 10360.69 levels togain 52.60 points and All Shareindex closed at 7824.42 levels aftergaining 27.21 points. Total 119scrips advanced 72 declined and 98

remain unchanged out of total 289scrips traded.

The index heavy oil sector waslargely tilted towards the negativeterritory with OGDC losing arupee followed by PSO and POL.The rs100 per bag hike in urea

prices pushed fertiliser stocks up-wards with engro benefiting themost. engro appreciated aboutrs4.60 but is still trading belowthe rs100 psychological barrier.Stocks with index weight and lowfree float including Ulever and

Nestle price appreciated and pro-vided positive support to theindex. With merely six tradingdays left before the year end, weare not expecting any miracles whichmay change the investor behaviour,said Bilal Asif at HmFS.

SBP directs banks to exchangers5 banknote before Dec 31KARACHI: State Bank of Pakistan (SBP) has directed allcommercial banks and field offices of SBP Banking ServicesCorporation (BSC) operating throughout the country toexchange the existing rs5 banknote with banknotes andcoins of all denominations before 31st December, 2012. itmay be pointed out that this directive allows only theexchange of rs5 banknote from banks and SBP-BSC fieldoffices to facilitate the general public who are in possession ofsuch notes. However, the said banknote will standdemonetised, and shall not be a legal tender from 1stJanuary, 2012. Over 10,000 branches of commercial banksand 16 field offices of SBP BSC will exchange these banknotesof rs5 denomination. This exchange facility will be availableto the general public till 31st December, 2012. STAFF REPORT

uBl shows stellarperformance in 3rd QuarterKARACHI: United Bank Limited (UBL) reported strongearnings of rs4.2 billion in third quarter of this calendar yearwith earning per share of rs3.47, up 24 per cent Quarter-on-Quarter basis; taking cumulative 9m profits to rs11 withearning per share of rs8.95, up by an impressive 36 per cent,year-on-year basis. The notable 24 per cent Q-on-Q jump inprofitability came on the back of Nim expansion of 30bpsQoQ to 7.3 per cent and a six per cent QoQ growth in the non-funded income. On the balance sheet front, bank’s depositbase witnessed a slight decline of six per cent on QoQ basis tors557 billion. Similarly, earning assets (investments plusadvances) too declined by two per cent QoQ. Post thisimpressive result, we have revised up our 2011 earningsestimates to rs11.9 from rs10.7 per share previously andmaintain our ‘Buy’ call on the stock. JAVEd MAhMOOd

CnG stations in Sindh and hubto remain closed for 24 hoursKARACHI: in view of the continuing gas shortage dueto the increased winter load and in accordance with therecent eCC decision, it has been decided to cut gassupply to CNG stations in Sindh and Hub for 24 hoursfrom 9 am on Friday, 23rd December till 9 am onSaturday, 24th December, 2011. The decision todiscontinue gas to CNG stations on a periodic basisfollows an extraordinarily low pressure situation that hasbadly affected overall gas supply in Sindh andBalochistan. SSGC realises that while the customers arefaced with an adverse situation, the company is taking allactions to ensure uninterrupted gas supply and a stablepressure. in this regard, the management has requestedall stakeholders to fully support the company in handlinglow pressure situation more effectively. STAFF REPORT

SMeDa inks Mou withiPO to facilitate SMesLAHORE: Small and medium enterprises DevelopmentAuthority (SmeDA) and intellectual PropertyOrganisation (iPO), Pakistan have entered into amemorandum of Understanding (moU) to facilitateSmes in respective ambit of their service. mr YousafNaseem Khokhar, CeO SmeDA and mr Hameed UllahJan Afridi, Chairman; iPO-Pakistan signed the moU onbehalf of their organisations. From SmeDA, mrKhurram Khan, Gm Central Support, Syed iqbal Kidwai,Gm-Outreach, mr Alamgir Chaudhry, Gm-Policy andPlanning, mr Sultan Tiwana, Gm-B&SDS accompaniedCeO SmeDA; whereas, from iPO, mr Sajjad AhmadBhutta, DG, iPO-Pakistan along with other officialsattended the ceremony. Later, CeOs of both theorganisations inaugurated the help desk jointly set up atSmeDA head office to facilitate Smes in the field ofintellectual property rights. STAFF REPORT

Telecom sector faces declineKARACHI: Telecommunication sector has faced amassive decline in foreign direct investment, asopportunities are limited in the said sector due to stiffcompetition and lack of technological moderation.Therefore, State Bank of Pakistan in its annual report forthe year 2010-11 anticipated that in the absence ofincrease in network coverage the growth in telecomsector is likely to decelerate further. The sector is bentupon expanding the range of services for improvingrevenues and this strategy has resulted in toughcompetition, leading to very high marketing costs anddeclining operating margins of service providers. Acontinuation of this trend is likely to increase marketsaturation and further weakening of profitability, thereport said, adding that in 2010-11 FDi in iT and telecomstood at minus $34.1million. STAFF REPORT

Concerns over crudehandling capacity persist

KArAChI

WAqAR hAMzA

SOme crude handlingcapacity may becomeunavailable during2013 to 2015 due toscheduled mainte-

nance at Karachi Port Trust’s OilPier number 1. moreover, increasein POL product demand and refin-ing capacity in the future is likely toexert stress on the existing cargohandling infrastructure. Currently,the combined cargo handling capac-ity for POL products at ports is 33.0million mT (24.0 million mT atKeamari and 9.0 million at

FOTCO). However, handling capac-ity for crude is significantly lower(6.9 million mT at Keamari; 0.6million mT at FOTCO).

This was stated in Annual re-port 2010-11 by State Bank ofPakistan. The report furtherstated that to improve cargo han-dling capacity for crude imports,enhancement in infrastructure isurgently needed. Specifically, in-troducing night time navigationand increasing the draft ofFOTCO can immediately improvecargo- handling capacity.

The options that need to be ex-plored are: Single-Buoy mooring4t(SUm) at HUB connecting the Byco

refineries for crude imports; white-oil pipeline link between KPT andFOTCO for effective utilisation ofKPT’s three modem oil piers, toprovide KPT access to PAPCO’tproduct terminal, and reduce shipdemurrages; second berth atFOTCO to handle rising P0 demandfor power generation.

it is to be noted that Pakistanmeets majority of its crude oil im-ports from middle east, and themain suppliers include Saudi Ara-bia, UAe and iran. Pakistan Na-tional Shipping Corporation(PNSC) maintains 3-4 dedicatedtankers capable of delivering600,000 mT of crude on average

every month. At present, crude oiland product imports can only behandled at two terminals: Kea-mari and FOTCO (Port Qasim).Both pods are located in Karachiand connected via 25 km pipeline(capacity 2.0 million mT permonth). The pipeline is primarilyused for upcountry movement ofimported POL products (particu-larly diesel), through linkedpipelines at FOTCi. majoritystake in the pipeline is held byPak-Arab Pipelines (51 per cent)while PSO, Shell and Chevronhold the remaining shares.PArCO, PrL and NrL are linkedwith this pipeline.

CNG experts advisecylinder standard check

LAhore

NAuMAN TASLEEM

iF your vehicle was convertedto CNG more than five yearsago then you must check the

standard of cylinder or else your ve-hicle and life could be at risk, CNGsector experts told Profit on Thurs-day. They said though the life ofcylinder is more than 10 years but tobe on the safer side, it is necessarythat consumers should check thestandard of cylinder. The countryhas witnessed a number of cylinderblasts in public transport due to sub-standard cylinders and around sixpeople lost their lives in these inci-dents. According to Oil and Gas reg-ulatory Authority (OGrA) standardsfor CNG cylinders, the minimumpressure for CNG cylinder is 200bars or 2,900 PSi and any cylinder,which is manufactured below thisstandard, is dangerous for fillingCNG. Unfortunately, there has beenno check by the authorities con-cerned to regulate CNG cylinders.

People associated with CNG sectorsaid consumers should check the qual-ity of cylinders to avoid any untowardincident. Similarly, any cylinder whoseage is more than five years should bechecked for quality. “i am not sayingthat every cylinder more than five yearsis dangerous but at least the consumers

should check its quality,” said a CNGstation owner muhammad Siddiqueadding its not hard task to check thequality of cylinder. “The consumer justvisit any CNG station and check thequality by paying a nominal amountrs300-500,” he added.

All Pakistan CNG AssociationSenior Vice Chairman Central execu-tive Committee raja muhammadAnwer said if consumers follow thestandard then there is no danger inusing CNG cylinder or kit. He saidaround the globe not even a single in-cident of CNG cylinder blast is wit-nessed but unfortunately regulatoryauthority in Pakistan is not checkingstandard of cylinders.“ every Tom,Dick and Harry is manufacturing sub-standard cylinders and nobody iskeeping any eye on such elements,” hesaid, adding that illiterate people don’tknow specifications of cylinders andjust try to install low-priced cylinders.“it was great astonishing that in many

cases, oxygen gas cylinders were usedfor CNG filling,” he said adding CNGcylinder standard is 200 bars whileoxygen gas cylinder is 20 bars. “Onecan easily imagine that what would bethe result,” he said adding that theconsumers should keep an eye on theleakage so that they could repair it.“There is nothing wrong in using CNGand some section of the media is tryingto terrify people,” he lamented.

He said according to governmentrules only CNG stations having licensesare authorised to install CNG kit but noone is implementing this rule and res-olutely lives of people are at risk. “WhyOGrA is not taking action against peo-ple who don’t have the licenses but eventhen installing kits,” he said addingpublic transport is using sub-standardcylinders and there is no check on suchvehicles. “it is the responsibility oftransport authority to check the publictransport and issue or cancel the li-censes of such vehicles,” he added.

Pakistan decidesto offer technologyneutral spectrum

ISLAMABAD

AMER SIAL

iN a major development,government has decided to offernew telecom licenses which will

be neutral and licensees will be able todeploy any technology of their choiceincluding 3G, 4G, LTe or any otherupcoming technologies. An officialsource said the decision has been madeto address concerns of local telecomoperators which had concerns thatdeployment of 3G technology, was nota wise option, in the presence of 4G,LTe and other emerging technologies.Telecom regulator, PakistanTelecommunication Authority (PTA) ispreparing information memorandumfor the auction of frequency spectrumunder the policy directive issued byministry of information Technology(moiT). Government also plans to holdinvestors conferences andinternational road shows to appriseinvestors about the telecom potentialof investment in the country. Pakistanhad initially planned to auction threelicenses for 3G service in 2007 but theprocess got delayed due to the signingof sale purchase agreement of PTCLwith the UAe owned etisalat that hada condition that government would notissue any new licenses for longdistance international (LDi) categorytill march 2012.

around the globe not even a singleincident of CnG cylinder blast is witnessedbut regulatory authority in Pakistan is notchecking standard of cylinders

PRO 23-12-2011_Layout 1 12/23/2011 12:29 AM Page 4

05

Friday,23 December,2011

news

CORPORATE CORNERSilkbank joins handswith Dawood Family Takaful

KARACHI: Silkbank Limited and Dawood FamilyTakaful Limited have entered into a strategicpartnership whereby Silkbank shall sell Shariahcompliant family Takaful products through itsbranch network under "Bancatakaful Agreement".A ceremony was held at head office of Silkbank,Karachi to sign the agreement. The agreement wassigned by Talha Saeed, Group Head retailBanking, Silkbank and rizwan Ahmed Farid, Chiefexecutive Officer, Dawood Family Takaful.Dawood Family Takaful is amongst the pioneers inthe field of Family Takaful business in Pakistan,providing high quality islamic financial protectionservices. PRESS RELEASE

Microsoft launches Customerimmersion experience programme KARACHI: microsoft is empowering local firmswith a host of business productivity solutionsthrough its recently launched Customerimmersion experience (Cie) programme. KamalAhmed, Country General manager, microsoftPakistan explained, “The programme offers theopportunity for users to experience first-hand of

how microsoft technologies can help themcommunicate, collaborate, create and manageinformation more efficiently within theirorganisations.” During Cie, participants werewalked through a set of microsoft solutionswhich focused on various productivitycapabilities that allow people to merge theiremails and calendar better; work simultaneouslyon a single document; make better and fasterdecisions through self-service businessintelligence; and be productive from anywhereusing different devices. PRESS RELEASE

emirates becomes a bighit with young cricket fans

KARACHI: emirates became a big hit with youngcricket fans when it hosted an event for studentsfrom a number of schools at the Quaid-e-AzamTrophy final. The airline reiterated itscommitment to the grassroots game in Pakistan byinviting 80 underprivileged children to theNational Stadium, Karachi, to watch ZaraiTaraqiati Bank Ltd ( ZBTL) and Pakistaninternational Airlines (PiA) contest on the firstday. Pupils from Garage School - which aims toeducate street children - and the Health OrientedPreventive education (HOPe) schools – whichprovide academic as well as vocational training to

the underprivileged – were treated to a great dayout. in addition to watching the thrilling action onthe pitch, the students were given T-shirts andcaps and cheered on the players with emiratesscorecards. PRESS RELEASE

Jazz celebrates successof Pakistan cricket teamLAHORE: mobilink Jazz extended itscongratulations to the Pakistan Cricket Team onits exceptional performances throughout 2011. Theteam overcame a host of on and off field troublesto succeed across all formats of cricket throughoutthe year, culminating with the clean sweep ofBangladesh series. The team became the mostsuccessful ODi team of the year (2011), havingwon 24 of its 32 matches in the year, with thehighlight being their incredible run of form in theWorld Cup. moied Javeed, mobilink’s Directormarketing (Jazz) highlighted, “Pakistan’s cricketteam has performed exceptionally well in 2011,and Jazz takes pride in bringing this cricket to thepeople of Pakistan. We wish the team all thesuccess in 2012!” PRESS RELEASE

OPen launches its Karachi chapter

KARACHI: imran Sayeed, Chairman, OPeNGlobal (Organisation of Pakistani entrepreneursof North America) announced the launch of OPeNKarachi as the first international chapter of OPeNoutside the US, in the presence of a large andimpressive gathering of Pakistani entrepreneurs

and business leaders. Ashraf Kapadia, ChairmanBoard, OPeN Karachi welcomed the guests. At thelaunch ceremony, imran Sayeed explained thatOPeN is a non-profit association which wasstarted in USA by six entrepreneurs in Boston in1998. it now has over 3,000 entrepreneurs inseven chapters across the US in Boston, New York,Silicon Valley, Washington DC, Houston, Chicagoand Atlanta. PRESS RELEASE

Along with improving our footprints,we are committed to undertake newinitiatives in order to provide ourcustomers with the best products

Bank alfalah CeO, atif Bajwa

ISLAMAbAd: CEO and President of Shifa dr Manzoor-ul-haq qazi and daughter of dr zaheer Ahmed (late)Samina Kausar, with participants of the ceremony heldin remembrance of the Founder and Ex-Chairman ofShifa dr zaheer Ahmad (late). PRESS RELEASE

KunwAr KhuLDune ShAhID

VYiNG to become the godfa-ther of just about everyfragment of the globe hasits own tribulations. moreoften than not you are faced

with a multitude of options, and some-times the options manage to tick both the‘Do’ and ‘Do not’ column almost simulta-neously; leaving you staring poker faceddown the barrel of indecisiveness. Tocomplete the global hegemony US has somany bases to cover that it has been bom-barded with a blitzkrieg of choices – ablitzkrieg that has the White House han-kering after political permutation for-mulas. With so many tradeoffs hingingon Washington’s sanctions on Tehran,US’s century old ‘Heads i win, tails youlose’ coin doesn’t look like working onthe iranian front.

Congress’ approval of new sanctionson iran last week was a statement of in-tent that US is eyeing to mash iran’seconomy. The sanctions would meanthat Tehran would find it hard to sell itsoil, and of course nothing would hurtiran’s fiscal scheme of things more thana slash in its oil revenue. A plunge inrevenue would in turn mean that the

iranian wallet would not be thickenough to furnish its nuclear pro-gramme – the butt of US theatrics. How-ever, the situation is a blatantlydouble-edged sword, if there ever wasone! For, US might manage to goadiran’s nuclear intent, but the fact thatiran is a major oil supplier would meanthat eliminating iranian oil from theglobal market would lead to precipitousescalation in oil prices. As things stand,and have stood for a while now, oil de-mand has become a bottomless bit, andsubtracting one of the chief supplysources would further exacerbate the de-mand-supply disparity. While this de-mand-supply equation would’ve been atthe forefront of the aforementioned per-mutation formulas, US Congress’ ap-proval of the sanctions means that themenace of a nuclear armed iran is moredaunting for Washington than oil mar-ket pandemonium.

While last week the US Congress hadto mull over tradeoffs regarding oil, thecoming potential sanction engulfs atradeoff pertaining to another lucrativeenergy source – natural gas. in this mo-ment in time europe depends on russiafor the major bulk of its gas supply; andhence, russians have quite often used

gas as a political tool to influence mattersin europe – most notably in Ukraine,that suffered a gas cutoff in January2009. experts opine that russian aimhas been to reshape the post-Sovietsculpt of europe and its natural gassource is a telling instrument that isquite often used to influence matters.Therefore, europeans have long yearnedfor an alternate supply of natural gas tocounter the russian hegemony and theyhave had the US backing regarding thematter as well. One such source has beenlocated in Shah Deniz field in Azerbaijan,and european leaders have been eyeingthe construction of a pipeline that wouldbypass russian pipelines and bring gasstraight to europe.

Nonetheless, the twist in the tale is

courtesy the presence of Naftrian inter-trade Co. (NiCO) – owned by the iraniangovernment – in the Shah Deniz consor-tium. This little problem means that thecatch-22 ensnaring the US hierarchy isthat it has to choose between sanctionson foreign joint ventures involving theiranian government and allowing russ-ian impediment in european politicsowing to its supremacy over gas supply tothe continent. Sanctions over Shah Denizwould also counter the historical US pol-icy of sponsoring gas from Central Asia toeurope as an alternative option. All thesame, another pivotal façade worth con-sidering is that iranian stake in ShahDeniz is considerably less – NiCO hasmerely a 10 per cent ownership – thaniranian prominence in the oil game. Cou-

ple this with the fact that europe is indire need of a gas alternative, and onegets the feeling that US might opt out ofthis sanction, even though it would in-crease european dependence on iran.

The nuisance that iran has becomefor the US has given Washington a con-tinuum of sleepless nights for ages. Thecurrent vicious circle for the US on theiranian front has witnessed historical USpolicies and vested interests on a collisioncourse. Strategies are knocking the day-light out of each other on the Washingtondrawing board; let’s see which one is thelast one standing.

The writer is Sub-Editor,Profit. He can be reached at

khulduneshahid@gmail.com

KARAChI: Picture shows Sindh minister of industries MrAbdul Rauf Siddiqui and Mr Rizwan Marchant, of qatarAirways and diplomats from Saudi Arabia, Kuwait, qatarand Afghanistan with other prominent guests on theoccasion of the anniversary of the National day ofqatar. PRESS RELEASE

What theUS loses in itswar with Irang Evidently, the menace of a nuclear

armed Iran is more daunting for Washington

than oil market pandemonium

PRO 23-12-2011_Layout 1 12/23/2011 12:30 AM Page 5

top 5 perForMers sector wiseSYMBOl OPen hiGh lOw CurrenT ChanGe vOluMe SYMBOl OPen hiGh lOw CurrenT ChanGe vOluMe

Food ProducersAbdullah Shah 5.60 5.00 5.00 5.00 -0.60 500Adam Sugar 16.70 16.95 16.31 16.77 0.07 2,642AL-Noor Suger Mills 55.20 57.95 52.44 55.99 0.79 2,014Bawany Sugar 11.10 11.10 10.30 11.10 0.00 50Colony Sugar Mills 1.75 1.70 1.60 1.70 -0.05 9,042

Household GoodsDiamond Ind. 8.20 9.18 9.18 9.18 0.98 1Hala Enterprise 6.01 6.90 6.90 6.90 0.89 50Pak Elektron Ltd. 4.06 4.38 3.94 3.94 -0.12 389,302Singer Pakistan 14.07 15.06 13.07 15.06 0.99 501Tariq Glass Ind. 8.30 8.50 8.31 8.39 0.09 11,224

Personal Goods(Colony) Thal 1.40 1.10 1.00 1.00 -0.40 2,000AL-Qadir Textile 12.50 13.00 13.00 13.00 0.50 500Amtex Limited 1.18 1.25 1.17 1.20 0.02 11,407Artistic Denim Mills 21.50 21.50 21.50 21.50 0.00 40Azam Textile 1.11 1.60 1.11 1.11 0.00 1

Future ContractsAHCL-DEC 27.96 28.25 27.75 27.83 -0.13 97,000ANL-DEC 3.40 3.46 3.26 3.32 -0.08 140,500ATRL-DEC 111.88 112.00 109.61 110.19 -1.69 298,000DGKC-DEC 19.09 19.25 18.50 18.81 -0.28 208,000ENGRO-DEC 97.03 96.40 92.21 94.54 -2.49 1,558,000

Pharma and Bio TechAbbott Laboratories 99.00 100.00 98.50 99.54 0.54 426Ferozsons (Lab) Ltd. 74.62 75.00 74.62 74.62 0.00 10GlaxoSmithKline Pak. 65.27 65.99 64.10 65.20 -0.07 4,216Highnoon (Lab) 29.23 30.00 28.51 29.74 0.51 3,276IBL HealthCare 13.61 13.50 13.15 13.44 -0.17 1,962

Fixed Line TelecommunicationP.T.C.L.A 10.28 10.32 10.13 10.17 -0.11 325,684Pak Datacom Ltd 34.38 34.50 34.45 34.50 0.12 900Telecard Limited 0.75 0.83 0.75 0.79 0.04 7,497Wateen Telecom Ltd 1.84 1.88 1.75 1.75 -0.09 27,179WorldCall Telecom 0.81 0.94 0.83 0.90 0.09 1,537,164

ElectricityGenertech 0.35 0.35 0.34 0.34 -0.01 10,002Hub Power Co. 35.52 35.50 34.01 34.50 -1.02 3,884,023Japan Power 0.63 0.65 0.60 0.65 0.02 55,204K.E.S.C. 1.51 1.55 1.50 1.51 0.00 299,633Kohinoor Power 1.60 1.70 1.65 1.65 0.05 501

BanksAllied Bank Ltd 56.83 57.99 56.00 56.46 -0.37 8,086Askari Bank 10.29 10.29 10.00 10.01 -0.28 156,080B.O.Punjab 4.81 4.89 4.72 4.78 -0.03 419,199Bank Al-Falah 11.51 11.55 11.00 11.35 -0.16 1,772,293Bank AL-Habib 28.30 28.52 28.18 28.27 -0.03 87,101

Non Life InsuranceAdamjee Ins 42.06 43.38 41.38 42.63 0.57 37,504Atlas Insurance 36.00 36.90 36.00 36.00 0.00 65,132Century Insurance 6.78 7.23 6.45 7.23 0.45 1,500EFU General Ins 35.06 35.05 35.00 35.00 -0.06 7,753IGI Insurance Ltd. 41.94 43.25 42.00 42.65 0.71 600

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

Financial ServicesAMZ Ventures A 0.35 0.38 0.28 0.29 -0.06 5,018Arif Habib Ltd. 14.43 14.89 13.70 13.82 -0.61 32,976Dawood Cap.Man XB 0.65 1.14 0.65 0.65 0.00 10Dawood Equities 0.66 0.99 0.60 0.85 0.19 1,700F. Nat.Equities 2.55 2.55 2.55 2.55 0.00 458

Equity Investment InstrumentsAL-Noor Modar 3.50 4.50 4.20 4.50 1.00 131,240Allied Rental Mod 22.45 22.45 21.70 22.45 0.00 25B.R.R.Guardian 2.01 2.10 2.01 2.01 0.00 100Cres. Stand.Mod 0.48 0.55 0.50 0.54 0.06 33,349Elite Cap.Mod 2.55 3.00 2.55 2.55 0.00 26

MiscellaneousCentury Paper 13.25 13.40 13.30 13.38 0.13 6,990P.N.S.C. 13.30 13.95 13.01 13.15 -0.15 514Pak.Int.Con. SD 64.09 66.90 64.00 64.09 0.00 302TRG Pakistan Ltd. 1.15 1.15 1.13 1.15 0.00 522,373Murree Brewery 63.73 65.00 63.52 63.73 0.00 82Shakarganj Food 5.25 4.25 4.25 4.25 -1.00 500Shezan Inter. 110.07 114.41 110.07 110.07 0.00 2Hala Enterprise 7.00 7.00 6.90 7.00 0.00 200Pak Elektron Ltd. 3.55 3.68 3.42 3.60 0.05 52,703Singer Pakistan 15.76 15.94 15.59 15.94 0.18 503Tariq Glass Ind. 8.20 8.45 8.25 8.27 0.07 2,836Grays of Cambridge 23.75 23.75 22.60 23.75 0.00 30Shifa Int.Hospitals 28.58 29.50 28.58 28.58 0.00 1Hum Network Ltd. 16.00 16.00 16.00 16.00 0.00 500Media Times Ltd 8.58 9.58 7.60 7.64 -0.94 5,181P.I.A.C.(A) 1.80 1.94 1.75 1.77 -0.03 2,188P.I.A.C.(B) 5.42 5.42 4.42 5.42 0.00 3Pak Hotels 28.29 29.70 28.29 28.29 0.00 3Pak Services 138.65 142.00 138.65 138.65 0.00 2P.T.C.L.A 10.17 10.25 10.15 10.18 0.01 179,925Telecard Limited 0.79 0.85 0.75 0.80 0.01 109,990Wateen Telecom Ltd 1.75 1.89 1.75 1.79 0.04 83,042WorldCall Telecom 0.90 0.98 0.85 0.90 0.00 642,070Sui North Gas 16.44 16.50 15.99 16.00 -0.44 6,231

SYMBOl OPen hiGh lOw CurrenT ChanGe vOluMe

Oil and GasAttock Petroleum 423.94 427.49 418.00 419.23 -4.71 17,758Attock Refinery 111.52 111.89 109.30 109.78 -1.74 676,554Burshane LPG 20.92 21.96 21.96 21.96 1.04 1,025Byco Petroleum 6.54 6.60 6.49 6.56 0.02 150,330Mari Gas Co. 86.02 86.50 84.40 84.52 -1.50 26,943

ChemicalsArif Habib Co SD 27.81 28.27 27.56 27.73 -0.08 826,402Clariant Pakistan 152.00 153.00 145.10 146.77 -5.23 19,380Dawood Hercules 31.18 32.73 31.19 32.73 1.55 95,093Descon Chemical 1.45 1.60 1.40 1.45 0.00 302Descon Oxychem 3.89 4.12 3.68 3.99 0.10 218,737

Industrial metals and MiningCrescent Steel 19.01 18.69 18.69 18.69 -0.32 1,765Dost Steels Ltd. 1.19 1.20 1.10 1.20 0.01 13,148Huffaz Seamless Pipe 8.84 8.90 8.40 8.84 0.00 2Int. Ind.Ltd. 28.56 29.90 28.00 29.79 1.23 46,509Inter.Steel Ltd. 9.99 9.99 9.85 9.87 -0.12 26,518

Construction and MaterialsAl-Abbas Cement 2.25 2.29 2.25 2.25 0.00 25,600Attock Cement 51.97 52.69 51.50 52.01 0.04 42,526Cherat Cement 6.97 7.15 6.72 6.80 -0.17 1,017D.G.K.Cement 19.00 19.24 18.40 18.78 -0.22 1,405,226Dadabhoy Cement 1.41 1.89 1.41 1.41 0.00 2

General IndustrialsCherat Packaging 27.83 27.83 27.00 27.00 -0.83 8,000ECOPACK Ltd 4.04 3.89 3.82 3.86 -0.18 13,500Ghani Glass Ltd 40.00 41.49 40.00 40.05 0.05 835Merit Pack 19.35 19.35 18.35 19.35 0.00 35Packages Limited 79.00 80.90 79.00 79.00 0.00 257

Industrial EngineeringAdos Pakistan 4.56 5.00 4.56 4.56 0.00 103AL-Ghazi TractSPOT 189.77 196.00 189.77 192.47 2.70 3,220Hinopak Motor 70.05 70.05 67.00 70.05 0.00 67K.S.B.Pumps 25.25 23.99 23.99 23.99 -1.26 24,995Millat Tractors Ltd. 378.21 379.50 373.01 373.78 -4.43 5,431

Automobile and PartsAtlas Battery Ltd. 166.15 164.10 160.00 161.78 -4.37 2,981Atlas Engineering 58.00 58.00 58.00 58.00 0.00 5,017Atlas Honda Ltd. 121.50 126.00 125.51 125.98 4.48 300Dewan Motors 1.91 2.25 1.89 1.89 -0.02 1,008Exide (PAK) 159.96 159.90 158.00 158.03 -1.93 1,130

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

Mutual Funds

Fund Offer repurchase nav

Alfalah GHP Cash Fund 501.2900 501.2900 501.2900 Askari Islamic Asset Allocation Fund 114.7196 111.8516 111.8516Askari Islamic Income Fund 103.6501 102.6136 102.6136 Askari Sovereign Cash Fund 100.6900 100.6900 100.6900 Atlas Income Fund 519.3500 514.2100 514.2100 Atlas Islamic Income Fund 519.0900 513.9500 513.9500Atlas Money Market Fund 516.9700 516.9700 516.9700 Atlas Stock Market Fund 453.1500 444.2600 444.2600 Crosby Dragon Fund 82.9800 81.3500 81.3500

Fund Offer repurchase nav

HBL Money Market Fund 100.2768 100.2768 100.2768 HBL Multi Asset Fund 87.0103 85.3042 85.3042 HBL Stock Fund 97.6745 95.2922 95.2922 IGI Income Fund 101.8987 100.8898 100.8898IGI Stock Fund 112.3545 109.6141 109.6141 JS Principal Secure Fund I 121.5000 111.5200 117.3900 JS Principal Secure Fund II 104.1200 96.5000 101.5800 KASB Cash Fund 0.0000 0.0000 100.1087

Markets

Friday, 23 December, 2011

06

top 10 sectors

49% 01%Construction & Materials

Chemicals Real Estate Investment

03%Electricity

01%02%

Fixed Line Telecommunication

17%Equity Investment Instruments

Financial Services

09%Banks10%Oil & Gas04%Personal Goods04%

International Oil PriceWTICrude Oil

$99.05

BrentCrude Oil

$107.71

STOCK MARKET HIGHLIGHTS

Index Change Volume Market ValueKSE-100 11306.10 +37.55 27,645,652 1,688,021,685LSE-25 2856.33 +49.72 708,663 17,311,545ISE-10 2587.41 -39.77 8,800 468,645

Major Gainers

Company Open High Low Close Change TurnoverUniLever Pak Ltd. 5400.57 5550.00 5302.11 5547.50 146.93 132Nestle PakistanXD 2568.03 2696.43 2640.00 2696.43 128.40 191Siemens Pak 811.37 851.93 780.01 848.60 37.23 138Wyeth Pak Limited 747.92 785.31 711.00 785.05 37.13 191Engro Corporation 94.21 98.89 93.12 98.54 4.33 5,152,320

Major Losers

Millat Tractors Ltd. 373.78 373.78 363.05 364.74 -9.04 13,811AL-Ghazi TractorsXD 182.47 174.50 173.35 173.44 -9.03 2,857P.S.O. 234.03 235.50 230.26 231.21 -2.82 144,161Pak Oilfields Ltd. 355.99 356.99 353.01 353.20 -2.79 248,905Attock Cement 52.01 51.40 50.00 50.08 -1.93 28,478

Volume Leaders

Engro Corp 94.21 98.89 93.12 98.54 4.33 5,152,320Fatima Fert.Co. 22.82 23.27 22.80 23.17 0.35 3,354,550Fauji FertilizerXD 152.43 155.53 151.76 154.35 1.92 2,376,847Hub Power Co. 34.50 34.75 34.30 34.58 0.08 2,159,577Fauji Fert BinXD 47.11 47.85 46.60 47.59 0.48 1,958,623

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

Gold 24K 54,005.00 46,981.00 1,611.00Gold 22K 51,608.00 44,245.00 –Silver (Tezabi) 986.00 846.00 35.05Silver (Thobi) 1025.00 880.00 –

Interbank RatesUS Dollar 89.6626UK Pound 140.8869Japanese Yen 1.1482Euro 117.4849

Buy SellUS Dollar 89.60 90.60Euro 116.08 118.07Great Britain Pound 139.50 141.74Japanese Yen 1.1350 1.1496Canadian Dollar 86.38 89.13Hong Kong Dollar 11.32 11.63UAE Dirham 24.25 24.57Saudi Riyal 23.76 24.04Australian Dollar 89.53 92.62

PRO 23-12-2011_Layout 1 12/23/2011 12:30 AM Page 6

Friday,23 December,2011

news

07

KArAChI

JAVEd MAhMOOd

AFTer government’s decision toimpose Gas infrastructureDevelopment Cess on different

industries, including fertiliser sector, feedstock gas’ price for fertiliser sector wouldincrease from existing rs102 per mmbtu tors299 per mmbtu, an increase of rs197 permmbtu which would result in increase ofurea price by rs250 to 300 per 50kg bag,sources told Profit. Government has alsoincreased the prices of fuel gas for fertiliserplants by rs15 from current rs433 to rs448per mmbtu. Cess would be charged from 1stJanuary 2012, said sources. Gas infrastructure Development Cess Billwhich has been passed by National Assemblyand Senate both for imposing cess ondifferent industries including fertiliser sectoris likely to increase feedstock gas prices by200 per cent. Price hike in feed gas costwould result in increase of urea price byrs250 to 300 per 50kg bag. NationalAssembly of Pakistan approved two moneybills to give free hand to the federalgovernment to fetch around rs38.39 billionevery fiscal year by imposing Gasinfrastructure Development Cess andPetroleum Levy.rise in feed gas price by 200 per cent will

create cost vacuum of rs250 per bag whichhas to be filled by a price increase in orderto negate the impact. Government says thisdecision has been taken to meet the heftyexpenditures of several projects includingiran Pakistan (iP) Pipeline, TurkmenistanAfghanistan Pakistan india (TAPi)Pipeline, LNG import and LPG supplyenhancement projects. A major portion ofaround rs11.10 billion would be gatheredfrom the fertiliser sector, rs1.87 billionfrom CNG station, rs5.88 billion fromindependent Power Plants (iPP’s), rs4.62billion from industrial sector and rs0.460billion from Pakistan Petroleum Limited(PPL). OGrA has already tabled a proposalto increase the gas price in the country by15 per cent that would also bring an impactof rs45 in proposed per mmbtu price offeed stock gas for fertiliser sector. Fertiliserplants use 80 per cent of the gas as feedstock while remaining 20 per cent is usedas fuel to run the plants.The imposition of the gas cess would makethe urea expensive for the farmers whomay resort to using lesser urea due toerosion of purchasing power of thefarmers. This measure is expected toaggravate food inflation as the rise in costwould be passed on to the end consumersand may lower crop yields due to lesserurea consumption.

KArAChI

THe Advances to Depositratio (ADr) havedrastically dropped to 62

per cent by end of November 2011compared to 68 per cent at end ofCY10. The Advances currentlystand at rs3,356 billion comparedto rs3,494 billion last year. Thisdeclining trend in ADr isprimarily due to banks’ reluctanceto opt for private sector lendingon fear of rising NPLs especiallysince economic situation is criticaland energy crisis is likely toexacerbate. moreover,government’s increaseddependence on the banking sectorto finance its deficit is crowdingout the private sector. This currentADr is the lowest since September2003 when it was hovering around60 per cent.During the period, governmentborrowing from banking sector hasrisen by 92.7 percent to rs2,430billion compared to rs1,260 billionin the corresponding month lastyear. The investment to Depositratio has reached 54.7 per cent by

end of November 2011. BeforeCY11, such a high iDr situationwas witnessed in 2003 when itpeaked at 46 percent in September2003. Banking sector deposits byend of November 2011 havereached rs5,415 billion, showingan increase by 5.7 per cent sinceDecember 2010. During the sameperiod Advances have witnessed acontraction of 3.9 per cent as thebanks continue their preference forgovernment securities. Thissubsequently has resulted in banks’investments to rise by 40.9 per cent(since December 2011) by end ofNovember 2011. Advances toDeposit ratio (ADr) has droppedto 62 per cent in Nov-11.On mom basis, the iDr hasjumped by 4 per cent. This isprimarily attributed to conversionof Power Holding Company TFCsinto TBill and PiBs to the tune ofrs391 billion. SBP, since July2011 has aggressively slasheddiscount rate as it was aiming toboost economic growth andprivate sector lending, however,trend has depicted no change.Analysts at the Arif HabibLimited (AH) research say that

bank’s investment in treasurybills has jumped by 39.5 per centsince December 2010 fromrs1,264 billion to rs1,763 billionby end of October 2011.moreover, sector’s exposure togovernment PiBs and Sukuk hasjumped by 34.5 percent and 63.9percent since December 2011 toreach rs285 billion and rs196billion respectively.The current trend of banks’preference going for saferinvestment in governmentsecurities will in all likelihoodcontinue, even as SBP has cut thepolicy rate by 200bps to 12 percent. moreover, with no furthercut in policy rate is expected atleast till July 2011, contraction inspreads will be limited henceNims are unlikely to suffer amajor decline. Our top pick in thesector is mCB, which is offering66.7 percent upside to Dec -12.The bank is expected to post netearnings of rs21.5 billion in CY11,a rise of 28 per cent YoY. Weexpect the bank to pay cashdividend of rs3.0/share andbonus of 10 per cent along withits full year results. JAVEd MAhMOOd

Gas Cess to raise urea prices by rs300 advances to deposit ratio decline

Zong CeO, Fan Yunjun

ISLAMABAD

AMER SIAL

eCONOmiC CoordinationCommittee (eCC) of cabi-net’s steering committee oniran-Pakistan (iP) pipeline

has finalised a consortium of indus-trial and Commercial Bank of China(iCBC) and Habib Bank Limited as fi-nancial advisor for the project. An of-ficial source said the decision wasmade at the meeting of the steeringcommittee, chaired by Petroleumminister Dr Asim Hussain and at-tended by Foreign minister Hinarabbani Khar, Chief ministerBalochistan Nawab Aslam raisani,Chairman Federal Board of revenue,Chairman Board of investment, Sec-retary Finance, Acting ChairmanOGrA, Chairman eOBi, mD PArCO,

representatives ofLaw Division,

P l a n n i n gCommis-

s i o n ,

National Bank of Pakistan and othersenior officers.

The committee decided to rec-ommend appointment of financialconsultant for iP project to eCC forapproval. The financial advisor willassist inter State Gas Systems Lim-ited (iSGS) in determining an opti-mal capital structure and financingplan for the project and for provid-ing political and commercial riskcover. it will be responsible formanaging entire transaction upto fi-nancial close including help in ar-ranging financing.

Pakistan is estimated to face ashortage in natural gas supply whichis projected to increase from 1.6 bcfdin 2011-12 to over 2.5 bcfd in 2014-15.iP pipeline project will bring initially750 mmcfd gas which will be in-creased to 1.05 bcfd. First gas flow isexpected in 2014. The project involvesconstruction of 781 km gas pipelinefrom iranian border to Nawabshah toinject gas into transmission system of

two gas util-

ity companies. estimated cost of theproject on the Pakistani side is esti-mated at $1.2 billion. According to anofficial statement the steering com-mittee on iP pipeline and Turk-menistan-Afghanistan-Pakistan-india (TAPi) pipeline projects, reaffirmedits commitment to go ahead withmajor gas projects. Secretary Petro-leum ijaz Chaudhry briefed the com-mittee on progress made on iP andTAPi projects.

managing Director inter State GasCompany Ltd (iSGCL) mobin Saulatgave a detailed presentation on ap-pointment of financial advisor, imple-mentation of iP gas pipeline project,security of iP pipeline during routesurvey and construction, and signingof TAPi Gas Sale Purchase Agreement(GSPA). The committee agreed inprinciple to recommend proposals re-garding implementation of iP andTAPi gas pipeline projects to eCC andappointment of financial consultant.These proposals include governmentbacked guarantees, model of financialconsultancy and gas pricing formulafor both pipeline projects.

The government has already de-cided to dedicate imported gasthrough iP pipeline for the powersector as power shortage is projectedto increase over 11,000 mW in nextfew years. The government is work-

ing to start process for setting up newindependent Power Producers (iPPs)of 5,000 mW cumulative capacity, sothat they should be ready for com-missioning by the time natural gasstarts flowing from iP pipeline in De-cember 2014. Official estimatesbased on the current crude oil priceproject the monthly gas import billwill be in the tune of $200-250 mil-lion, which was lowest when juxta-posed with other options, namelyHSFO and rLNG.

Use of iP gas is estimated to resultin an average annual savings of $1.2billion against using rLNG as alternatefuel at crude price of $ 100 per barrel.The present value of total savingscomes to $10.9 billion. Using HSFO asan alternate fuel indicates that iP gaswill result in average annual savings of$1.7 billion at crude price of $100 perbarrel. The present value of total sav-ings comes to $15.3 billion. The re-cently imposed levy on natural gaswhich help generate rs45 billion perannum, which government plans to useto develop the gas infrastructure for theimported Liquefied Natural Gas(LNG), iran Pakistan (iP) gaspipeline and Turk-m e n i s t a n ,Afghanistan, Pakistanand india (TAPi) gaspipeline projects.

lPG to becomemost expensivefuel of Pakistan

LAhore

STAFF REPORT

LPG prices are expected to touch rs150 per kilogramafter an increase of rs14 per kilogram from 1stJanuary, after imposition of the newly legislated

petroleum levy on local LPG production, said LPGAssociation of Pakistan spokesman Belal Jabbar. As recentas two days ago Federal minster for Petroleum Dr AsimHussain expounded government’s intent of exemptingLPG from sales tax in order to reduce its price and bring itnearer to that of CNG. However, the notification ofpetroleum levy issued on 15th December belies that claim.Petroleum Products (Petroleum levy) (Amendment) Act2011 was passed by National Assembly on 25th Novemberand received the assent of the President on 13th December.Through the act amendments have been made in the 5thSchedule to impose a levy on LPG amounting to rs11,486per tonne. The levy which will add 16 per cent to the pricebeing charged by LPG producers and this will ultimately beborne by consumers said Belal. LPG prices are expected toincrease by rs150 and rs600 for domestic and commercialcylinders respectively. retail prices could climb as high asrs150 per kilogram, making LPG the most expensive fuel inPakistan. LPG companies have imported record quantitiesin the month of December and sold their product based on aweighted average price of local and imported LPG which hashelped in keeping prices affordable. However,implementation of the levy which seeks to equalise the priceof local product with imported products in order to benefit

certain importers will result in a sharp escalation inprice. imposition of the levy is pure discriminationagainst local production which accounts for 80 percent of the country’s requirements. Additional local

production to the tune of 600 tonnes can bebrought online within a short period and at

a fraction of the cost of imports; yetgovernment is keen to promote

imports. Government’s decision tomake LPG expensive is at odds

with its policy to encourageits use to alleviate

shortage ofnatural gas

said Belal.

g iP pipeline project to bring gas up to 1.05 bcfd g First gas flow expected in 2014 g use of iP gas toresult in average annual savings of $1.2 billion

Zong and Manchester United, both are operating in ahighly competitive environment. Both share manycommon traits such as teamwork and commitment toexcellence. So one can imagine what theircollaboration can bring to the mobile users in Pakistan

ICBC-HBL consortium appointed financial advisor

iP gas pipeline project

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