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Bears return with venom, index down 98pts Page 03

Wednesday, 14 March, 2012

Regulations

governing system

audit of KSE

brokers revampedISLAMABAD: To enhance trans-parency and reinforce investor confi-dence in the capital market, theSecurities and exchange Commissionof Pakistan (SeCP) has revamped reg-ulations governing system audit of thebrokers of the Karachi Stock ex-change (KSe). The revised regulationsaim to strengthen monitoring andcompliance of market intermediarieswith the applicable regulatory provi-sions and improve enforcementpower of the regulators. The scope ofthe audit has been broadened to in-clude broker’s regulatory compliancewith various applicable laws, rulesand regulations. This includes com-pliance with the requirement of for-mulating and implementing effectiveknow your customer and customerdue diligence internal policies at bro-ker level and frameworks that rein-force requirements of the Anti-MoneyLaundering Act.Under these regulations, brokers iffound non-compliant with any regula-tory requirements in an audit exercisewill be subject to limited scope auditby the exchange in the following sixmonths to check rectification of non-compliances highlighted in the auditreport. For effective deterrence ofnon-compliances, the limit of fineshas been increased - along with em-powering the exchange to have thebroker audited/inspected at any time,in addition to the routine audits.It is expected that the revised regula-tions will facilitate in achieving theobjectives of market integrity and in-vestor protection while putting inplace effective checks and balances todeter, detect and rectify instances ofmarket abuse. Meanwhile, the SeCPhas also advised the exchange to initi-ate work on developing its capacityand capabilities to conduct in-houseaudits of its brokers to ensure im-proved compliance and effective mon-itoring in line with best internationalpractices. STAFF REPORT

KARACHI

ISMAIL DILAWAR

The analysts see the coun-try’s trade imbalance takinga breather during themonth of February (2012)as Pakistan Bureau of Sta-

tistics (PBS) data shows the gap declin-ing by 15.8 percent month-on-month(MoM).

“This was reinforced by four percentMoM increase in exports and five per-cent decline in import balances,” saidFarhan Bashir Khan of InvestCap.

During 7MFY12, country’s oil billsurged by 35 percent YoY, while its con-tribution in total imports remainedbounded to 35 percent compared to 31percent same period last year.

Although the oil prices rallied duringthe month of Feb-12 (+5 percent MoM),the impact on import bill as per PBS fig-ures appear muted.

“Nevertheless, we expect impact ofhigher oil prices to be reflected in com-ing months,” said Khan.

On the other hand, the analyst said,with bumper wheat crop expected thisseason, estimated wheat export of twomillion tons could yield additional $ 500million for the country’s exports duringFY12.

While it remains to be seen howtrade performance would eventually bereflected in country’s balance of pay-ment during Feb-12, the current accountdeficit is expected to land in the vicinityof $ 200 million, accounting for 1.3 per-cent of GDP, for the month, further sup-ported by improved remittances thatincreased by 4 percent MoM).

In this manner, we expect cumula-tive current account deficit to reach $2.8 billion during 8MFY12, two percentof GDP on annualized basis.

“We further expect full year deficit tostay in the same range relative to GDP,”Khan said.

So far, the central bank has managedto keep exchange rate from slipping fur-ther (0.8 percent depreciation againstUSD CY12TD, compared to 5 percentJul-Dec11) while also keeping the cur-rency market stable (PKR/USD move-ments 42 percent less volatile duringCY12TD compared to 1hFY12).

“however, the same comes at aprice,” he said.

Average injection under OMOs has

crossed Rs 300 billion in recent sessionsindicating the drying domestic liquidityat the cost of intervention at the cur-rency counter.

Although such injections might benecessary to keep markets liquid, it re-mains to be seen how any excess liquid-ity would be reflected in the system(depending upon the quantum of mop-ups) once foreign exchange reservedwindle to a point where a free floatingregime becomes inevitable.

As per latest figures, reserves withSBP have fallen below $ 12 billion, down

15 percent since Jun-11, although banksare seemingly more liquid with $ 4.4 bil-lion, up 29 percent since Jun-11.

“We deem it is only a matter of timebefore liquidity at foreign counter driesup (current and more recently even fi-nancial accounts have been running indeficits) and eventually see more seriousconsequences, specifically on inflationduring FY13,” said the analyst.

As far as currency is concerned, wesee recent spell of stability would even-tually fade away, assuming no signifi-cant change in the flow of foreign funds.

g Analysts see no instant knee-jerks in external accounts g Cumulative C/A deficit to reach $ 2.8bn during 8MFY12g More serious consequences ahead on inflation side during FY13

Bumper wheat crop may fetch $500mn extra in exports during FY12

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news02Wednesday, 14 March, 2012

MoC accepts Dubai Foreign Trade Ministry’s invitation

KARACHI

STAFF REPORT

Aiming to market investment demanding projects of the country abroad, Pakistan has decided to at-tend the Annual Investment Meeting’s (AIM) Conference 2012 in Dubai in May this year.Accepting the invitation forwarded by Sheikha Lubna Bint Khalid Al Qassimi, the UAe Minister ofForeign Trade, Makhdoom Amin Fahim Commerce Minister has decided to fully participate the in-ternational event to invite foreign investment for most important projects of the country.According sources at TDAP, the ministry has started preparation and arrangements for the impor-tant 2nd edition of AIM which expected to highlight financing options and emphasize trading possi-bilities in frontier and emerging markets with a strong focus on high growth sectors.The event which is called a global emerging market-led FDI conference and investment trade fair,initiated in 2011, could also prove a good opportunity to attract foreign investment for accomplish-ing various projects. Marketing the projects of various sectors abroad could increase the UAe’s FDIin the country, they claimed. During the event to be held from May 1 to 3, 2012, the representativesof participating countries would introduce case studies from private sectors executives and govern-ment delegates covering developmental initiatives, real-time investment opportunities, foreign tradepolicies, financing options and FDI statistics of their respective countries. In the event, Business toBusiness meeting and round table conferences and exhibitions were also planned to be held in vari-ous sectors including agribusiness ,health sector ,education ,telecommunication, commodities & ex-change, property development, food & beverage industry ,military offsets, foreign trade ,economy,finance ,planning etc. It is claimed that during the AIM 2011 representatives from at least 80 coun-tries had attended the event while finalizing agreements/MoUs worth $ 10 billion.

KARACHI

GHULAM ABBAS

Sugar price may jump further in next fewmonths Commodity smuggled toAfghanistan, Iran during last couple ofmonths Though the farmers growing Sug-arcane in the country are crying for lowprices of their products, the jump in itsprice to over Rs200 per 40 kilogram maycause further increase in the rate of thehighly consumed commodity during nextfew months.

As the production of sugarcane thisyear has been reported at around 4.7 mil-lion tons against the expected figure of 5million tones, the growers have increasedthe price of agricultural product to overRs 200/mon or Rs 5/kg as compared toprevious rates Rs 3-4/kg, a sugar millerwho did not want to be named claimed.

Besides, a good quantity of sugar, heclaimed, has been smuggled toAfghanistan and Iranthe two neighboringcountries during the last couple ofmonths due to the huge difference inprices of the commodity.

The commodity, which was availableat Rs 45 to Rs 48/kg in Pakistan wasbeing sold at retail prices of Rs 100/kg to105/kg in the two neighboring countriestechnically forcing the traders here to sale

the commodity abroad through the smug-gling or illegal means, he said adding thatcurrently some quantity of sugar wasbeing sent to Tehran through the bartersystem. “The Iranian demand of 0.2 mil-

lion tones of sugar from Pakistan maderecently also proves that the commodity,because of its price differential, has ahigh demand in the foreign country,” heclaimed.

he claimed that the imported sugarin Afghanistan was being reached inKabul with the landed cost of over $ 750excluding taxes which makes the whole-sale rate of the commodity to at least Pak-

istani Rs 89 to Rs 90/kg. however, thesame commodity just outside the borderwas available at Rs 52 to Rs 59/kg en-couraging the smuggling of the highlyconsumed commodity.

Adding weight on his claim expectedjump in sugar price from May to Septem-ber this year, the miller said that as theconsumption of the commodity would beincreased in summer season, the price ofthe kitchen item could be around Rs 65 toRs 70/kg during the season.

he, however, said that the farmerswho were already reconsidering to growother crops due to the lower price theyobtained by the fresh crop, should be fa-cilitated with more than Rs 250/mon. hefeared that the low production next sea-son would also cause prices to rise, andagain, which in turn would attract morefarmers the following year to grow sugar-cane. On the other hand sources claimedthat the growers largely were even unableto get the government’s set a price ofRs3.75/kg, from sugar millers. In addi-tion, production costs have risen, whichhas further squeezed margins for mostfarmers. It is worth mentioning herethat the price of sugar, during the lastcouple of days have jumped by Rs 7/kgin retail market after a historic declineup to Rs 48/kg.

Sugarcane prices go up to over Rs200/mon

LAHORE

STAFF REPORT

The General Manager Sales,Sui Northern Gas PipelinesLimited (SNGPL) answeringto a question in the Corpo-rate Briefing Program at

LSe stated that the Un-accounted forGas loss (UFG) or line loss increased inthe past due to conversion of distribu-tion of gas from bulk consumers to do-mestic consumers. SNGPL has startedleakage surveys and modern equipmentto detect underground leakage has beendeployed. All these efforts have reducedUFG to 11.07per cent in December 2011as compared to 12.4per cent in June2011 and the Company plans to reduceit further by June 2012, he added.

Mr. Rehan Nawaz, General ManagerSales and Mr. Sagheer-ul-hassan, Sen-ior General Manager Audit of SNGPLwere addressing the members, in-vestors, analysts & media representa-tives at the Corporate Briefing Programof the Company organized by the LahoreStock exchange. Mr. Sagheer-u-hassan

presented a detail overview of the Com-pany’s operations and its financial per-formance.

Speaking on the occasion, Mr. has-san said that the SNGPL is an integratedgas transmission and distribution com-pany which was incorporated in 1963.Now as on September 30, 2011 the Com-pany is serving over 4 million domestic,commercial and industrial consumerswith Transmission Pipelines of 7,556Kilometers and Distribution Mains &Service Lines of 82,988 Kilometers andthe number of consumers are expectedto register an increase of 278,400 in FY2011-2012. The overall gas consumptionhas increased to 581.71BCF over a pe-riod of 10 years with major increase inCNG sector to 14.8per cent in 2010-2011as compared to 0.4per cent in 1999-2000. Further, the consumption by Cap-tive Power has increased to 8.43percent, he added.

Answering to a question from in-vestors on shortage in supply of gas, Mr.Rehan Nawaz said that during each win-ter season, the domestic sector con-sumption increases many folds resulting

in a large gap between demand and sup-ply. Since there is a nominal increase insupply, the gap is met through curtail-ment of gas supply in various sectors.During the current winter months, gassupply has reduced by 125-150 MMCFDwhere the consumption has increased by200 MMCFD and the domestic sector isalso facing low pressure conditions, headded.

Mr. Aftab Ahmad Chaudhry, Man-aging Director, Lahore Stock exchangementioned that in the current scenariowhere the liquidity is drying up, highprofile companies like Sui Northern GasPipelines Limited need to establish in-vestor relations department to meet theinformational needs of investors. Moreinformation sharing translates good liq-uidity in stock of the company, Mr.Chaudhry added. he further mentionedthat the results of Corporate BriefingPrograms are far reaching and LSe plat-form is available for listed companies toshare their performance, managerial ef-ficiency and future plans with existingand potential investors. The GM Auditlauded the efforts of the current man-

agement & the directors of the exchangein introducing such programs for in-creasing interaction between the in-vestors and companies. The CorporateBriefing Program is an initiative of theLSe to increase market efficiency by re-moving information disparity in themarketplace. Market leaders are invitedthrough this program to present theircompany’s performance and futureplans to the investment public.

The Lahore Stock exchange consid-ered the innovation leader in the capitalmarket of Pakistan has taken numerousinitiatives in the past that have changedthe way the capital market now operatesin Pakistan. The exchange has in thepast too focused on increasing in-vestors’ awareness & education level forthe betterment of the market. Aware-ness roadshows, seminars, briefings toeconomic journalists, Training Instituteare some of the initiatives taken in thepast in this regard. The Corporate Brief-ings Program is another step in this di-rection which has received muchdeserved praise from the investmentcommunity.

SNGPL’s leakage surveys

reduce UFG to 11pc

Branchless banking

expands by 16pc

in 2QFY12: SBP

KARACHI

STAFF REPORT

The branchless banking network incountry expanded by 16 percent dur-ing the second quarter, October-De-cember 2011, of the current fiscalyear (FY2011-12) to reach 22,512agents covering the entire length andbreadth of the country, said the cen-tral banks’ Branchless BankingNewsletter’ released Tuesday. Ac-cording to the publication, the num-ber of Branchless Banking accountsincreased by 40 percent to 929,184in October- December, 2011 periodas compared to the previous quarter.The total Branchless Banking de-posits jumped by 169 percent to Rs503 million in the quarter under re-view as compared to the previousquarter, it said, adding that thenumber of Branchless Bankingtransactions during the secondquarter surged by 30 percent to 20.6million while the value of transac-tions showed a growth of 35 percentto reach Rs. 79,410 million.The average size of branchless bankingtransaction was Rs. 3,855 while the av-erage number of daily transactions was228,855. This shows that mobilephone technology and agent-basedbanking are helping access to financialservices by the hitherto unbankedpoor, the Newsletter said, adding thatby the end of December 2011, morethan 929,000 customers have beenregistered as m-wallet users.The Newsletter said that innovativebranchless banking models havebeen penetrating in all areas of pay-ments such as utility bills, Govern-ment-to-Persons (G2P),Persons-to-Persons (P2P) paymentswhile scaling up other services relat-ing to deposits and loans.Bills payment and top-ups remainedthe dominating activity in the quar-ter under review with 53 percentshare in total numbers, followed byfund transfers and deposits withshare of 39 percent and 8 percent re-spectively, it said and added that theP2P payments remained the mostpopular mechanism with 74% sharein the total funds transfer. Initialhigh concentration in P2P transac-tions suggests that the industryneeds to develop a viable value-proposition for registration and acti-vation of mobile accounts, it added.

Punjab govt vows to make

province economic hub

LAHORE

STAFF REPORT

Punjab government is making all out efforts to turnprovince into a hub of economic activities. It is not onlythe energy shortage but Infrastructure; education,health and Transportation sectors are also being givenequal importance and focus to put economy back onrails. This was stated by Advisor to Chief Minister Pun-jab on Trade Affairs Mohammad Ali Mian while speak-ing at the Lahore Chamber of Commerce and Industryon Tuesday. LCCI President Irfan Qaiser Sheikh, SeniorVice President Kashif Younis Meher, former SeniorVice Presidents Sohail Lashari, Sheikh Mohammad Ar-shad, former Vice President Aftab Ahmad Vohra and alarge number of executive Committee Members alsospoke on the issues being faced by the trade and indus-try in Punjab. Mohammad Ali Mian said that the ChiefMinister Mian Shahbaz Sharif was well aware of thediscrimination in supply of gas being done with the in-dustry in Punjab and has taken up the issue with theauthorities at Federal level.

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Cathay Pacific releases combined

traffic figures for February 2012

KARACHI: Cathay Pacific Airways todayreleased combined Cathay Pacific andDragonair traffic figures for February 2012that show the growth in passenger num-bers falling short of capacity growth, whilecargo and mail tonnage showed a slight in-crease over the same month last year.Cathay Pacific and Dragonair carried atotal of 2,117,621 passengers in February –a year-on-year rise of 4.0 per cent – whilethe passenger load factor dropped by 2.8percentage points to 74.5 per cent. Capac-ity for the month, measured in availableseat kilometres (ASKs), was up by 8.8 percent. For the year to date, passenger num-bers are up by 8.1 per cent compared to acapacity increase of 8.8 per cent.

Bank of Punjab announces women

entrepreneur financing scheme

LAHORE: This March, in celebration ofInternational Women’s day, Bank of Pun-jab has launched the Women entrepre-neur’s Finance Scheme (WeFS) a one ofits kind financing scheme. Through thisscheme, Rs2 billion has been allocated forthe empowerment of women entrepre-neurs, enabling them to launch businessesor expand their operations across Punjab.To familiarize and project the merits ofthis scheme, BOP established a stall at theWomen’s day function organised by theGovernment of Punjab at Al hamra Cul-tural Complex, Qaddafi Stadium Lahore.Women had a great response to thescheme, and took a keen interest in themerits and conditions of the facility.

Qatar Airways rounds up

another successful year

DOHA: Qatar Airways participated in yetanother successful year at ITB Berlin – theworld’s largest travel show – by showcas-ing never-been-seen-before new in-flightproducts. The airline exhibited its latestsuite of amenity kits and its newly-un-veiled Boeing 787 Dreamliner Businessand economy Class seats, housed in a cus-tom-designed exhibition stand, which wasmaking its debut at ITB.The first of 60 Boeing 787s, of which QatarAirways is the Middle east launch cus-tomer, will join the fleet this summer.With 14 new routes being added to QatarAirways’ international network during2012, there was huge interest among visi-tors keen to learn more about the airline’sglobal expansion and about the New DohaInternational Airport, set to open at theend of the year. Qatar Airways Chief exec-utive Officer Akbar Al Baker hosted a pressconference on the opening day of the five-day event, announcing expansion planswith the launch of flights to Kilimanjaro(Tanzania), erbil and Baghdad in Iraq,

Belgrade in Serbia and the Myanmar capi-tal Yangon. These new routes will be partof an overall expansion during 2012, whichwill also see the launch of previously an-nounced services to the Rwandan capitalKigali starting March 21; Croatia’s capitalcity Zagreb starting from May 9; Perth inAustralia from July 3; and Mombasa(Kenya) on August 15. The european capi-tal cities of Tbilisi in Georgia and Baku inAzerbaijan were the airline’s first newroutes of 2012, which began February 1.

President ABF expresses concern

over 41 per cent rise in trade deficit

LAHORE: President American BusinessForum (ABF) Salim Ghauri has expressedconcerns over 41per cent increase in tradedeficit within first eight months of currentfiscal and said the country’s economywould have to pay the price of huge fiscaland trade deficits.Salim said the independent economicmangers fear that the fiscal deficit is likelyto touch 8per cent of the GDP by the endof current fiscal against projected 4percent or around by the government. he saidthe worst economic situation is beingtranslated into record low growth of LargeScale Manufacturing (LSM) sector, leadingto a contraction in the job opportunities.

EVO wireless broadband becomes

Pakistan’s widest network

ISLAMABAD: Pakistan Telecommunica-tion Company Limited’s (PTCL) eVOwireless broadband has become Pakistan’swidest broadband Internet network cover-ing 90 per cent of the nation’s populationin more than 180 cities and towns.eVO customers can now experience on-the-go wireless broadband Internet wher-ever they roam by connecting to eVDO RevA speeds of up to 3.1Mbps with eVO, eVOWi-Fi Cloud, eVO Tab and eVO Droid inmore than 180 cities across Pakistan. PTCLhas also recently expanded coverage of itsfastest Nitro Rev B network to 70 cities.Customers can now cruise with matchlessspeeds of up to 9.3Mbps with eVO Nitro’sRev B in more than 70 cities.

First Networking night

for MBA 2012 at LUMS

LAHORE: The first Networking night forthe MBA 2012 took place on the 2nd ofMarch, 2012 at LUMS. It was hosted bythe MBA Placement Office, the CorporateCommunications division of the SulemanDawood School of Business (SDSB). es-teemed organizations from the FMCG,Groups/Conglomerates, financial Institu-tions, Consultancy, Agriculture, Develop-ment & IT sectors participated in thisevent.

New Lahore City participates

in Build Pakistan 2012 Expo

LAHORE: New Lahore City (NLC), a col-laborative project of Zaitoon Group andRafi Group, participated in the Build Pak-istan 2012 – The International Construc-tion Materials, Property, Furniture, Stone &Technology exhibition & Conference. Thethree day expo was held at the expo CentreLahore from the 10th to the 12th of March.The Build Pakistan expo, which was heldfrom the 10th to the 12th of March, focusedon the immense potential of the buildingand construction industry in Pakistan.

LSM Summer Lawn Collection 2012

LAHORE: Introducing the splendid LSMSummer Lawn Collection 2012; Lakhanyunderstands fashion that ignites yoursenses and dresses you up in style. Withevery suit, our customers get extra fabricswith rich embroidered border, laces, pipingfabric, intricate designs of the ‘V’ neck pat-tern, including different prints of sleevesand many other accessories that turn yourfashion fantasies into wearing realities; pre-mium quality fabrics at an amazingly af-fordable price. Collection 2012 features themost comprehensive high quality yarn fab-rics in a range of colours, shades, textures,prints and mood combinations.

news

Wednesday, 14 March, 2012

03

CORPORATE CORNER

ISLAMABAD: A new record achieved: five Villashanded over in one day by Emaar Pakistan atCanyon Views Islamabad PRESS RELEASE

GUJRANWALA: Mr Hae Duck Lee, Head of TV/ AVdivision, Samsung Electronics along with MrHamayun Rasheed, owner of the concept shopand Mr. Ahmed Faazil, CEO- Orient Electronics,at the opening of Samsung Concept shop inGujranwala. PRESS RELEASE

KARACHI

STAFF REPORT

The day saw the benchmark100-share index decreasingby 98.89 points to13,283.65 points against13,382.54 points of Mon-

day. The same was absorbed above thedefined pivot levels viewed AbdulAzeem, an analyst at InvestCap.The an-alyst said, ““The KSe-100 index re-mained above the defined pivot level of13,350 pts, even though near the clos-ing time it took little selling pressure.”.The turnover of the Index remainedhealthy assisting the support for theIndex to climb more, reviewed AbdulAzeem.

The trading volumes at the ready-counter came to 313.592 million sharesfrom the previous day’s 576.823 mil-lion shares. The trading value also de-

clined and finished at Rs5.263 billionagainst Rs7.914 billion of the last ses-sion. The index hit the intraday highand low of 13,422.70 and 13,274.45points, respectively.

The market capital also slid toRs3.454 trillion from the previousRs3.476 trillion. Of the total 373 tradedscrip’s, 138 gained, 162 lost and 73 re-

mained unchanged. TRG Pakistan Ltdappeared as a volume leader with31.300 million of its shares traded atRs3.96 in the opening and Rs4.36 inclosing of the market.

The future market also came downin terms of turnover that declined to12.046 million shares from 15.744 mil-lion shares of last session.

Bears return with venom,index down 98pts

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