profit.com.pk

Saudis open the oil taps Page 02

Sunday, 26 February, 2012

KARACHI

STAFF REPORT

IN a fear to lose the domestic and internationalmarkets after trade liberalisation with India,Pakistani exporters have finally said no toimports from India. Recommending thegovernment to include all kinds of rice in theproposed negative list of trade with India, the

exporters have shown their serious concerns overthe recent developments of importing thecommodity from the neighbouring country. theimports of cheaper commodity from outside theborder would not only cause us loss of domestic, butalso international markets, including Afghanistan,Iran and Central Asian states, taufiq Ahmed Khan,former Vice Chairman Rice Exporters Association ofPakistan (REAP) said.He said the association, as it had earlier suggested,has recommended the Ministry of Commerce tokeep rice in negative list until a detailed study aboutthe impacts of trade liberalisation with India ondomestic market, growers and traders.Earlier in a statement, Javed Islam Agha, ChairmanREAP on Saturday said the decision of managingcommittee of REAP has unanimously decided thatall kinds of rice varieties should remain in thenegative list in the larger interest of rice industryand farmers, in general. He further said in thisconnection, the association had already sent a letterto the Ministry of Commerce.Refrying to the news items appeared in mediaregarding the import of rice from India, he said theimport of rice from New Delhi would badly hit localproduction, causing huge losses to bothexporters/traders and farmers because cheaperimport of agri-products from India will ruinagricultural production potential of the country.traditionally, the price of Indian basmati and otherrice varieties used to be at least $100-300/Mthigher than Pakistani rice varieties, but after thearrival of new crop in Oct-Nov 2011, India tookadvantage of its huge stocks, bumper crop and

devaluation of its rupee by 15-20 per cent andreduced their prices by 20-30 per cent. Now they areselling $100- 300/Mt cheaper than Pakistanibasmati and other varieties, such as Kianat(1121). Recently the government of India reduced theMEP on basmati rice from $900 to $700/Mt whichis far below the Pakistani basmati rice prices of$900- 1100/Mt. Earlier, the Indian government hadlifted the ban on export of non-basmati rice andallowed export of Rs2 million tonnes of non-basmatirice.Consequently, Pakistan has lost its brown ricemarket of EU of nearly 170,000 tonnes to India andis facing great difficulties for export of its basmatirice to Middle East and other countries of the world.the prices of long grain Pakistan rice had gone downdrastically which is hitting the farmers of Sindh whoare demanding compensation for their losses.Secondly, the free import of cheap Indianparboiled Pusa/1121 will reach the Afghanistanmarket by land route and ruin the little export thatPakistan is doing to Afghanistan and bring all theparboiling plants imported from India to astandstill. Once basmati and 1,121 sales areaffected, it will indirectly hit the farmers who willnot grow basmati rice in future and go for cheaperhybrid varieties threatening to close down the $2billion rice export of Pakistan.If the government allows the import of Indian riceinto Pakistan, then our farmers should also be giventhe facilities matching with the subsidies beinggiven to the Indian farmers, so that our farmers areable to protect their livelihoods. Indian governmentis giving about $30 billion in subsidies to itsfarmers. Whereas, the cost of urea and DAP is lessthan 50 per cent of the Pakistani prices and Indianfarmers are also getting cheaper electricity and fuel.therefore, no transit of rice from East to Westborders should be allowed. It is therefore, stronglyrecommended to Ministry of Commerce to kindlyinclude all varieties of rice in negative list, asrequested earlier by REAP to avoid dumping ofIndian rice in Pakistani market and losses to ourfarmers, traders, and exporters.

g Fear of losing local and international markets g Recommends government keeps rice in negative list

KARACHI

STAFF REPORT

At a time when there werefears of US recession andbanking stocks remainedunder pressure in 2011, large

private banks in the country postedabove average growth of 27 per cent in2011, said the analysts.“Our analysis is based on four largeprivate banks (based on bank depositsand branches), including HBL, UBL,MCB and ABL, which contribute tomore than 50 per cent share of thelisted private banks’ deposits andrepresent approx. 60 per cent of thetotal branch network,” said FarhanMahmood of topline Research.He said cumulative earnings of thesefour banks reached Rs66bn in 2011, up27 per cent from 2010. Amongst listedprivate banks, these four bankscontribute to 70 per cent of the marketcapitalisation. A bank-wiseprofitability shows UBL posted highestprofitability growth (39 per cent),followed by HBL (33 per cent), ABL(23 per cent) and MCB (15 per cent).thanks to higher return on advancesand better yield on government papers,the overall Net Interest Income (NII)of these four banks grew by 17 percent. this shows impressive corebanking operations as average 6-months KIBOR increased by70bps in 2011 compared to2010, while cost offunds remained onthe lower side.Similarly,the

analyst said, with overall improvementin trade activities, better opportunitiesin forex and money market, noninterest income of these big banksgrew by impressive 21 per cent.Moreover, restrictive lending resultedinto lower provisioning in 2011 whichstood at Rs21.5bn, down 10 per cent.“though we expect earnings growth toslightly cool down in 2012 amiddecline in interest rate, however,gradual recovery in economy andinfrastructure spending could createappetite for credit and will impactpositively on banks with lower ADR,”he said.Moreover, Farhan said, with decline ininterest rates, there is a highprobability that NPL accretion wouldslowdown in 2012 which could limitoverall provisioning.the ongoing global recession fear maynot impact local banks having noor very little exposureto global bondsand stocks, themarketobserverconcluded.

Private banks’ profitsgrow by 27pc in 2011

PRO 26-02-2012_Layout 1 2/26/2012 1:59 AM Page 1

news02Sunday, 26 February, 2012

KUNWAR KHULDUNE SHAHID

AS the Iraniansanctions ensure thatthe ante is upped onthe global crude oilrates – oil prices

hitting a nine month high onFriday, with Brent crude soaringup to over $125 per barrel – itseems as if it is going to be SaudiArabia to the world’s rescue asthe nation has raised oil exports.Ever since United Nation’snuclear watchdog issued itsscathing report against Iran’snuclear programme, touting it tobe within the realm of militaristicnature, there have beenapprehensions all over the worldregarding sanctions on Iranianoil. While any doubtingthomases, who might have raisedtheir eyebrows questioning therationale behind the sanctions,would have duly straightenedtheir eyes fearing Washington’sstick, but those thomases thatfeared oil price hike citing Iran’sconsiderable share in thesuppliers’ pie chart have beenvindicated.With the void of Iranian oilescalating prices, it is SaudiArabia that has come to the foreto fill that gaping hole with itsown black gold. And even thoughAsia might have evaded the

sanctions mousetrap, asexpounded in this space lastweek, but the impending EUembargo on Iranian oil wouldhave continued to exacerbate theprices. Another potentialdisastrous façade of this game isthat after the UNreport ostensibly‘confirmed’ tehran’sintentions, Israel hasalso thrown in its pre-emptive strike threatson Iranian nuclearsites in this tNt thathas long beenhankering after anexcuse to explode. this year has beenmarred withprecipitouslyescalating oil pricesever since tehranpulled out the Hormuzcard and threatenedto close the strait –which is the principalsupply route of Gulfoil. And this hike is of particularconcern for Barack Obama, who isalso facing the menace of gasprice hike in the US after heordered the delay of the KeystoneXL pipeline from Canada. UScitizens have been particularlyharsh on presidents who havepresided over gas and oil crises asRichard Nixon found out after the1973-74 embargo and Jimmy

Carter found out in 1980’selections; and hence, Obamawouldn’t want to follow suit andhas been vying to stabilise theprices ahead of November. this iswhere he has found an ally in theshape of the Saudi Kingdom.

the Saudi manoeuvrecomes amidst the USquest of tapping crudefrom the StrategicPetroleum Reserve,among other options,to cover for theIranian supplydisruptions. SaudiArabia has increasedoil exports over thepast week and haseven offeredadditional crude oil tothe biggest customersin a bid to control theprices. According tothe numbers beingflaunted, even ifRiyadh were tomaintain its exports at

9 million bpd it would connoterecord volumes from OPEC’srecord producer – at 11 millionbpd – which is a million morethan the numbers posted lastmonth. Of the 9.75 million bpdexported by Saudi Arabia inJanuary, 2 million was useddomestically, 6 million exportedto Asia and US had a 1.5 millionshare of the pie – a three-year

high. And these numbers are allset to inflate for the months ofFebruary, March and the monthsto follow with July’s EU embargoinstigation still very much insights.India’s Bharat Petroleum has alsotaken its emptying bowls andbarrels to the Saudi taps, and hasbeen eying higher supplies for2012 and 2013 from Riyadh’s oil-works. Saudi Arabia is already thebiggest oil supplier to India, andeven though New Delhi has as yetpaid no palpable heed to the USpolicy against Iran, it’s thesecurity over Saudi oil and thelack of it for the Iraniancounterparts that seems to beluring India and other countriesin the region as well. the US-Saudi collaboration toincrease oil supply has thrown aspanner into the works of the oiland game, and a dagger intotehran’s wallet. With SaudiArabia having the key to open upthe locked door of nuclearprogramme resolve from tehran,and not being afraid to pull it out,it is a sorry picture for the Muslimworld; as economic ramificationscontinue to expose and aggravatethe divide between the countriesin the Islamic domain.

The writer is Sub-Editor, PakistanToday. He can be reached atkhulduneshahid@gmail.com

LAHORE

STAFF REPORT

KISAN Board Pakistan(KBP) strongly reacting tothe news of withdrawal of

subsidy on imported urea bag andincreasing its prices by Rs300 perbag has urged the government to

immediately take back thisdecision.this demand was raised during ameeting of KBP President SardarZafar Hussein with the delegationof growers from Layyah andBhakkar districts. Growers alsoexpressed their grave concern overthe news of further increase in

electricity and diesel prices andalleged that agriculture hadreached to the brink of totaldestruction due to increase in theagricultural input prices.Growers also demanded increasingthe prices of cotton and saving thefarmers from the exploitation ofsugar millers.

Later, Sardar Zafar administeredoath to the newly elected office-bearers of KBP Bhakkar. He alsoaddressed various growers’gatherings in different cities andurged the government to arrestunjustified increase in the pricesof electricity and petroleumproducts and requested todecrease prices of agriculturalinputs, including pesticides andfertilisers to save the agriculturaleconomy and grower fromdestruction and food crisis.Speakers at the occasion warnedthe government of staging sit-in infront of the assemblies if theirdemands are not met.

Gulfood fair 2012 concludes in Dubai

KARACHI

STAFF REPORT

GLOBAL food industry descendedon Dubai for world’s largest hospitalitytrade show (Gulfood) which was held from

19th to 22nd February, 2012 at Dubai, UAE.According to tDAP, in this event thousands ofinternational trade visitors thronged the halls on itsfirst day at the Dubai International Convention andExhibition Centre (DICEC), where 3,800 companiesfrom over 88 countries began brisk trading from themoment the show opened. tDAP has beenparticipating successfully in this event for the lastthree years. this year, 23 leading Pakistanicompanies participated in the exhibition byshowcasing their full range of products underPakistan Pavilion, covering an area of 184 sqm in“Shaikh Saeed Hall” of the exhibition centre.

SBP BSC, bank branchesto remain open

KARACHI

STAFF REPORT

tHE State Bank of Pakistan hasannounced that the SBP Banking ServicesCorporation and all its field offices will

remain open on February 29, 2012 (Wednesday)till 10 p.m. to facilitate tax collection. NIFt willalso remain open on the same date for both firstand second clearing for facilitating taxcollection by FBR. ‘In order to facilitatecollection of taxes, banks are advised to opensuch branches and other offices on February 29,2012 (Wednesday) till 10 p.m. that arenecessary to facilitate aforesaid NIFt clearingson the same date,’ says BPRD Circular LetterNo.3 of February 24, 2012.

Saudis open the oil taps

KBP reacts over price increase,withdrawal of subsidy

With Iraniansanctions resulting

in oil price hike,Saudia Arabia hasvowed to fill the

oil void

WELL, if Pakistan’s coalreserves are really capable ofgenerating 60,000MWelectricity, enough to meet a

hundred years’ demand, then Islamabad’stop energy boys have their work prettymuch taken care of. Just ensure the coal isexploited in manners that meet itsproductive potential and you have a fullcentury of uninterrupted energy, peak-performing industry, value-added exports,improved national revenue andsubsequently GDP. Yet despite the series of political crisesvisiting the capital, it is the energy questionthat has the ruling party paralysed. Comingat the heels of the regional slowdown fromreduced exports to recession-struck westernimporters, power shortage has debilitatedmanufacturing and industry, jacking upunemployment. And with the generalelection looming, this is one problem PPPstalwarts cannot possibly wriggle out of byplaying the political martyr card. Peoplehave genuine problems that the leadershiphas failed to address – its every promisedishonoured, every claim false. And theyare expected to turn fury to vote very soon,and rightly so. Ironically, increasedprovincial powers in the wake of the 18thamendment failed to draw a reciprocalshow of responsibility from provincialgovernments, exposing indiscipline as wellas incompetence. And so far as this crucialissue is not settled, both tax earnings andenergy exploration will remaincompromised. For the time being, itbehooves the government to followforcefully what avenues are open to it. Sinceour coal card is a sure winner, those incharge must expedite whatever workremains to begin generating energy as soonas technically possible. there’s a politicalangle to it too. Any government that canbring a hundred years of electricity is sureto have a pretty long tenure in office.

A hundredyears ofcoal

QUICK EDIT

PRO 26-02-2012_Layout 1 2/26/2012 1:59 AM Page 2

news

Sunday, 26 February, 2012

03

CORPORATE CORNERPNRA issues operating licence toChashma Nuclear Power Plant Unit –2ISLAMABAD: Chairman Pakistan Nuclear Regu-latory Authority (PNRA) granted the Operating Li-cense to Chairman Pakistan Atomic EnergyCommission (PAEC), for the operation of ChashmaNuclear Power Plant Unit– 2 (C-2), which is a 325MW Nuclear Power Plant constructed at Chashmain District Mianwali. the license was granted at asimple but impressive ceremony held at PNRAheadquarters at Islamabad today. the importantprerequisites that preceded the grant of the operat-ing license included provision of a construction li-cense in March 2006, issuance of fuel load permitin December 2010 and provision of grid connectionon 15 March last year. the ceremony was presidedover by Dr Ishfaq Ahmad, Senior Advisor to Plan-ning Commission of Pakistan, who is also formerChairman PAEC and a pioneer of nuclear powerprogram in Pakistan. Mr Jamshed Azim Hashmi,former Chairman PNRA and Mr Pervez Butt, For-mer Chairman PAEC, were also present along withother distinguished guests. PRESS RElEASE

PEMRA warns cable operators of illegal channelsISLAMABAD: PEMRA, has served final warning toall cable tV operators of country asking them to im-mediately stop distributing tV channels which areotherwise illegal or proscribed by the Authority. Nochannel other than PEMRA licensee would be let dis-tributed on cable tV networks and any operator founddefying the orders henceforth would be dealt seri-ously, said PEMRA. the action would pave way forPEMRA licensed channels on distribution networks

which were hitherto being ignored as most of space ispresently occupied by the unauthorized foreign chan-nels thus leaving no space for licensed channels ondistribution networks. PEMRA has issued a list of el-igible channels containing 89 Pakistani origin chan-nels and 26 foreign channels registered with theAuthority. Cable operators have however, the libertyto choose channels amongst the eligible list while put-ting in front the subscriber’s choice but no channelother than the permissible list of PEMRA would be al-lowed. Besides, the cable operators are also bound torelay national broadcaster (PtV) channels which aremandatory under PEMRA law. PRESS RElEASE

PIA holds Board of Director’s meeting

LAHORE: PIA’s 337th Board of Directors’ meetingwas held at PIA head office. Board approved the Cor-porate Budget for the Financial Year 2012 wherein rev-enue of Rs142.831 billion has been targeted for 2012.It also approved the Marketing Plan for 2012-2014.Board was presented with safety overview. Other mat-ters of strategic and corporate interest were also con-sidered during the meeting. the meeting was chairedby Ahmed Mukhtar, Minister for Defence and Chair-man-PIA and attended by Nadeem Khan Yousufzai –Managing Director PIA, Mr Javed Akhtar, Syed Omar

Sharif Bokhari, Mr Husain Lawai, Mr Abdul WajidRana – Federal Finance Secretary, Khawaja JalaluddinRoomi and Mrs Nargis Sethi – Federal Defence Secre-tary. Air Marshal (Retd) Khalid Choudhry, DirectorGeneral CAA and Maj Gen Raja Muhammad ArifNazir, Additional Secretary-I, Ministry of Defence alsoattended the Meeting as Special Invitees. PRESS RElEASE

Minister of production visits KTDMC

KARACHI: Minister of Production, Anwar AliCheema, accompanied by Dr Mehreen Razaque Bhutto,MNA, Parliamentary Secretary for Production and MrGul Mohammed Rind, Secretary Production, visitedKarachi tools, Dies and Moulds Centre (KtDMC).MrMunir K Bana, Chairman KtDMC, and Syed JavaidAshraf, Director KtDMC, welcomed the HonourableMinister and his delegation and briefed them on theperformance of the Centre. Mr Bana informed the min-ister that the centre is self-sustaining and earning cashprofit since 2010, and added that KtDMC is a worldclass centre, which is providing state-of-the-art training,consultancy, design and manufacturing services and fa-cilities in CAD/CAM/CAE, Sheet Metal Dies, InjectionMoulds, Die Casting Moulds, Die and Mould Acces-sories, Reverse Engineering and Heat treatment of Diesand Moulds. PRESS RElEASE

Levi’s global store launchKARACHI: Levi’s is launching its new globalstore at Dolmen Mall City Karachi. Based on thenew global retail format, the store is a reflectionof the brand’s undying commitment to craftsman-ship, attention to detail and it’s passion for creat-ing iconic products. the new store will have itsofficial opening on tuesday the 28th of February2012 with stars and brand ambassadors, Stringsand Zoe Viccaji, present for a public shirt signingbetween 6 pm and 7pm.PRESS RELEASE

DUBAI:Syed Talib Rizvi, Group Head Retail andMiddle Markets North, Bank Alfalah handing overmemento and cheque to Umar Gul for ‘OustandingPerformance’ in the First T20 Match betweenPakistan and England in Dubai. PRESS RELEASE

LAHORE

STAFF REPORT

PUNJAB Chief MinisterMuhammad Shahbaz Sharifhas said there are vastopportunities of investment

in the province and government isproviding all facilities to theinvestors under one-roof. He saidforeign investors should benefitfrom the attractive incentives beingoffered for investment in energy,livestock, agriculture, industries andinformation technology sectors.He was talking to a representativedelegation of Canadian investors.

Chief Minister said Punjab which isthe largest province of the countrywith regard to population has ashare of 62 per cent in the GDP. Hesaid there are 48 thousandindustrial units in the province andmaximum facilities are beingextended to investors in fivedifferent export processing zones.Due to favourable conditions,investment is completely safe in theprovince and Punjab Board ofInvestment and trade is serving asthe platform for facilitating foreignentrepreneurs, he added. He saidthat modern infrastructure andcommunication facilities for trade

and economic activities areavailable in the province and thePunjab government has evolvedliberal economic policies forencouraging investment. Investment opportunities haveincreased in the recent years inindustries, information technology,power generation, livestock andother sectors in the province andinvestors should fully benefit fromit, he underscored. MuhammadShahbaz Sharif further said Punjabhas an excellent workforce and thegovernment is extendingencouragement and cooperation forbusiness and trade activities. He

said the present governmentbelieves in trade rather than aid andwants to provide job opportunitiesto the people at basic level throughpromotion of economic activities.And special incentives have beenoffered to foreign investors inSundar Industrial State. Similarly,all provincial departments areworking in a consolidated mannerfor the encouragement of foreigntrade. UtM’s Sohaib Hassan Murad,Abid Sherani, Chairman PunjabInformation technology Board,Secretary Higher Education andSecretary Health were also presenton the occasion.

Steel manufacturersshow serious concernover MFN statusto India

ISLAMABAD

NNI

LOCAL steel manufacturers showedconcern over giving status of MostFavoured Nation (MFN) to India,

saying it would pose threats to the steelindustry of the country. Our country hasweak infrastructure and industrial units aresuffering due to dismal situation of powerand fuel. Government should shield localsteel industry before giving such a status toits economically strong neighbour. theseremarks were made by local steelmanufactures during a meeting with AtizazA Niazi, Chairman EngineeringDevelopment Board (EDB) at IslamabadChamber of Commerce and Industry (ICCI).Speaking on the occasion, Yassar Sakhi Butt,President ICCI said government shouldadopt a go-slow policy as far as tradeliberalisation with India is concerned. Hesaid steel industry would definitely sufferwhich is one of the fastest growing industriesin Pakistan. the industry is already facingmany challenges due to the deplorableeconomic conditions. President ICCI was ofthe view that government should importiron ore and other scrape material,specialised machinery and equipment,including testing equipmentfrom India rather than allowing import ofintermediate and final steel products, asunder MFN scenario it would significantlyaffect our local steel industry. Yassar SakhiButt said India should also give marketaccess to Pakistan for its quality products.He demanded the Indian government toremove Non-tariff Barriers to give easyaccess to Pakistani products in Indianmarket. the industrialist said there shouldbe no further reduction in proposed sensitivelist as any further reduction would bedetrimental to the local industry. they saidgranting MFN status and opening up of thesteel finished goods market for India wouldcause irreparable damage to domestic steelindustry. Atizaz A Niazi assured EDB wouldhighlight the problems of businesscommunity at all the relevant forums andinformed the meeting that EDB was in theprocess of making recommendationsregarding tariff rationalisation which wouldbe forwarded to Federal Board of Revenuebefore March 10, 2012.

‘Vast opportunities of

investment in Punjab’

PRO 26-02-2012_Layout 1 2/26/2012 1:59 AM Page 3