Wednesday, 26 September, 2012

48-member Malaysiandelegation to attendExpo Pakistan

ISLAMABAD

APP

A 48-member strong delegation ofMalaysian entrepreneurs and business-men is scheduled to attend the 7th edi-tion of Expo Pakistan to be held inKarachi from October 4-7.“The participation of such a large dele-gation from Malaysia which had thelargest foreign representation in ExpoPakistan last year as well, is a clearmanifestation of the trust and confi-dence the Malaysian business commu-nity has in the Pakistani market and Iam sure the visit would pave way formore business matchmakings and eco-nomic collaborations,” said Acting HighCommissioner for Pakistan to MalaysiaMohammad Nadeem Khan while ad-dressing a pre-visit briefing arranged bythe Commercial Section of the Missionfor the Malaysian delegates here inKuala Lumpur. Nadeem told theMalaysian delegates that the Expo Pak-istan 2012, held every year at KarachiExpo Center, was “the premier trade fairin Pakistan, which showcased Pakistan’strade and manufacturing potential”.

Asian shares ease asgrowth worries weigh

TOKYO

AGENCIES

Asian shares eased on Tuesday after senti-ment was weakened by data showing Ger-many’s business confidence dropped inSeptember, and a weak earnings forecastfrom Caterpillar Inc, both of which under-scored worries about a global growth slow-down.Uncertainty about the bailout prospect forGreece and Spain, which are the two majorrisks in what has become the euro zone’sthree-year-long debt crisis, also under-mined investors’ risk appetite.The MSCI index of Asia-Pacific shares out-side Japan inched down 0.1 percent. Aus-tralian shares were down 0.2 percent, andSouth Korean shares fell 0.3 percent.Tokyo’s Nikkei average opened down 0.4percent, hitting a fresh one-week low. “The German data is just the latest sign ofa global slowdown and is likely to drag onthe market today,” said ToshiyukiKanayama, senior market analyst atMonex. The German Ifo institute’smonthly business sentiment index fell fora fifth successive month in September toits lowest level since early 2010, with theoutlook component touching its worstlevel since May 2009. “This lends support to the thesis that theweaker growth outlook is spreading to theEU core,” Barclays Capital said in a note.Caterpillar, the world’s largest maker ofearth-moving equipment, cited weak-ness in the world economy when cuttingits 2015 earnings forecast, raising thepossibility of weak guidance from otherfirms as U.S. earnings reporting seasonapproaches.

KARACHI

STAFF REPORT

DESPITE the economicslowdown and everworsening law and ordersituation in the country,the cumulative advances

of banking sector sample, consisting of33 commercial banks, during 1HCY12rose by an impressive seven percentas against Dec-11, said a report is-sued by InvestCap Research Monday.

According to the report, duringthe review period total advances ofthe country’s banking sector samplewere seen to bolster on the back of exu-berant loan disbursement by Big 5 tier,local mid tier and local lower tier banks,growing by 8 percent, 7 percent and 6percent respectively.

In addition, it said, contribution ofthe foreign private banks tier was lim-ited as their advances grew by mere onepercent during 1HCY12. “In the absenceof any details of advances, we assumethe up tick witnessed was due to addi-tional borrowings done primarily underthe sub head of advances to power sec-tor, due to ever growing quantum of cir-cular debt coupled with loans disbursed

to textile sector because of the export re-financing phenomenon,” said InvestCapanalyst Asad I. Siddiqui. This assump-tion, Asad said, was based on figure ofDec-11 financial statmentsof our sample inw h i c h

the abovem e n t i o n e dsectors hadmajor contribu-tion in advances.Conversely, financ-ings (advances) of theIslamic banking tiercontracted by 7 percentduring the period under re-view (minor Rs10bn in mone-tary terms), which can beattributed to risk averse nature oftheir business.

With increasing advances, rise innon-performing loans (NPLs) had been

witnessed as well, up by 3 percent. How-ever, the rise under the said head was ata slower velocity as compared to rise inadvances, suggesting the weak pace atwhich rolled over NPLs have been mov-ing. As a result, net infection of ourbanking sector sample has also shrunk

by minor 20bps, the net infection ratioat 5 percent during the period

under con-

sideration.Furthermore, impressive re-

duction of 130bps in the asset in-fection level of lower tier banks had

been seen. However, the net infectionratio was still 1.8 times above than that

of the banking sector sample, settling at11.9 percent. It was more or less thesame scenario existed with local mid tierbanks, as their net asset infection wasrecorded at 8 percent during 1HCY12.This highlighted the fact that local midtier and local lower tier banks have lessaccess to advances of healthy nature.Due to the nature of our banking system,where virtually 50 percent of all themajor heads of the banking sector restswith the big 5 tier, mid and smaller sizedbanks were forced to lend out at lesserrates to make themselves attractive andhave more risky lending options as com-pared to the big 5 tier.

Continuous reduction in the dis-count rate coupled with saving depositsbeing fixed at 6 percent, investment ingovernment’s papers was becoming lessattractive with the passage of everymonetary policy. This would leave bankswith 2 alternatives: To shift focus to-wards core banking activities and go forthe riskier option or to remain heavilyinvested in government securities andend up earning a lesser spread.

“In either case, we expect the Non-Performing Loans to rise by the end ofthe year, fueled by the non performanceof freshly released advances,” said Asad.

ADvAncing woefully g Non-performing advances to add to banks’ bad debts despite improved core activities

ASHGABAT

ONLINE

Construction of Turkmenistan-Afghanistan-Pakistan-India (TAPI) gaspipeline will meet the rapidly growingneeds of the Asian energy market, Turk-men President Gurbanguly Berdimuham-madov said on Tuesday.

“Laying this transnational gaspipeline will allow to meet the rapidlygrowing needs of the Asian energy mar-ket through the export of Turkmen natu-ral gas, as well as address a number ofimportant social and humanitarian is-

sues, including those related to the cre-ation of new jobs, formation of the appro-priate infrastructure along the gaspipeline,” the report said.

The meeting heard a report on theoutcome of the TAPI Steering Commit-tee’s meeting held in Ashgabat, whichwas attended by sector ministries andrepresentatives of all participant coun-tries of the project, as well as the AsianDevelopment Bank (ADB).

The meeting discussed the results ofthe business tour to Singapore, New Yorkand London in mid-September, in orderto attract the leading oil and gas compa-

nies and financial institutions to the con-sortium, which will be created for the im-plementation of this major project.

Turkmen leader stressed that “theconstruction of the TAPI will not onlyguarantee further economic growth of theparticipant countries of the project, theirsocial well-being, but also, more impor-tantly, will help maintain peace andstrengthen political stability throughoutthe region”.

The basic document for promotingTAPI was the intergovernmental agree-ment signed by participating countries inAshgabat in late 2010 to start implement-

ing the project.Important agreements on TAPI were

signed for the purchase and sale of Turk-men gas with the State Gas Systems ofPakistan and Indian GAIL Ltd.

The project cost was estimated at$7.6 billion as of 2008. Bangladesh ex-pressed its interest in the project.

Besides the Dovletabat field, thelargest field being developed in Turk-menistan which was Galkynysh may be aresource base. Russia expressed great in-terest in this project. The U.S. adminis-tration also supported theimplementation of this project.

ASHGABAT IS ALL GEARED UP!‘Turkmenistan ready to meet Asia’s growing demand for natural gas’

BERLIN

AGENCIES

Chancellor Angela Merkel said on Tues-day that Europe could only hope to comeout of its crisis stronger and compete ina globalised world if its memberspressed ahead with painful reforms andmoved to more responsible budget poli-cies.

Speaking at a meeting of the Feder-ation of German Industries

(BDI), Merkel acknowledged thatGermany was “not an island” that coulddisconnect from economic develop-ments in Europe and the world econ-omy.

But she placed the onus on Berlin’sstruggling euro zone partners to fix theirown economies, rejecting the idea thatGermany should relax its own produc-tivity drive in order to help its partners.

“We need to take a deep breath toovercome this crisis,”

Merkel said. “We must make the ef-forts that will allow Europe to come outof this crisis stronger than it went in.”

“There is a lack of confidence on fi-nancial markets that some euro zonestates can pay back their debts in thelong term,” she continued. “The world

wonders how competitive euro zonecountries are.”

The German leader said tough re-forms in southern Europe had led tosome convergence of unit labour costsacross the euro zone, but made clearthat there was still work to do.

She also expressed regret thatthe European Court of Justicehad not been given strongerpowers to intervene in na-tional budget policies in theeuro zone.

“We can’t have supportwithout controls. The two gohand in hand,”Merkel said.

The Germaneconomy hasheld up wellduring the cri-sis, with un-employmentholding nearpost-reunifi-cation lows.But thereare signst h a te c o -n o m i c

weakness across much of Europe and aslowdown in Chinese growth are begin-ning to bite.

Business sentiment is at its weakestlevel since early 2010, data released bythe Ifo economic think tank showed on

Monday. And some economistsbelieve Germany could fall

into a technical recessionin the second half of thisyear.“NOT AN ISLAND”:

“We are feeling that Ger-many is not an island. We

are an export nation. Fortypercent of our exports

go to the eurozone, 60 per-cent to theE u r o p e a nUnion. Wecan’t discon-nect fromE u r o p e a nand globale c o n o m i cd e v e l o p -m e n t s , ”M e r k e l

said.

Merkel held up the fiscal compactfor budget discipline and plans to intro-duce pan-European banking supervisionas signs of Europe’s progress.

She dismissed the notion that Berlinwas slamming on the brakes in the cre-ation of a European banking watchdog.In recent weeks, the German govern-ment has made clear that it sees a Janu-ary deadline for putting this in place asunrealistic.

“We want stronger European bank-ing supervision,” she said.

Merkel was due to meet EuropeanCentral Bank President Mario Draghi onTuesday afternoon. Later he will give aspeech to the same industry conference.

Draghi’s plan, unveiled at the startof the month, to buy the bonds of strug-gling euro countries, combined with agreen light from Germany’s Constitu-tional Court for Europe’s new rescuefund have been welcomed by markets.

But worries have grown in the pastweek over Spain’s reluctance to seek abailout that would allow it to profit fromthe ECB’s bond plan. Also weighing onthe euro on Tuesday was a report thatlawyers at the German Bundesbankwere looking into the legality of Draghi’sbond scheme.

Deep breaths everyoneEurope must take ‘deep breath’ and enact reforms: Merkel

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02

Wednesday, 26 September, 2012

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERIndus Dyeing 400.00 419.00 419.00 419.00 19.00 100Shezan Inter. 250.00 262.50 254.00 260.00 10.00 3,100Indus Motor CoXD 251.18 261.10 248.00 260.42 9.24 65,700Service Industries 175.00 183.75 177.90 183.48 8.48 12,100Pak Services 163.50 171.67 163.50 171.67 8.17 900

Major LosersUniLever Pak 9700.00 9700.00 9400.00 9400.00 -300.00 180Siemens Pakistan 907.25 862.00 862.00 862.00 -45.25 50Bata (Pak) Limited 984.00 1021.00 950.01 963.53 -20.47 300Island Textile 308.70 324.00 295.10 295.10 -13.60 300Wyeth Pak Limited 970.00 1000.00 950.00 960.71 -9.29 550

Volume Leaders

P.T.C.L.A 18.94 19.62 18.88 19.36 0.42 11,376,000Maple Leaf Cement 8.18 9.14 7.91 8.78 0.60 7,247,000Pak Elektron Ltd. 8.01 8.34 7.45 8.11 0.10 7,137,000Fauji Cement 5.94 6.06 5.92 5.99 0.05 5,310,000D.G.K.Cement 47.54 48.11 47.30 47.86 0.32 5,174,500

Interbank RatesUS Dollar 94.5464UK Pound 153.4488Japanese Yen 1.2168Euro 121.9459

Dollar EastBUY SELL

US Dollar 94.50 95.00Euro 121.35 122.45Great Britain Pound 152.21 153.55Japanese Yen 1.2020 1.2126Canadian Dollar 95.54 96.89Hong Kong Dollar 11.98 12.15UAE Dirham 25.58 25.78Saudi Riyal 25.08 25.23Australian Dollar 97.54 99.85

Business

The Consul General of the Federal Republic of Germany

Dr Tilo Klinner, and Mrs Luba Klinner, hosted a Jazz

Concert and reception at their residence. Picture shows

Goethe-Institute, Director, Ali Akhtar, Press and Political

officer, Dr.Mohmmad Altamash, with artists Peter Weniger

and Asif Sinan, with other guests.

Intel Pakistan in partnership

with KCCI holds ‘Intel SMB

Technology Day’

ISLAmAbAD: Intel Pakistan in collabora-tion with the Karachi Chamber of Commerceand Industries (KCCI) held a full day event“Intel SMB Technology Day” to showcase lat-est technology solutions for increasing busi-ness productivity offered by Intel. The sessionwas inaugurated by Intel Pakistan, CountryManager, Naveed Siraj, and KCCI, President,Abrar Ahmad.

Rs 360 million released for

Darawat dam project

LAHORE: The Federal Government released Rs360 million for the under-construction DarawatDam Project, located in Thatta and Jamshoro dis-tricts. Following release of the much-neededfunds, the construction work at site will gain anew momentum leading towards timely comple-tion of the project. The funds have been releasedon the special instructions issued by Prime Minis-ter Raja Pervez Ashraf, and because of the effortsmade by Federal Water and Power MinisterChaudhry Ahmad Mukhtar for the purpose.

NADRA, Chairman, Tariq Malik giving presentation to the

delegation of the government of Gilgit Baltistan led by

Chief Minister Syed Mehdi Shah at NADRA headquarters.

Etihad Airways offers

special fares for Chicago

LAHORE: Etihad Airways, the National airline of

the United Arab Emirates, offered an exclusivedeal for Chicago. The customers can fly from Is-lamabad to Chicago at an amazingly low fare of Rs127,110 which was available on tickets purchasedbetween 24th September and 5th October, 2012.While these tickets can be availed any time before31st of October – 2012.

COMSATS visits Lahore Stock

Exchange as part of campus

outreach program

LAHORE: Students of COMSATS Institute of In-formation Technology visited the Lahore StockExchange as part of the Campus Outreach Pro-gram under Financial Literacy Initiative. Here,they were given an insight about practical aspectsof various financial institutions and investmentavenues by industry professionals.

PTCL brings 3G EVO

Nitro Boost Offer

ISLAmAbAD: In a continued commitment tobring modern telecommunication solutions at af-fordable rates for its valued customers, PakistanTelecommunication Company Limited (PTCL) -country’s leading telecommunication network,had reduced the monthly recharge by 30%, offer-ing massive savings on its 3G EVO Nitro dongles.Now PTCL consumers can avail 9.3 Mbps hyperspeed experience with 3G EVO Nitro at RS2100/month for one year, while enjoying unlim-ited downloads, video streaming, and seamless

browsing experience on the largest wireless broad-band network in the country. The offer was validon both 3G EVO Nitro Bundle Offer, where con-sumers can get a free Nitro dongle, plus 3 monthsunlimited usage, for just RS 6000 or on a pur-chase of a new Nitro Dongle. The monthly billingper month will be Rs 2,100 for one year.

Dr Hasan Sohaib Murad, Dr A R Kausar, A G Ghaffari,

Dr Faheem ul Islam, Dr Abdul Hameed, Dr Abdul Aziz

Bhatti, Dr Munawar Anees, Dr Nabeel Amin, and

Mohyuddin Tahir addressed the large gathering at the

special welcome orientation ceremony organized by

the University of Management and Technology (UMT),

Lahore, for Fall 2012 newcomers

PJBF hails SEZ Bill

KARACHI: Pakistan Japan Business Forum ap-preciated and applauded the signing of the much-awaited Special Economic Zones Bill 2012 byPresident Asif Ali Zardari as this landmark incen-tive was initiated by PJBF four years ago. This wasstated by PJBF, Chairman, Sohail P Ahmed in alaudatory statement.

CORPORATE CORNER

NEW YORK

AGENCIES

US stocks rose at the open aftercomments from the presidentof the San Francisco Fed sug-gested the central bank was notdone taking action to stimulate

the economy.A pessimistic outlook from Caterpillar

(CAT.N) capped gains and some investors cau-tioned the advance may be due to window-dressing for the end of the quarter. .N

U.S. stocks were supported by a privatesector report showing U.S. consumer confi-dence jumped to its highest level in sevenmonths in September as Americans weremore optimistic about the job market and in-come prospects. The MSCI world equity index.MIWD00000PUS rose 0.37 percent to337.38. European shares .FTEU3 gained 0.26percent.

“A lot of people are buying equities todaybecause they’ve been underexposed to the mar-ket. It isn’t necessarily a call on fundamentals,”said Nicholas Colas, chief market strategist at

the ConvergEx Group in New York.“Money managers who haven’t believed in

the rally don’t want to compound that errorby showing a lack of exposure at the end ofthe quarter.”

The Dow Jones industrial average .DJIwas up 49.96 points, or 0.37 percent, at13,608.88. The Standard & Poor’s 500 Index.SPX was up 4.83 points, or 0.33 percent, at1,461.72. The Nasdaq Composite Index .IXICwas up 9.82 points, or 0.31 percent, at3,170.60.

Caterpillar shares (CAT.N) fell 2.3 per-cent at the New York open. Just minutes be-fore markets closed on Monday, CaterpillarInc cut its 2015 profit outlook, warning thatweaker commodity prices would result in abigger-than-expected decline in demand.<ID: nL1E8KOGZR>.

“Caterpillar is another global-reaching firmthat’s speaking negatively to the pace of theeconomy, and with slow-downs in Europe andAsia, this is something we should get used to,”said Art Hogan, managing director of LazardCapital Markets in New York.

U.S. data showed single-family home

prices rose for a sixth month in a row in July,though the improvement was not as strong asexpected and had minimal impact on trading.

The benchmark 10-year Treasury noteyield was last at 1.7181 percent, compared with1.706 percent shortly before the release of thehome price report from S&P/Case-Shiller.

The euro rose 0.2 percent at $1.2951,still some two cents from the 4-1/2-monthpeak posted last week when the U.S. FederalReserve announced further quantitative eas-ing. Gains were sparked by a media reportthat Bundesbank lawyers were checking thelegality of the European Central Bank’sbond-buying plan.

Oil drew some support from the rise in ten-sions in the Middle East.

Washington on Monday cleared the pathfor tighter sanctions against Iran to curb itsnuclear ambitions, while Tehran renewed itsrhetoric against Israel, intensifying worriesabout a conflict between the two, which couldhave an impact on crude supplies from theregion.

These worries sent Brent crude futures up1 percent to $110.91 per barrel.

growth concerns, Spaincap euro and share gainsg Stocks rose around the world on Tuesday, with US markets in particular buoyed by hopes

of more economic stimulus from the Federal Reserve, though lingering concerns over Spain’s

funding problems and renewed worries about global growth limited gains.

KARACHI: The profits of cementcompanies have increased seventimes in FY12 to Rs 16 billion or$168 million due to robust increasein cement prices that witnessed agrowth of 26 percent during theyear. Interestingly, out of 10 compa-nies which have announced their fullyear results, only one has postedlosses in FY12 whereas last time al-most 50 percent of the cement com-panies were in losses. Thus, bettercement sector outlook and turn-around in FY12 led cement sectorposting 119 percent return during2012YTD as well.

“Our sample includes 10 cementcompanies, representing 76 percentof market capitalization, while the

rest have not yet announced theirfull year results. We have excludedJavedan Corporation because beingnon operational during FY12,” saidTopline, Analyst, Farhan Mahmood.

The analyst said one of the turn-around stories for cement manufac-turers in FY12 was sharp rise in localcement demand which led to im-provement in cement prices at localarena. This led to handsome increasein total revenues by 33 percent toRs123bn ($1.3bn). Where local volu-metric sales remained higher by 9percent to 24mn tons in FY12, localcement prices improved by an aver-age 26 percent during FY12. How-ever, total sales during FY12 (local +exports) stood at 32.6mn tons, up 4

percent. Thus, despite energy cost(higher prices of oil prices & gas), ce-ment manufacturers’ remained com-fortable with gross margin increasingby 7pps to 30 percent during FY12.However, 17 percent increase in fi-nancial charges to Rs8.7bn amid cur-rency devaluation and higherborrowing (particularly in 1H)slightly diluted bottomline. “Thanksto sharp rise in cement prices, prof-its of Kohat cement grew by massive26 times followed by DG Khan Ce-ment (up 24 times) whereas most ofthe companies which had opera-tional issues due to high cost of pro-duction and high leverage, theirlosses turned into profits in FY12,”said Farhan. STAFF REPORT

Cement rejoiCes at inflated priCesInflated prices increase profits of cement sector to Rs16bn in FY12

Bulls lift LSE up 34.89 pointsLAHORE

APP

Lahore Stock Exchange on Monday witnessed bullish trend bygaining 34.89 points as the LSE-25Index opened with 3987.58 and closed at 4022.47 points.The market’s overall situation also corresponded to an up-ward trend as it remained at 2.812 million shares to closeagainst previous turnover of 2.472 million shares, showing anupward move of 340,400 shares. While, out of the total 102active scrips, 22 moved up, 64 remained equal and 16 shedvalues.Muslim Commercial Bank Limited, Packages Limited andPakistan Reinsurance Company were Major Gainer of the dayby recording increase in their per share value by Rs 1.90, Rs1.14 and Re 1.00 respectively.Pakistan Oil Fields Limited, Pakistan Petroleum Limited andAttock Refinery Limited lost their per share value by Rs 3.00,Rs 1.92 and Re 0.94 respectively.The Volume Leader of the day included Fauji Cement Compa-nyLimited with 500,000, Meple Leaf Cement Factory with486,000 shares and NIB Bank Limited 284,500 shares.

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