Thursday, 30 August, 2012

PSO circular debtincreases to Rs 431b

ISLAMABAD

ONLINE

The Ministry of petroleum and Natural resources has failed tocontrol the circular debt of the Pakistan State Oil (PSO) that hasbeen increased to 431 billion raising threat for fuel supply in thecountry. According to official data the oil giant total payables tolocal and international fuel suppliers have touched Rs 186 billionmark while receivables from power sector and other sectors standat Rs 244 billion. Sources in the Pakistan State oil told online thatagency is supplying oil to the different sectors according to theirdemand however monthly payback from departments is meagerdue to which state oil agency outstanding dues are increasingconstantly. Sources told circular debt of PSO is increasing at therate of Rs15-20 billion per month due to inefficiency, non-recoveries and subsidies. According to official data power sectoris main defaulter of PSO with Rs 212 billion outstanding. hubPower Company Limited (hUBCO) is the leading defaulter ofPSO with Rs 109 billion outstanding followed by Wand PowerDevelopment Authority (WAPDA) with Rs 63 billion and KotAddu Power company (KAPCO) with Rs 38 billion. The companyhas to receive two billion from Pakistan International Airline(PIA), Rs 524 million from Oil and Gas Development CompanyLimited (OGDCL), Rs 10 billion from Karachi Electric Company(KESC), Rs 1.447 billion from Pakistan Railways.

LPG price skyrockets by Rs 18 –20 per kg

ISLAMABAD

ONLINE

LPG prices rose up by 18 to 20 rupees per/kg across the countrydue to increase in price of LPG in the international marketWednesday. Now LPG price has risen from $775 to $946 per/kgin the international market, after increase of $19000 per ton. TheLPG marketing companies have increased its prices due to pricehike in the international market, according to that price of LPGfor Balochistan and Sindh went up to Rs 130 per/kg, Punjab Rs139 per/kg and Rs145 per/kg for Azad Kashmir and NorthernAreas. While for house and commercial consumption the pricehas been raised to Rs 244 and 883 respectively. Whereaschairman of the LPG Distribution Association Irfan Khosa hastermed it as ‘public foe’ and demanded of the government toreview the recent LPG price hike.

ISLAMABAD

ONLINE

The country’s cotton production can be in-creased by 62.5 per cent by developing seed in-dustry, controlling weeds and pests andadopting improved crop management tech-niques, sources say.

The Punjab Cotton Control Ordinance 1966amended up to 2002, further needs to beamended to provide mandatory marking of cot-ton grade, staple length on each cotton bale forthe improvement of the standard and quality ofcotton. The rules may also beamended to restore the administra-tive control of Agriculture Departmentover the District Officers Agricultureand Deputy District Officers Agricul-ture, Agriculture Officer Extensionand Cotton Inspectors instead of pres-ent setup of administrative control of Dis-trict Government/District Nazims.

The government keeping in view the interna-tional quality standards may introduce hVI test-

ing and marking system on the cotton bales so asto be able to compete in international market. Forthis purpose a time frame may be allowed to theginners to upgrade their ginning factories andadopt hVI classification. The Government mayrevise the Agricultural pesticides Rules 1973 togive powers to the Inspector to seal the store ofpesticides with the pesticide companies or deal-ers if the Inspector/s has/have sufficient groundsto believe that the pesticide in question is of

sub-standard or out-d a t e d .

Such companies should be heavily fined andblack listed and the chemical may be destroyed.

In this regard cotton commissioner Dr

Khalid told online that seed legislation is pend-ing from last ten years therefore industry is suf-fering a lot. he said that country’s seedsrequirement is about forty thousand metric tonwhile only ten percent seed available on thetime of cultivation. he said that state of art andlatest technology should be adopted to com-plete the requirements of the country. he saidthat Seed Act 1976 and Seed (Amended) Act2005 be made more effective and the rules

may be amended and the extension staff ofAgriculture Department may also be em-

powered under Seed Act to regulateeffectively the sale of approved qual-

ity seed. he said that seventy percentpesticides are used on cotton thereforeamendments are required in Pesticides

act to enhance the capacity of industryand to improve the situation.

Dr Khalid also pointed out the short-age of manpower and said that our seed in-

dustry has not sufficient manpower to handledemand of seeds therefore illegal and substan-dard seeds are sold in the market.

‘Cotton production can be increased by 62.5%’

KARACHI

ISMAIL DILAWAR

ThE policymakers at Pak-istani stock exchanges havefinally shifted their focusfrom the recession-hit west-ern investors to that of the

“high-saving” emerging economies likeIndia, China and Middle Eastern countries.

Also, a KSE delegation is due onSeptember 3 to meet the MSCI Board forconvincing the latter on placing Pakistanback into the category of emerging mar-kets from the frontier market.

Further, a Memorandum of Under-standing (MoU) is due next week be-tween the front regulators of Karachiand Lahore stock exchanges for thelaunch of KSE-30 index at the Lahorestocks. This was stated by Karachi StockExchange (KSE), MD, Nadeem Naqvi-while declaring the appointment of AKDSecurities as a first market-maker forthe Stock Index Future Contract (SIFC).

he said KSE, the front regulator ofcountry’s largest share market that hasrecently been demutualized, was in talkswith the stock exchanges of India, AbuDhabi and Dubai for cross-border listingof each other’s indexes.

“We have always been seeking in-vestment from the west. If we focus onhigh-saving countries like India andChina we would see great liquidity flow-ing into Pakistani markets,” said Naqvi.

Sensex would be traded at the KSEcounter, he said, adding the Abu Dhabiand Dubai stock exchanges were also incontact for the same contract. Naqvitermed the “cross border listing” as hisdream. Appreciative of the Reserve Bankof India’s recent announcement to allowPakistani portfolio and direct invest-ment on the Indian markets, the KSEMD called upon the Pakistani centralbank to replicate the same. Also, he said,his side was working with the New YorkStock Exchange for the trading of KSE-30 index at the latter.

Further, he said MoU was due nextweek between the front regulators ofKarachi and Lahore stock exchanges forthe launch of KSE-30 index at the latter.

Naqvi said the trading of KSE-30benchmark would start at LSE withinnext 6-8 weeks. “A MoU is ready for nextweek,” he added. About the demutual-ization of the KSE, the managing direc-tor said 40 percent of the total shareshave already been transferred in themembers’ account. Of the remaining 60

percent shares, he said, 40 percentwould be offered to offshore investorsand 20 percent to general publicthrough Initial Public Offerings.

In his briefing, Sani-e-MehmoodKhan, general manager product devel-opment at KSE, said the market-makerswould make sure that besides entrypoint the investors could also have theexit way from the market.

he said at least half a dozen applica-tions were pending with the KSE formarket makers job. Naming the FaysalBank and Topline Securities, the productmanager preferred not to name other ap-plicants. Discussion with Faysal Bank,Sani said, was on the advanced stages.

“More market-makers would be ap-

pointed in next few days,” said Sani.To a query, Sani termed the liquidity

as a root cause of all the diseases. hesaid the market was not getting enoughliquidity because of the trust deficit cre-ated in the wake of 2005 and 2008 mar-ket crashes. “The investors’ confidencehas to be restored through awarenesscampaign that is underway countrywideby the SECP with the financing of AsianDevelopment Bank,” he added.

AKD Securities, chief executive offi-cer, Muhammad Farid Alam told the re-porters that all the brokers andmembers of the Exchange would dotrading under the SIFC same like thenormal share trading.

“We as a market-maker would trade100 contracts at start and 500 at the endin case no activity is there,” he said.

Quoting the proverb that “a hundredmiles journey begins with a single step”,Farid was upbeat that the new productwould add more volumes and value tothe stock market that if not interruptedwould soon regain its past glory. “Vol-umes have improved to $ 91 million andwe can chase the $ 100 million mark,”said the AKD executive who deemed agood operator necessary for the demu-tualized market.

Pakistan looks northwards,eastwards then skywardsg Pakistan looking towards ‘high-saving’ India, China for portfolio investmentg KSE team due to meet MSCI Board on Sep 3 for category revisitg KSE-30 index to trade at Lahore Stock Exchangeg AKD Securities appointed first market-maker for SIFC

ISLAMABAD

APP

The National Assembly Standing Committee onCommerce has recommended to the Ministry ofCommerce (MoC) to include measures in thenew trade policy 2012-15 to encourage small andmedium enterprises (SMEs) and entrepreneur-ship among women, youth and business peoplein less developed areas (LDA) of the country.

The meeting of the committee, held in-cam-era under the chairmanship of MNA EngineerKhurram Dastgir Khan also directed the min-istry that any support or subsidy to any sectorshould be designed carefully in order to ensurethat the subsidy reaches its specific target andnot abused. Moreover, the ministry was di-rected to develop measurement criteria in orderto objectively assess the output of the new tradepolicy on a regular basis.

Discussing in detail the structure of tradepolicy, the committee expressed the concernthat the commerce ministry was unable tomeasure in any objective manner of the outputof 2009-12 trade policy.

Pakistan’s exports have risen during 2009-12, yet the trade deficit has also risen simulta-neously, therefore nullifying the overall benefitsto Pakistan balance of trade, observed the com-mittee. The committee emphasized that thetrade policy should also concern itself with Pak-istan’s domestic market, specifically encouragelarge sectors of manufacturing and trade toenter the formal economy in order to eventuallyenable these manufacturers and traders to tradeinternationally.

Here’s how private sectorshould operateADB to brief media on Private Sector

Operations in Pakistan on Friday

ISLAMABAD

APP

The Asian Development Bank (ADB) isorganizing a briefing for media regardingbanks Private Sector Operations inPakistan by ADB’s Director General ofPrivate Sector Operations Department(PSOD), Phillip Erquiaga, here onAugust 31. According to bank sources theADB’s private sector operations inPakistan began in 1983 and as of year-end 2011, cumulative approvals in 30projects amounted to $1.07 billion. “Asof 30 June 2012, total outstandingbalances and undisbursed commitmentsto private sector projects in Pakistanamounted to $623 million representing10.1% of the total portfolio administeredby ADB’s PSOD Asia-wide”, the sourcesadded. It further said that the ADB’sinvestments in Pakistan’s private sectorencompass several industries. ADB has,in the past, successfully lent to leasingcompanies, investment banks, mutualfunds, a fertilizer plant, an oil terminaldistribution company, a powerdistribution company and three (thermaland hydro) power plants. In 2011, a $97million loan was approved for theconstruction and operation of a 147-megawatt run-of-river hydropower planton a build-own-operate-transfer basis.The partial credit guarantees totaling$66.6 million approved in 2011 for twowind projects in Pakistan are ADB’s firstever shariah-compliant debt financings.

Euro mixed inAsian trade

TOKYO

AFP

The euro was mixed in Asia onWednesday after two eurozone bondauctions buoyed the embattled unit amidrising speculation that the EuropeanCentral Bank (ECB) would restart abond-buying programme. The Europeancommon currency bought $1.2556 and98.69 yen in Tokyo morning trade,against $1.2565 and 98.68 yen in NewYork on Tuesday. The dollar was at 78.60yen from 78.49 yen in US trade. WeakGerman business confidence data hadweighed on the euro earlier this week,but the currency won some support aftertwo debt auctions on Tuesday saw hard-hit Spain and Italy pay sharply lowerborrowing rates.

NA body turns directorDirects MoC to encourage SMEs,

entrepreneurs in new trade policy

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02

Thursday, 30 August, 2012

Major Gainers

COmPANy OPEN HIGH LOW CLOSE CHANGE TuRNOVERRafhan MaizeXD 3785.00 3897.00 3650.00 3885.00 100.00 880Nestle Pakistan Ltd. 4002.00 4050.00 4050.00 4050.00 48.00 40Bata (Pak) Limited 959.75 1007.73 1007.73 1007.73 47.98 2,000Exide (PAK) 280.62 294.65 283.25 294.65 14.03 60,100Indus Motor Company 271.14 284.69 270.00 279.61 8.47 87,600

Major LosersColgate Palmolive 1353.23 1296.00 1295.60 1296.00 -57.23 200Mithchells Fruit 373.00 360.00 360.00 360.00 -13.00 200Sanofi-Aventis Pak 237.67 240.00 225.79 225.79 -11.88 2,700Service Industries 188.67 180.00 179.24 179.24 -9.43 6,000Tri-Pack Films 195.80 196.00 190.00 190.13 -5.67 5,700

Volume Leaders

P.T.C.L.A 17.29 16.95 16.29 16.38 -0.91 33,594,500Pace (Pak) Ltd. 2.77 3.27 2.75 3.10 0.33 15,500,000Telecard Limited 2.67 2.55 2.11 2.44 -0.23 15,097,500WorldCall Telecom 3.16 3.00 2.64 2.71 -0.45 11,959,000TRG Pakistan Ltd. 4.11 4.33 3.91 4.04 -0.07 10,553,500

Interbank RatesUS Dollar 94.7937UK Pound 149.9731Japanese Yen 1.2069Euro 119.0230

Dollar EastBuy SELL

US Dollar 94.50 95.00Euro 117.57 118.92Great Britain Pound 148.54 150.20Japanese Yen 1.1885 1.2017Canadian Dollar 94.77 96.33Hong Kong Dollar 11.99 12.19UAE Dirham 25.61 25.87Saudi Riyal 25.06 25.32Australian Dollar 97.00 99.54

Business

KARACHI

STAFF REPORT

PAKISTAN Stocks closed lower onprofit-taking post major earning an-nouncements at KSE. Consolidationin blue-chip stocks, uncertainty inglobal stocks and commodities, se-

curity concerns in the city and concerns for risingcircular debt in Pakistan Energy sector played acatalyst role in bearish sentiments at KSE. Thiswas opined by Ahsan Mehanti, Director at Arifhabib Investments Limited.

On Wednesday, negative trend was seen atKarachi Stock Exchange. At local equity marketbenchmark KSE-100 share index misplaced83.17 points or 0.55 percent to finish the day’strading at 15,151.31 points as compared to15,234.48 points of the second working day ofthe week on Tuesday. The trading volumes atthe ready-counter were recorded lower at203.644 million shares against 312.490 millionshares of the previous day. The trading value de-creased to Rs 4.207 trillion compared to Rs7.224 trillion of the previous session. The intra-day high and low, respectively, stood at 15,255.82 and 15, 127.91 points.

he stated thatthe Volumes re-mained lower amidsupport from institu-tions leading the indexto close above its dayslow. KSE-All shareindex shed 60.67points or 0.56 per-cent to stop the dayat 10,679.91

points, KSE-30 share index lost 99.60 points or0.76 percent to end the day at 12,990.55 pointswhile KMI-30 share index shed 77.24 points or24 percent to close the day at 26,786.84 level.Trading took place in 317 companies whereloser out numbered gainers 113 to 177 while val-ues of 27 stocks remain intact. P.T.C.L.A wasthe top traded company of the day with 33.594million shares lost Rs 0.91 to Rs 16.38. PacePakistan Limited was on the second positionwith 15.500 million shares shed Rs 0.33 to Rs3.10. it was followed by Telecard Limited,WorldCall Telecom, TRG Pakistan Limited, NIBBANK Limited, Jahangir Siddiqui Companyand Fauji Cement with turn over of 15.097 mil-lion, 11.959 million, 10.553 million, 9.589 mil-lion, 7.923 million, and 7.226 million shares

respectively. Rafhan Maize XD wasthe biggest price gainer of the day in-

creased by Rs 100.00 to stop Rs3885.00 followed by NestlePakistan Limited up Rs48.00 to end at Rs 4050.00.

Major loser included ColgatePalmolive down by Rs 57.23 tolock at Rs 1296.00 and

Mithchells Fruit off Rs 13.00to close at Rs 360.00 re-

spectively.

ICI Pakistan Limitedannounces after tax profit ofRs 462 million for H1 2012KARACHI: The Board of Directors of ICI Pak-istan Limited announced the financial results forhalf year ended June 30, 2012.The companyposted an after tax profit of PKR 462 millionwhich was 52% less than same period last year.Operating result for hI 2012 at PKR 748 millionwas lower by 32 % compared to hI 2011 mainlydue to reduction in unit gross margins in the PSFbusiness because of lower demand and margin

shrinkage across the entire Polyester chain. Alongwith that, rising cost of alternative fuels resultedin an additional cost of PKR 348 million com-pared to same period last year. In addition, thecompany also incurred a one off expense of PKR124 million relating to demerger of the Paintsbusiness. Profit after tax for Q2 2012 at PKR 304million was 13% lower than same quarter lastyear. Excluding the effect of the one off demergercost of approximately PKR 58 m for the quarter,this result is 4% higher than same period last year.Earnings per share for half year ended June 30,2012 were PKR 5 per share. An interim dividendof PKR 3.50 per share has been declared by theBoard of Directors.

PTCL 3G EVO Wi-Fi Cloud, 3G NitroCloud devices come free with 4months unlimited downloadsISLAMABAD: Country’s largest integratedtelecommunications service provider, PakistanTelecommunications Company Limited (PTCL)now brings 3G EVO Wi-Fi Cloud and 3G EVO

Nitro Cloud devices free of cost with 4 monthsunlimited downloads.

E4u opens a new outletKARACHI: After the grand success of our threee4u malls in Karachi and two in Lahore, e4u hadgrand opening ceremony of its 6th e4u mall onWednesday at Royal hotel Building, I.I.Chundrigar Road, Karachi.

SAP announced resultsKARACHI: SAP Asia Pacific Japan (APJ)announced their best-ever second quarter resultswith 25% growth in Non-IFRS Software Revenue.

CORPORATE CORNER

KSE bears the brunt offoreign selling apprehension

Blue-chip consolidation,

security concerns also

took their toll as bears

take index down 83 points

People’s Republic of China Consul General Mr Zhang Jian Xin andPeople’s Republic of China , Deputy Consul General Mr PanQingjiang recently joined Avari Towers General Manager GordonGorman to officially reopen the hotels famous Dynasty ChineseRestaurant after a soft refurbishment. After the traditional redribbon cutting, the invited guests were treated to a selection ofdishes from Master Chef Yu’s new Autumn flavors menu, whichincluded spicy Szechuan lobster, Peking duck and other Chinesespecialties for which the restaurant is well known.

TEVTA Chairperson Arif Saeed addressing the participants,General Manager (Operations) Retired Col. Hamid Ghani Anjum,Zonal Manager (North) Muhammad Usman, TEVTA Officers andPrincipals were also present.

PESHAWAR: Additional Chief Secretary/Chairman Board of Directors(BOD) Bank of Khyber (BOK) Mr. Attaullah Khan presided over 115thBOK BOD at Bank’s Head Office Peshawar on Wednesday.

ISLAMABAD

APP

Vietnamese Deputy Minister of Industry andTrade Le Duong Quang called for strengtheningPaki-Vietnam friendship, especially in trade andinvestment terms.

Speaking at the Islamabad Chamber of Com-merce and Industry (ICCI) during his visit onWednesday, the Vietnamese minister hoped thatthe second session of Pak-Vietnam BusinessCouncil would help strengthen business coopera-tion between the two countries as well as gatherVietnamese counterparts that are interested in ex-panding business in Pakistan. Ambassador ofVietnam to Pakistan Nguyen Viet hung and Com-mercial Counsellor Embassy of Vietnam Nguyenhong Tian were also present on the occasion.

The Deputy Minister termed the current bilat-eral trade between Vietnam and Pakistan very lowand said that efforts should be made to enhance an-nual volume of trade between the two countries by2013. he said that Vietnam would also provide

support to Pakistan in getting market access to theSouth East Asian states. he said that the Trade Pro-motion Agency of Vietnam and the Trade Develop-ment Authority of Pakistan should collaborate andsign mutual agreements for the promotion of tradeand economic relations between the two countries.

ICCI President Yassar Sakhi Butt, in his wel-come address, said that it was encouraging thatPakistan and Vietnam were now moving for-ward to further strengthen their bilateral eco-nomic and trade relations as the two countrieshad great potential to enhance mutual coopera-tion in various sectors of their economies. TheICCI President said that bilateral trade betweenPakistan and Vietnam had improved fromUS$60 million in 2005-06 to US$262.5 millionin 2010-11, however, it was far below their truepotential. he said that both the countries hadgood potential to complement each other in dif-ferent areas, including science & technology, IT& telecommunication, industry, banking & fi-nance, health & pharmaceuticals, agriculture,livestock, fisheries, education and culture.

From Korea,

with powerKorean firms to constructtwo mega hydropowerprojects on PPP mode

LAHORE

PRESS RELEASE

The Korean firms have been selected toconstruct two mega hydropower projects –the 665MW-Lower Palas Valley and the496MW-Lower Spat Gah - on publicprivate partnership (PPP) mode. This wastold in a meeting presided over by Water& Power Federal Minister ChaudhrayAhmed Mukhtar. The meeting was heldtoday to review progress on varioushydropower projects. Addressing themeeting, the Federal Minister said that theGovernment was committed to optimalutilization of the indigenous resources forelectricity generation in the country. hesaid that a number of hydropower projectsare being implemented on highest priorityfor the purpose. On completion, theseprojects will not only help overcomeelectricity crisis, but also stabilizeelectricity tariff for the consumers, hefurther said. Briefing the meeting,WAPDA Chairman said that the Koreanfirm K- Water will construct the LowerPalas Valley hydropower Project, while aconsortium of two other Koreancompanies namely Komipo and Posco willimplement the Lower Spat Gahhydropower Project. he said that theKorean firms will together bring in withthem an investment amounting to US$3billion for construction of the two projects.This investment shows the confidence, thefinancial institutions have in WAPDA forimplementation of the projects in water aswell as hydropower sectors, he added.

Crude down in Asiaon G7 calls foroutput hike

SINGAPORE

AFP

Crude sank in Asia Wednesday as a callby the Group of Seven nations for oilproducers to increase output overrodeUS supply disruptions due to hurricaneIsaac, analysts said. New York’s maincontract, light sweet crude for Octoberdelivery, shed 37 cents to $95.96 a barreland Brent North Sea crude for delivery inthe same month slipped 36 cents to$112.22. A call by the G7 industrialnations for oil producers to increaseoutput interrupted a crude rally fuelledby US production facility closures due tohurricane Isaac, said IG MarketsSingapore market strategist Justinharper. “The G7 seem a little late inmaking this request on oil producers aswe could see subdued demand for thesecond half of the year, keeping energyprices contained,” he told AFP.

Asian markets mixed

ahead of Bernanke speechHONG KONG

AFP

Asian markets weremixed on Wednesday,with attention turning toa speech by US FederalReserve chief BenBernanke later in theweek as dealers look foran indication of anystimulus by the centralbank. Tokyo gained 0.28 percent by the break, hong Kong added0.15 percent and Seoul climbed 0.26 percent but Sydney gave up0.18 percent and Shanghai shed 0.10 percent. Bernanke is due toaddress US central bankers at their annual meeting in Jacksonhole, Wyoming, on Friday, with investors hoping he will outlineplans for further measures to boost the world’s number oneeconomy. “Players remain in wait-and-see mode leading up to theJackson hole summit where more hints on information about thedirection of monetary policy are expected,” said hiroichi Nishi,general manager of equities at SMBC Nikko Securities. On forexmarkets the euro bought $1.2556 and 98.69 yen in early Asiantrade, compared with $1.2565 and 98.68 yen in New York lateTuesday.The dollar was at 78.60 yen against 78.49 yen. WallStreet provided an anaemic lead after mixed economic data. TheConference Board reported its US consumer confidence indexdropped to a nine-month low of 60.6 for August, down from 65.9in July. The report showed consumers grew less confident aboutbusiness and job prospects in the coming months.

Vietnam wants tradeboost with Pakistan

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