Pages: 7 profit.com.pk Friday, 06 January, 2012

Telecom sector–anchoring Pakistan’s economy Page 4-5

Agriculture collapsein ‘12 Page 3SBP and finance ministrygive conflicting estimatesof fiscal deficit Page 7

KARACHI

STAFF REPORT

F OLLOwiNG the earlier announce-ment by indus Motor CompanyLimited of the discontinuation of

daihatsu Coure, Pak Suzuki Motor Com-pany (PSMC) recently announced simi-lar plans with respect to its 1000cc Altomodel. implementation of euro-ii com-pliant emission standards from July2012 is to blame for this.

Although applicable on all vehiclesassembled locally, PSMC has announcedthat it only plans to cease production ofAlto while its other non-euro-ii compli-ant models (Mehran, Bolan and Ravi)will be upgraded to meet the new regu-latory specifications. we believe the rea-son behind Alto being singled out is thefact that at least three of PSMC’s models(Mehran, Bolan and Ravi), together

comprising more than 60 per cent oftotal units sold in CY10, use variants ofthe same engine thus making it econom-ically feasible to import an upgraded ver-sion of the engine used in these modelsas compared to investing in one whichmakes up 15 per cent of total sales vol-ume, said umar Hafiz at AHL.

DISASTER FOR PSMC?

Not necessarily! even though thiswould impact ePS negatively by approxi-mately PKR 1.05 when viewed in isolation,we believe that PSMC’s Mehran modelwould witness an increased demandowing to this cessation, he added. ‘Our ar-gument is based on the relative pricing ofdifferent passenger cars in the 800-1000cc segment. with Coure no longerbeing an option for customers, Cultus,

priced at Rs957,500 (average) as of Janu-ary 2012, is the next best alternative,’ headded. However, with this price being al-most 25 per cent higher than Alto’s Janu-ary 2012 average price, coupled with theeffect of higher fuel costs owing to CNGcurtailment and halt of production of CNGvariant models, we believe that Mehransales would also be augmented

WILL MEHRAN SAVE THE DAY?

Although it is impossible tocalculate with a high degree ofcertainty at this stage, but even ifCY12 Alto sales (by volume) arereduced by 60 per cent, and halfof these lost sales are captured byMehran, this would entail a top-line net impact of Rs2.6 billion. Ourbase case hinges upon Rs1.8 billion

revenue increase brought about by anadditional 3000 Mehran units beingsold at a CY12 estimated price ofRs597,000. However, being ahigh margin productwith higher degreeof localisation,Mehran salesw o u l dentail

lower costs, especially when viewed inlight of rupee depreciation againstJapanese yen and uS dollar.

Suzuki mulls over Alto discontinuation

Company registrationgoes up by 15 per centduring 2011

ISLAMABAD

STAFF REPORT

SeCuRiTieS and exchangeCommission of Pakistan (SeCP)registered a total of 3,596 companies

during the last year 2011, showing anincrease of 15 per cent as compared to 3,137companies registered during 2010. Astatement of SeCP said out of the registeredcompanies 3,239 were private companies,28 public unlisted companies, 255 singlemember companies, 51 not-for-profitassociation, 15 foreign companies, five tradeorganisations and three companies limitedby guarantee. in december 271 companieswere registered in which private companieshave the highest share in new incorporationtotaling 239 followed by 20 single membercompanies, five public unlisted companies,three not-for-profit associations and foreigncompanies, each, and a trade organisation.Of the three foreign companies, two arefrom Turkey and the uSA and have beenregistered in islamabad; while a foreigncompany from Netherlands is registered inKarachi. foreign investment by nationalsfrom China is witnessed in three new localcompanies in the auto and allied, mineral,and services sectors and by nationals fromSingapore and Afghanistan in two new localcompanies in tourism and communicationssectors. The sector-wise position shows thatthe trading sector has highest newincorporations with 39 companies, followedby services with 35, hajj and umrah serviceswith 20, education with 14, constructionand information technology with 13 each,communications with 12, tourism with 11,and food and beverages with 10. CompanyRegistration Office (CRO), Lahoreregistered the highest number ofcompanies, i.e., 88 followed by CROsislamabad and Karachi registering 78 and67 companies, respectively. RemainingCROs at Peshawar, quetta, Multan andfaisalabad registered 17, 10, seven and fourcompanies respectively. The authorisedcapital and paid up capital of 271companies, is Rs4.53 billion and Rs475.06million, respectively. during the month, 19companies increased their authorisedcapital with the aggregate authorised capitalincrement of Rs1.57 billion and 42companies raised their paid up capital withthe total paid up capital incrementamounting to Rs3.15 billion.

Corruption in LPG industrytouches Rs350b in last 7 years

KARACHI

GHULAM ABBAS

Liquefied Petroleum Gas(LPG) industry in the coun-try has made record corrup-tion of over Rs350 billion inthe last seven years as LPG

mafia seems to be given a free hand tomake money through charging con-sumers with exorbitant prices.

PRICE HIKE

LPG marketing companies, under thecurrent shortage of gas in the country,has also increased the price of the lique-fied gas by Rs30 per kilogram in the lastthree months without any justification,irfan Khokhar Chairman, LPG distribu-tion Association Pakistan (LPGdAP) saidwhile addressing a press conference hereat Karachi Press Club on Thursday.

HELPLESS GOVERNMENT

The highly influential group andprofiteers in the industry were makingan increase without any fear as con-cerned authorities in government werehelpless to control the price forcing thepoverty hit consumers especially in thehilly areas of the country to buy themuch costlier fuel in winter season.

RECORD BREAKING PRICES

As per data provided by Khokhar,the companies were charging the people

with the record additional price ofRs366 and Rs1,416 per domestic slenderand commercial slender respectively.The per kilogram price of LPG in hillyareas including Gilgit Baltistan, Sawat,fATA and others has also reached Rs175without any notification of ministry ofpetroleum or Oil and Gas RegulatoryAuthority (OGRA).

“The price of gas could be reducedto at least Rs90 per kg from the existingRs175 per kg if the government exemptsLPG import of General Sales Tax whilemaking the import feasible to the im-porters,” he said adding that at least13000 MT LPG was imported lastmonth which was 38 per cent of localproduction. According to ChairmanLPGdAP the unjustified increase inprice by LPG companies making inter-national prices an excuse has multipliedthe woes of crisis hit people.

CORRUPTION & IRREGULARITIES

Talking about corruption and irreg-ularities in the LPG industry, Khokharalleged that the price of fuel was in-creased by 541 per cent in the last sevenyears as the production cost jumped toRs92 per kg from Rs17 per kg. fromApril 2006 to January 2012 productionprice reached to Rs92133 per MT thusmaking the additional cost of productionby Rs75133 per MT and Rs75 per kg inlast five years.

LPG MAFIA

Collectively LPG mafia pocketed

Rs350 billion increased price in the pastseven years. in the last seven years, thenumber of LPG producers was increasedfrom five to 11 while there were 90 com-panies currently as compared to earliernumber of 17. The huge irregularitiesmade in the allocation, distribution andaward of LPG quota by the governmentamong retired army officers Khalid Maq-bool, Muneer Hafeez and MoinuddinHaider, two former chairmen of the Na-tional Accountability Bureau and politi-cians, were also reasons for the currentskyrocketing prices of LPG, he claimed.

LPG POLICY 2011

Talking about LPG Policy 2011, hesaid, the country could generate atleast Rs5 billion per year if the policy

was implemented as it would eliminatethe control and monopoly of the LPGmafia in the country.

He also praised dr Asim, ministerof petroleum and natural gas for his ef-forts to implement the new LPG policy.He also appealed prime minister, chiefjustice of Pakistan, and ministry of pe-troleum to take action against LPGcompanies which were busy in blackmarketing and charging the poor peo-ple with exorbitant prices against theinternational rates. He requested thechief justice to remove stay over LPGpolicy in order to provide a cheaperfuel to the consumer. in reply to aquery, he said present and past gov-ernments had failed to curb the cor-ruption and black marketing in LPGindustry which ultimately have fallenheavily on consumers.

g Profiteers charge consumersRs30 per kg in last three months

g LPG mafia steals Rs42m fromthe poor consumers: LPGDAP alleges

g Government can generate Rs5bper year through implementing LPG policy 2011

PRO 06-01-2012_Layout 1 1/6/2012 12:22 AM Page 1

news

Friday, 06 January, 2012

02

CORPORATE CORNERNIT to inaugurateNIT/summit Bank ATM card KARACHI: National investment Trust (NiT) iscoming up as pioneer of yet another value addedinnovative facility of NiT/Summit Bank Co-BrandedATM card for its unit holders with collaboration ofSummit Bank. The inauguration ceremony of theNiT/Summit Bank Co-branded ATM Card will beheld at a local hotel in Karachi on 7th January. MrHussain Lawai, President and CeO of Summit Bankand Mr wazir Ali Khoja Chairman/Md NiTL willdistribute NiT ATM cards among the NiT unitholders. PRESS RELEASE

NBp rehabilitates flooddamaged schools in NowsheraKARACHI: National Bank of Pakistan (NBP), CSRdivision has rehabilitated 10 flood damaged publicsector schools and provided them with furniture,equipment and installed tube-wells for drinking waterin district Nowshera. The objective of rehabilitationwas to make flood-hit schools functional for theeducation by providing furniture, ceiling-fans anddrinking water facility. NBP is running vocationaltraining centers, providing training and skills to ruralwomen to earn livelihood in honourable manner are inprogress. Atlas Khan, Regional Head Peshawar saidNBP will rehabilitate 10 more schools next year and thebank will also set up health camps at Jakra andChamkani villages of Khyber Pakthunkhwa where ateam of qualified doctors will provide healthcare andmedicines to the people. PRESS RELEASE

Warid brings back sIM Jagao offer KARACHI: warid brings back its ‘SiM Jagao Offer’with more invigorating and embracing feel than everbefore. All those warid customers who have not usedtheir warid SiM since 1st October, 2011, can startusing it now to receive a bonus on every recharge forthe next three months. The bonus amount rangesfrom 5 per cent for a reload of less than Rs100, up to25 per cent for a reload of Rs1,000 or more. Thisbonus will not only be eligible for free calls to all localnetworks but also free SMS to all local networks.Customers can also enjoy amazing call rates as low asRs2.99/hour for all calls to fnf for the duration ofthe campaign. PRESS RELEASE

LG and Intel sign strategic allianceLAHORE: LG electronics (LG) and intel entered intoa strategic alliance to adopt and jointly promote intelwireless display (widi) technology. intel widi will beembedded into next year’s LG Cinema 3d Smart Tvs,making them the first in the Tv industry to featureintel widi technology. intel widi is a wirelessconnectivity inter-face which allows for instant, high-definition viewing of content stored in notebooks andother external mobile devices on large screen Tvs,projectors or monitors. “Through this strategicalliance, Cinema 3d Smart Tv users will be able toaccess a wider variety of content in a more convenientmanner,” said Seog-ho Ro, Senior vice President of LGHome entertainment Company’s Tv Business unit.“intel is planning to expand intel widi technology tovarious devices to provide con-sumers the seamless,smarter usage experience,” said Hee-Sung Lee, CountryManager of intel Korea. PRESS RELEASE

Dollar reserves stand at $16.917bKARACHI: The country’s total liquid foreign reservesstood at $16.917 billion during the week that ended onthe 30th of december. According to State Bank, duringthe week in review central bank held $12.877 billion,while the banks other than SBP possessed $4.039billion. STAFF REPORT

Bears grip KSE as foreign selling continuesKARACHI

STAFF REPORT

BeARS seared the localbourse’s floor with a precip-itous drop in the benchmark

KSe-100 index by 174points in thewee hours of trading. Albeit tradingcommenced on a weaker note, ru-mours of engro initiating yet an-other urea price hike kept investor’sinterest alive in ffC and kept theoverall market afloat.

However, persistent disinvest-ment by foreign investors amidsteconomic concerns, news of Na-tional Power international intend-ing to liquidate its 17 per cent stakein HuBC and lack of impetus in-cluding confirmation of urea pricehike crippled the sentiments as theindex faltered sharply.

Profit taking was witnessedtoday at inflated levels as KSe-100

index closed down 174 points at11,188 level with 30m shares tradedtoday, down 36 per cent from yes-terday. fii’s selling in index heavyweights continued to haunt local in-vestors despite attractive earninggrowth of 15 per cent and dividendyield of 8.5 per cent for 2012. Ten-sion between Judiciary and the gov-ernment on non-implementation offormer decisions is expected to en-

hance political noise in the countrybefore the upcoming Senate elec-tions due in March 2012.

fii’s were rumored sellers inenergy scripts while locals wereseen accumulating banking and fer-tiliser scripts. Although red blan-keted most of blue chip stocks,selling pressure in index heavyOGdC made matters worse. Thoughsystematic risks loom large, further

pull back represents opportunity forre-entry into selected stocks, saidSalman vidhani, Senior investmentAnalyst at HMfS.

The KSe 30 index closed at10206.75 levels with the loss of152.39 points, while All Share indexlost 113.08 points to close at 7755.65levels. Total 85 scrips advanced 116declined and 90 remain unchangedout of total 291 scrips traded.

LAHORE

STAFF REPORT

S eCReTARY irrigation Punjabirfan elahi said Asian devel-opment Bank (AdB) has ap-proved an Adf (very soft)loan of $270 million for con-

structing new Khanki Barrage Project asa replacement for the 120 years oldKhanki Headquarters and it plays a piv-otal role in the irrigated agriculture ofPunjab province which is the backboneof national economy.

He further said that the irrigation

department of Punjab, being the cus-todian of the major hydraulic struc-tures, has taken up rehabilitation andmodernisation of barrages located inthe province in phased programmes.On the basis of feasibility and detaileddesign studies, New Khanki barrageis proposed to be 900 ft downstreamof existing headquarters for which aproject costing Rs23,442 million wasprepared and got approved fromeCNeC in 2009.

irfan elahi added that project isdesigned using state of the art tech-niques and is being implemented

through international contract follow-ing AdB guidelines. Civil works arescheduled to start in September 2012and the completion period is fiveyears. implementation of the projectwill ensure sustainable irrigation sup-plies to the command area for the next100 years and it will help in alleviatingpoverty and bringing prosperity to theabovementioned districts Gujranwala,Hafizabad Sheikhupura, NankanaSahib, faisalabad, Toba Tek Singh andJhang. He told that after completion ofheadwork, more than three millionacres of fertile land has been irrigated.

KARACHI: Picture shows Mr Amer Pasha, Country ManagerVisa Inc Pakistan and Afghanistan, handing over thedonation cheque for flood victims of Jamshoro to MsShahbano Alliani, senior strategic manager and genderspecialist, Thardeep Rural Development Programme(TRDP). PRESS RELEASE

pak growers cantopple Indian agriculturerates: Agri Forum Chairman

LAHORE

STAFF REPORT

PAKiSTANi growers canproduce vegetables, fruits,meat and other agricultural

commodities on 25 per cent lowerrates than the indian farmersprovided rates of fertiliser, dieseland electricity in Pakistan arebrought at par with india for theagricultural sector.This was claimed by Agri forumPakistan Chairman, Muhammadibrahim Mughal, while talking to agroup of media here on Thursday.Presently, input cost in agriculture,livestock, fisheries and poultry isthree times higher than that ofindia due to which, Pakistaniagricultural produce is expensive inthe market, Mughal claimed.

Taskforce to implementCNG safety measures

ISLAMABAD

STAFF REPORT

GOveRNMeNT has set upan inter-ministerial task-force to evolve an inspec-

tion and enforcement regime toensure safety of CNG kits and cylin-ders installed in public transportand private vehicles. The taskforcewill be headed by Joint SecretaryMinistry of Petroleum, while direc-tor General Hydrocarbon develop-ment institute of Pakistan (HdiP)will be its secretary, and representa-tives of OGRA, department of ex-plosives, Motorway Police, RTAsand uN disaster Risk Consultantwill be its members. it has alreadyconducted detailed interactions

with the interior ministry, districtadministrations, provincial govern-ments, traffic police and otherstakeholders. Secretary petroleumhas requested provincial chief secre-taries to indicate locations in all dis-tricts for establishment of CNGtesting stations by HdiP. Moreover,ministry of professional and voca-tional training has been requested toarrange for diploma coursesthrough collaboration withNAvTeC and Provincial Technicaleducation and vocational TrainingAuthorities (TevTA) to providetechnical trainings in order to pro-duce skilled personnel who wouldbe deployed at all CNG stations andtesting centers. Taskforce has rec-ommended that refueling procedure

and site safety at CNG pumps wouldbe ensured by Chief inspector ex-plosives (Cie) and OGRA. Rfidchips would be implanted on testedcylinders and scanned prior to refu-eling. it is proposed that private ve-hicles would be inspected annuallyand Public Service vehicles (PSvs)would be tested every four months.After the cut-off date Motor vehicleexamination (Mve) will not certifyvehicle having untested cylindersand RTA shall not grant route per-mits to vehicles having untestedcylinders. damaged, expired andnon-approved cylinders would beseized by police and correct locationof cylinders in PSvs would be de-cided by OGRA and use of multiplecylinders shall be banned.

ADB Approvesloan for Khanki Barrage

After completion ofheadwork, more thanthree million acres offertile land has been

irrigated

PRO 06-01-2012_Layout 1 1/6/2012 12:22 AM Page 2

WiTH 2011 rightly dubbed a blackyear for agriculture, the outlookis not much rosier in the newyear for the economy’s largestemployer. A number of crucial

factors combine to put unbearable downward pres-sure on agriculture growth and productivity. Andfailing urgent and immediate action, the spill-overwill not only affect the sector’s growth, but also thenational GdP, employment and export earning.

One, due to obvious time lags between policyimplementation and onground results, much ofthe policies introducedin ’11 will take intrinsicshape in ’12, with theprospect of a more dis-mal outlook for the lat-ter. Two, area of wheatcultivation has been re-duced by 10-15 pre cent,which will compound

losses in agri-GdP because of flash flood losses inSindh. Three, cultivation mechanics have been al-tered, as indicated by tractor off-take in H2-2011dropping by an alarming 33 per cent. Comparingwith 33 thousand in the first half of the year justended, the number for the last six months came atonly 12 thousand. The trend implies that the ongo-ing year will record a tractors offtake shortfall ofapproximately 40-50 thousand, which in turnmeans that a similar number of farmers will notposture towards mechanisation. So, not only willno new land come under cultivation, but rathereven the present amount will decrease.

These developments have made wheat cultiva-tion non-feasible for a bulk of the farmers. Thewheat support price, set at Rs1050 per maund, isjust not feasible in light of rising input costs alone.

This sets a very dangerous precedent. wheat is thecountry’s staple crop for rich and poor alike. Andconsidering price distortions and cost-benefit feasi-bility, farmers with bare-minimum initiative willshift out of wheat production.

The cotton situation, too, is alarming. unlikethe sugar industry, which enjoys popular politicalpatronage, the cotton sector has not been blessedwith government intervention this year. The indus-try is already suffering with international cottonprices at their lowest level in two years. And sincethe crash followed an abnormal hike last season,the export industry has been caught off guard aswell, with compound losses for national growth.The worst sufferer, of course, is the helpless cottonfarmer, whose livelihood erodes with little chanceof help from concerned quarters.

Overall, i see the agriculture sector taking a 10-15 per cent battering in ’12. Support price distortionsand lack of official patronage are not all. This seasonhas so far been without the usual rainfall, a situationaggravated by the decision to close dams. Plus, withdiesel price flirting with the Rs100 level, coupledwith savage energy shortage, farmers are unable tocontinue using tubewells as their alternate watersource. The prohibitive cost means water will remainscarce. Hence low growth, low productivity and poorsectoral results in the current year.

Therefore, ’12 is likely to be a very dismal yearfor the agriculture sector, particular the farmer. Thegovernment no longer sits comfortably on its strate-gic reserves either. Reports indicate that a good 30per cent of the stock has been lost to poor storagearrangements. The turbulence is concerning and canquickly cause numerous spill-over shocks. deterio-rating agriculture will push yet more people from theperiphery, burdening the already unsustainable city-urban structure. At a time of low growth, increasingunemployment will further tear the fragile socialstructure at the seams. And loss in agriculture out-put will seriously compromise export earning, some-thing the country can ill afford when the other armof revenue generation – tax machinery – is not muchto write home about. unless timely action is taken,farmers too will join the tidal wave of public discon-tent, a worrying sign for all parties concerned, espe-cially a government in election year.

The writer is President,Farmers Association of Pakistan

IN principle, the central bank gover-nor embodies everything capitalmarkets hold as intrinsic truthwhen he says consumer expectationsurveys will facilitate forward-look-

ing monetary policy. There can be no argu-ments with the other assertion at SBP’scentre for survey research either, that suchexercises help gauge inflation expectationsand economic confidence of households, inaddition to popular reaction to policy for-mulation and subsequent economic implica-tions.

But coming to the factual, public feed-back, though important, accounts for pre-cious little when central bank autonomy iscompromised. Perhaps the good dr ishratHusain, himself a former SBP governorand director iBA, the support institutionfor the CSR initiative, should have made apoint of this, considering how central bankprinting presses continued to undermineits core price-stability function even as hepraised the initiative. for, as things stand,monetary policy is haphazard at best, and

not because the public feedback loophasn’t existed so far.

we, along with numerous stakeholders,have endlessly debated the erosion of mon-etary policy due to the government’s bor-rowing excesses. first, when rates werejacked up, the government didn’t stop bor-rowing, diluting the anti-inflationary im-pact of the hawkish policy stance, leavingnothing to show for sidelining private sectorinvestment in crunch time. Then, whenrates dropped dramatically, the governmentstill kept borrowing, crowding out crucialprivate sector investment critical to snap-ping out of chronic stagflation. expectingpublic opinion to influence interest rate andmoney market decisions in such circum-stances amounts to ridiculing the very peo-ple consulted for the exercise. Mr Anwar’sinitiative is appreciated, though it shouldhave been preceded by a visible show ofsafeguarding the bank’s autonomy, so muchof the work now being done is not just an-other waste of time and resources.

Forward looking

monetary policy?

The largestemployer is likelyto take a 10-15pchit in the new year

Agri collapse in ’12

Tariq Bucha

E D I T O R I A L

Derivatives and shari'a

ARe derivatives acceptable inislamic finance? Of coursethe answer is yes, but onemust appreciate the differ-ence between islamic deriva-

tives and their conventional counterparts.furthermore, while the use of derivative con-tracts is acceptable in islamic finance, there arelimits to trading in them. On a philosophicallevel, almost all islamic financial products arein fact examples of derivative contracts. for ex-ample, a Sukuk (an islamic equivalent of abond) may link the returns of an asset (e.g., a

property) to an interest rate mechanism suchas LiBOR. what are derivatives? Any financialproduct that may derive its returns from anasset other than what it immediately invests inmay technically be a derivative product. Themost common examples of derivative productsinclude options, forward and futures contracts.while the commonly held view amongstshari’a scholars is that trading in such con-tracts is forbidden in islam, the financial engi-neering in islamic banking and finance hasresulted in a number of islamic options, for-ward and futures contracts that may be usedfor risk management and hedging.

Amongst the contemporary shari’a schol-ars, Professor Hashim Kamali is perhaps theonly one who has taken an unambiguous viewon derivatives. Most other scholars’ opinionsare in line with the rather conditional view ofthe fiqh Academy of the Organisation of is-lamic Conference (commonly known as theOiC fiqh Academy), which states that the wayderivatives are structured and traded in con-ventional financial markets is not permissible.

it must, however, be emphasised thattrading in options (rights to buy and sell), for-wards and futures contracts is not permissibleunder shari’a. The use of such contracts is per-missible solely for hedging purposes and notfor pure speculative reasons. Consider the fol-lowing example: Party A is a Pakistan-basedcommodity broker who has bought soya beansfrom a uS-based commodity broker for a priceof $3m to be paid in one month. Party A wouldlike to hedge against this foreign exchange(dollar) exposure in a shari’a compliant man-ner. This can be done in various shari’a com-pliant ways including the following: Thisstructure is based on two promissory arrange-ments:

A bank gives a promise to Party A at a giventime to buy Rs210 million for a price of 1.3c perone rupee on a future date – Promise 1. Simul-taneously, Party A gives a promise to the bankto sell $3m for a price of Rs.70 per dollar (or aprice of one rupee for $0.01428) on the futuredate – Promise 2.

The following are important shari’a con-

siderations for prom-ises:1. Promises in is-

lamic law are notlike contracts, i.e.,while contracts are binding on both thetransacting parties, promises are bindingonly on the promisor if the promisee de-cides to call upon it.

2. Only unilateral promises (or two or moreunequal promises) are binding.

3. Two equal and oppoaite promises areconsidered as a contract, and if such anarrangement gives rise to a binding for-ward sale contract, this is deemed not incompliance with shari’a.

4. Two promises are considered as equaland opposite if they are given by the sametwo parties on the same object for thesame price exercisable at the same time(or during the same period) but one ofthem is a promise to purchase and theother is a promise to sell.

5. Two promises are not considered as equal

and opposite if at least one ofthe following conditions isnot met:(a) The two promises aregiven by the same two par-

ties;(b) Promises are given on the same object;(c) Promises are given for the same price;(d) The two promises are given for the same

date (or period); and(e) One promise is to purchase and the other

promise is to sell. in the above example, the condition 5(c)

is not met, as the agreed exchange rates differ(one rupee = 1.428c versus one rupee = 1.3c).Hence, they are not equal and opposite, andare therefore not considered together as abinding forward sale contract. in conclusion,we assert that it is possible to structure deriv-atives in conformity with shari’a.

The writer is a shari’a advisor to anumber of banks and can be contacted at

humayon@humayondar.com

Humayon Dar

For comments, queries and contributions, write to:

email: profit@pakistantoday.com.pk ph: 042-36298305-10 Fax: 042-36298302 Website: www.pakistantoday.com.pk

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Are derivativesacceptable in Islamicfinance?

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Used imported cars better than localThis is with regards to the article, “Market flooded with used cars”, published on

4th of January. Local car manufacturers have completely failed to provide good

cars at affordable prices. They have created a monopoly and increased the prices

by 250 per cent in the last four years, while rupee has also devalued by 40 per

cent, only in the last four years. Local manufacturers make low quality cars and

sell them on high prices. furthermore, they don’t have stocks and take months to

deliver as well as their brokers take extra for delivery on time. imported cars are

used, but are in excellent condition which makes you feel that you have paid for

right thing. if we do not import used cars, then we will only be able to afford a

Suzuki Mehran at 2 million rupees, as the monopoly holders will be in a position

to increase the price to as much as they like to. Similarly, to bring in the imported

cars, we are required to pay huge taxes above 10,000 dollars on each car to the

government exchequer.

SHOAIB KHAN AFRIDI

LAHORE

shArI’A MATTers

PRO 06-01-2012_Layout 1 1/6/2012 12:22 AM Page 3

Friday,06 January,2012

04news

Pakistan has lots of potential andenergy and this energy can betransformed into socialisation,education, commerce,technology and health

Naeem Zamindar Ceo Wateen

KUNWAR KHULDUNE SHAHID

PAKiSTAN Telecom Authority(PTA) covered a wide gamutof upgradation measures toenhance the quality of its

services in the year 2011. These meas-ures are shaped up to not only help theAuthority in its individual quest forperfection; they would also cater thenational interests and the develop-ment of national economy as a whole.ever since the inception of PTA in1996, it has been active in vying to bol-ster the national economy by doing itsbest to contribute in every way possi-ble. The actions taken in 2011 aretouted by the experts as going a longway in making the previously unfath-omable targets; achievable.

LuCrATIve NuMBersin synchrony with its vision, businessfeasibility has always been at the apexof any priority list that PTA conjuresup. This coupled with the interests ofthe consumers, forms the foundation ofthe PTA structure, and its goals. And ofcourse, with such an unambiguous ap-proach towards, the impressive num-bers posted in 2011 were a fittingoutcome. Pakistan’s teledensitytouched 68.39 per cent – a 6.7 per centrise from 2010. Mobile subscribers atthe tail-end of 2011 were estimated tobe around 108.9 million – flaunting agrowth rate of 10 per cent; which istwice as much as that of the previousyear. There was a precipitous ascent inmobile penetration as well, as the num-

bers rose to 65.4 per cent – from 60.4per cent last year. Number of Cell siteshas also increased from 30,126 in June2010 to 31,303 when the data was col-lected at the end of last year. Cellularindustry’s ARPu also depicted ahealthy increase from $2.41 in the pre-vious fiscal year to $2.45 this timeround. Mobilink continues its unrelent-ing presence at the top of the pile as faras mobile subscribers market is con-cerned, with a 30.7 per cent share, fol-lowed by Telenor (24.5 per cent), ufone(18.9 per cent), warid (16 per cent) andZong (10 per cent).

BroADBAND MArKeTdespite wireless technologies taking overthe lion’s share of broadband market, thenumber of broadband users crossed theone million mark by rising up to 1,491,491at the end of fY2011 from 900,648 previ-ously – showcasing a 66 per cent jump. Thebroadband spread rose from 0.55 per centto 0.89 per cent as well. PTCL was at thetop of the broadband clientele with848,379 holding 57 per cent market share.PTCL was followed by wateen in the afore-mentioned stat with 218,506 customersand 15 per cent of the market share.

LoCAL Loop

The local loop (LL) segment of the indus-try also depicted a decent progression asit faced a daunting competition from thewireless solutions; including mobile cel-lular services. LL teledensity was calcu-lated at 3.4 per cent, with a subscription

of 5.72 million inJune 2011. PTCLmaintained its domi-neering presence,and was the domi-nant operator inthe fLL markerwith 74 per centof the marketshare. The Longdistance and in-ternational (Ldi)carried 11.4 billioninternational min-utes compared to 9.5billion minutes inthe previous year– showcas-ing a 20p e rc e n tgain.

reveNue CoLLeCTIoNThe telecom sector’s contribution to thenational exchequer was a massive Rs116.9billion. GST/fed rose by 20 per cent toRs52.6 billion. The total telecom revenueswere at their zenith this year, reaching anall-time high of Rs362 billion. Cellular in-come was also bolstered and took an 11 percent spike to Rs262 billion from Rs236 bil-lion previously. Over the past three years,the Authority has amassed around Rs40billion against APC for uSf. in its endeav-our to curtail grey traffic, the Authoritysaved revenue of $26 million.

Pakistan’s teledensity touched

in 201168.39%

Mobile subscribers at thetail-end of 2011 were estimated to be around

108.9m Rs116.9b

The number of broadband users rose to

1,491,491at the end of FY2011

ISLAMABAD

AMER SIAL

with the Planning Commis-sion estimating that onemillion youth would be en-tering the work force every

year till 2040, the government has noplanning of how to provide employmentto the young population comprising al-most 50 per cent of the total that ac-cording to official estimates is under 25years of age.

According to the Pakistan Telecom-munications Authority (PTA) country’steledensity has increased to 68.6 percent.The total mobile subscribers havereached a record level of 111.1 million atend October 2011, up from 109.6 millionsubscribers on June 30, 2011.

The telecom revolution in Pakistanstarted with the deregulation of telecomsector in 2001. The number of sub-scribers jumped from mere 300,000 toover 1 million within one year. introduc-tion of calling party pays regime acted asa catalyst to add up to 1 million sub-scribers every month in subsequent

months. Cut throat competition in themarket resulted in Pakistan having thelowest average revenue per user (ARPu)in the world. However, despite a recordincrease in voice segment the data con-nectivity has failed to take off in the coun-try that could promote impetus to othersectors. Mobilink remains the marketleader with 33.5 million customers, fol-

lowed by Telenor with 27.6 million.ufone 20.8 million, warid 15.9 million,and Zong showed the most promisinggrowth with 13.1 million customers. How-ever the figures for broadband connectiv-ity were least impressive as the countryhas only 1.6 million subscribers at endSeptember. The wireless technologieshave helped increase the base but still

overall the market remains at a nascentstage. wimax has over 478,000 cus-tomers while evdO has almost 404,000customers, while the landline based dSLservice has over 730,000 subscribers.

These mobile companies have largecustomer base as compared to any otherentity in the country. However, they havefailed to tap the huge number of cus-tomers to other productive use. The ex-periment of mobile banking in Pakistanhas proved very successful, as the pene-tration of conventional banking remainslow in the country. But no company hasattempted to opt for tailor made solutionsfor the agriculture, education or health-care sector. Chairman PTA dr Mo-hammed Yasin is of the opinion thatPakistan has emerged as one of the lead-ing markets in telecom sector especiallyin the voice segment but the mushroom-ing of data connectivity has not taken offdue to the non availability of local con-tent and applications. Since the local tele-com operators have failed to developlocal content and applications, PTA hasentered the field by launching an onlineportal.

There is huge potential for local con-tent and applications for education,health, governance and banking. Thegovernment has failed to come up withsome innovative approach to push broad-band penetration in the country; eventhough experts have proposed subsidis-ing projects in main cities from the Rs80billion universal Service fund. The gov-ernment on the other hand thinks thatthe upcoming auction of technology neu-tral licenses for 3G or for other emergingtechnologies would be helpful.

Success of telecom sector in Pakistanis seen as model for transformation andgrowth even by the entities of other sec-tors. Nearly all the Power distributioncompanies (diSCOs) want to implemententerprise resource planning (eRP) soft-ware to improve their planning and deci-sion making. They think the adoption oftechnology could help them overcomemany of their woes and look towards tel-cos to provide answers through iCT. Thefuture for these telcos lies in convertingto complete solution providers instead ofbeing mere service providers.

Telecom sector – anchoring Pakistan’s economy

The telecom sector’s contribution to thenational exchequer was

Telcos should opt for becoming complete solution providers

PRO 06-01-2012_Layout 1 1/6/2012 12:23 AM Page 4

KARACHI

ISMAIL DILAWAR

ANALYSTS dub it a show of anabsolute mismanagement bythe country’s economic man-agers, as net flow of foreign in-

vestment in Pakistan nosedived by 59 percent during first five months of current fis-cal year, July-Nov fY12. State Bank of Pak-istan Thursday reported that net flow offoreign investment witnessed an accumu-lative drop of $443.4 million and shrank to$305.3 million from $748.7 million of thecorresponding period in fY11. during thereview period, the foreign direct and port-folio investment in the country posted a re-spective decrease of 27 per cent or $156.3million and 164 per cent or $290.7 million.FOREIgn InvEstmEnt FROm dEvELOpEd ECOnOmIEsdROppEd by 62 pER CEnt: A geo-graphical account of foreign investmentshows that investment from developed

economies, including countries from euro-pean and North American regions, declinedby 62 per cent or $265 million to $160.4million as against $425.5 million investedduring the same months last year. The in-vestors from developing economic of Asiaand African regions also remained in thered zone and reduced to $156.8 millionduring July-Nov fY12 from the previous$284.8 million. This depicts a slump of 45

per cent or $128 million in monetary terms.FOREIgn pubLIC InvEstmEntInCREAsEd by 77.6 pER CEnt:foreign Public investment, however, setin the green zone and increased by 77.6per cent from the negative $4.9 million tonegative $1.1 million. Sector-wise datashows that economic groups includingfood, tobacco and cigarettes, chemi-cals, pharmaceuticals, cement, ceram-ics, basic metals, electrical machinery,transport equipment, power, trade,communications and financial busi-ness saw the offshoreinvestors investingmoney as low as 51per cent, 100 percent, 87 per cent,100 per cent, 99 percent, 29 per cent,40 per cent, 145 percent, 108 per cent,688 per cent, 176per cent and 97 percent, respectively.

OvERALL dECLInE In ECOn-Omy: Analysts said this was the amountcoming from those foreign companieswhich were already operating in Pak-istan. “The portfolio investment is mar-ginal,” said Asfar Bin Shahid, a senioreconomist. The analyst said the country’scorporate sector was not growing in tan-dem with the economy which was in-creasing demand and consumption inthe country through creating em-ployment and increasing ex-ports. “Thisis becausethere is anoverall de-cline in the

economy,” A.B Shahid said.The analyst appeared critical of gov-

ernment saying while the country wasfacing acute energy shortage economicmanagers had no solution in hand.“There is no focus on the part of govern-ment which, perceivably, is absolutely in-capable of managing the economy,” theeconomist viewed.

05

Friday,06 January,2012

news

inveSting in future

Zong made a cumulative

investment of $1.5 billion in 4 years

and it has deposited 26b rupees as

taxes during the same period

FAn YUn JUn CEO Zong

cuStomer Service

I believe our centricity

towards Customer Service

mentality as an organisation is

our greatest strength

MUnEER FAROOqUICEO, Warid Telecom

SuStainable practice

Our corporate strategy

reflects our commitment to

sustainable business

practices

RASHID KHAnPresident and CEO Mobilink

Naeem Zamindar Ceo Wateen

Startling proSpectS

The Pakistani market is still in

its infancy and the prospect for

the country and the telecoms

industry is startling

LARS CHRISTIAn IUEL CEO Telenor

eNCourAGING INvesTMeNT Owing to an influx of around $493 mil-lion in telecom and fdi of $79 million,there was overwhelming buoyancy asfar as the investment in the sector isconcerned. The imports had a jump of$766 million from $725 million. Mobilehandset imports soared to the $218 mil-

lion mark, showing a leap of 29per cent. PTA left no

stone unturnedin its pursuit

of encour-aging for-e i g ni n v e s t -ment in

our neck ofthe woods.

BALANCeD reGuLATory poLICyApropos balanced regulatory policy, PTA

flagged, during the year industryissues, encompassing mat-

ters including; highGST, levy of

provin-c i a l

taxes and introducing 36 licensing.when needed PTA issued Show CauseNotices, brought about penalties, sus-pended licenses and sensitized telecomoperators on SOPs. To further amelioratethe service quality, PTA introduced Cel-lular Mobile Network qoS Regulations2011 and GPRS/edGe quality of ServiceRegulations, 2010.

sAFeGuArDING INTeresTsPTA has taken scores of initiatives tosafeguard the consumer interest, in-cluding the likes of new online com-plaint management system, SOP tocontrol spam, unsolicited telemarketingand a multitude of technical measuresto purge out ‘obnoxious and fraudulent’communication, Anti-Spam filters,common Short Code allocation, SMSblocking, Pre-NPR data and other suchfacilities. The new Rabta informationPortal will also go a long way in provid-ing the much needed information andcontent at a solitary place.

suBsCrIBer verIFICATIoNLaw enforcement agencies were alsoaided by PTA owing to a comprehensivesubscriber verification and authentica-tion system to deal with illegal and un-verified SiMs. A wide range of measureswere taken, including the unveiling of

Subscriber verification System, moni-toring system, and another system

to purge the database of mobilesubscribers. There globally ac-claimed projects were super-

vised via field surveys and rendezvouswith Customer Service Centres. in col-laboration with law enforcement agen-cies, PTA has carried out 45 raids since2009 against the grey traffickers. TheAuthority also blocked 1095 websitesafter consumer complaints.

Qos surveysAmidst quality of Services (qoS) surveysPTA took actions against the telecom op-erator if there was any plunge in the re-quired parameters, directing the respectiveCMTOs to improve their services. As acorollary of PTCL qoS survey, a distortionof the parameters divulged in the com-pany’s license terms and conditions wasrevealed and appositely dealt with afterPTA issued a Show Cause Notice. PTCLalso covered all the bases while orchestrat-ing the second comprehensive qoS surveyfor wireless Local-Loop (wLL) sector, ofLimited Mobility verification of all opera-tional wLL licensees and their qoS werefound to be up to the mark.

eDuCATIoNAL upsurGePTA continued to spread its message ofresearch in the telecom sector via asso-ciations with educational institutions.under PTA Academia Linkage pro-gramme, PTA signed Memorandums ofunderstanding with leading universi-ties of Pakistan to encourage researchand become breeding grounds for fu-ture connoisseurs of the field. Goldmedals and cash prizes to universitystudents, who had excelled in their tele-com and iT projects, were also given to

further shore up the Authority’s questof expanding its repertoire.

GLoBAL ApproBATIoN PTA’s performance was praised both atthe regional and international level,and the Authority was announced asthe Most Progressive Telecom Regula-tor in South Asia for the year. ChairmanPTA, dr Mohammed Yaseen had therevered distinction of receiving the BestTelecom Regulatory Leader of the Yearfrom the South Asian, Middle easternand North African (SAMeNA)Telecommunication Council.

vIsIoN 2020even though PTA has reached unprece-dented heights, the Authority is still vyingto continue to enhance the sector in syn-chrony with the latest updates. PTA un-veiled its ‘vision 2020’ document, whichenvisions future developments needed toensure that PTA continues its upsurge dur-ing the next ten years as well. The docu-ment is designed to aid policy makers insynthesizing the best policies possible toensure that the customer sanguinity andthe technological advancement continue atthe same pace. it is being prognosticatedthat numbers of mobile users, broadbandsubscribers and fixed line customers willsurpass the marks of 160 million, 19 mil-lion and 5 million respectively, by 2020.

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

khulduneshahid@gmail.com

Telecom sector – anchoring Pakistan’s economy

Foreign investment down 59pc to$305.3m during July-Novemberg $443 million drop in FDI during July-November

Infographics by Babur s

aghir

PRO 06-01-2012_Layout 1 1/6/2012 12:23 AM Page 5

top 5 perForMers sector wisesyMBoL opeN hIGh LoW CurreNT ChANGe voLuMe syMBoL opeN hIGh LoW CurreNT ChANGe voLuMe

Food ProducersAdam Sugar 18.50 18.85 18.55 18.69 0.19 4,071AL-Abbas Sugur 89.79 89.89 86.00 89.89 0.10 2,199Ansari Sugar 7.58 7.50 7.50 7.50 -0.08 3,000Chashma Sugar Mills 7.95 8.24 8.00 8.00 0.05 2,012Clover Pakistan 54.60 55.00 51.95 54.60 0.00 160

Household GoodsAL-Abid Silk Mills 24.50 25.50 24.50 24.50 0.00 1Diamond Ind. 8.20 8.93 8.20 8.20 0.00 1Pak Elektron Ltd. 3.49 3.64 3.35 3.40 -0.09 18,006Singer Pakistan 15.94 15.94 14.94 15.94 0.00 1Tariq Glass Ind. 8.20 8.30 8.01 8.22 0.02 3,417

Personal GoodsAmtex Limited 1.36 1.40 1.26 1.38 0.02 24,704Artistic Denim Mills 21.75 21.50 21.00 21.45 -0.30 5,547Ashfaq Textile 8.50 8.50 8.50 8.50 0.00 1,000Azam Textile 1.11 1.60 1.11 1.11 0.00 1Azgard Nine 2.91 2.98 2.87 2.94 0.03 540,170

Future ContractsAHCL-JAN 28.00 28.20 27.70 27.99 -0.01 37,500ATRL-JAN 112.18 113.90 112.11 112.52 0.34 456,000DGKC-JAN 20.10 20.55 20.07 20.11 0.01 273,000ENGRO-JAN 97.58 98.30 96.21 96.56 -1.02 629,500FFBL-JAN 44.65 44.90 43.75 44.01 -0.64 627,500

Pharma and Bio TechAbbott Laboratories 100.12 100.00 99.85 100.00 -0.12 409Ferozsons (Lab) Ltd. 79.00 77.10 77.00 77.00 -2.00 400GlaxoSmithKline Pak. 67.84 68.00 67.65 67.84 0.00 291IBL HealthCare 18.65 19.60 17.91 19.40 0.75 45,144Sanofi-Aventis 144.81 141.00 141.00 141.00 -3.81 500

Fixed Line TelecommunicationP.T.C.L.A 10.39 10.17 10.00 10.09 -0.30 219,504Pak Datacom Ltd 34.50 36.20 34.50 34.50 0.00 1Telecard Limited 0.80 0.84 0.77 0.80 0.00 6Wateen Telecom Ltd 1.79 1.89 1.75 1.82 0.03 60,883WorldCall Telecom 1.00 1.05 0.91 1.00 0.00 410,692

ElectricityGenertech 0.30 0.39 0.30 0.30 0.00 4Hub Power Co. 34.66 35.31 34.71 35.05 0.39 1,405,470Japan Power 0.64 0.65 0.60 0.64 0.00 203,501K.E.S.C. 1.66 1.67 1.62 1.62 -0.04 46,105Kohinoor Power 1.50 1.70 1.50 1.50 0.00 241

BanksAllied Bank Ltd 56.21 58.00 55.16 57.79 1.58 46,257Askari Bank 10.25 10.30 10.06 10.12 -0.13 135,530B.O.Punjab 5.94 6.08 5.76 5.85 -0.09 585,795Bank Al-Falah 11.75 11.75 11.54 11.60 -0.15 305,232Bank AL-Habib 28.72 28.90 28.61 28.76 0.04 21,374

Non Life InsuranceAdamjee Ins 47.77 48.40 47.00 47.74 -0.03 133,097Atlas Insurance 36.21 37.00 36.00 36.00 -0.21 4,900Century Insurance 6.80 6.99 6.80 6.80 0.00 300EFU General Ins 37.51 39.00 37.70 38.81 1.30 2,601Habib Insurance 10.00 10.00 9.90 10.00 0.00 802

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

Financial ServicesAMZ Ventures A 0.38 0.39 0.30 0.31 -0.07 30,974Arif Habib Investmen 14.36 14.90 14.36 14.36 0.00 10Arif Habib Ltd. 14.83 15.30 14.21 14.99 0.16 9,643Dawood Cap.Man XB 0.65 1.09 0.65 0.65 0.00 10Dawood Equities 0.94 1.00 0.90 1.00 0.06 9,000

Equity Investment Instruments1st.Fid.Leasing Mod 1.55 1.58 1.56 1.57 0.02 12,973AL-Noor Modar 4.20 4.07 4.07 4.07 -0.13 1,000B.F.Modaraba 4.00 4.49 4.00 4.00 0.00 100B.R.R.Guardian 2.26 2.26 2.25 2.26 0.00 150Cres. Stand.Mod 0.50 0.49 0.40 0.49 -0.01 26,517

MiscellaneousCentury Paper 13.30 13.30 13.01 13.28 -0.02 2,390Pak Paper Prod. 32.23 33.83 32.60 33.57 1.34 3,105Climax Eng. 6.50 7.50 5.50 6.50 0.00 30,000P.N.S.C. 13.58 13.55 12.91 13.00 -0.58 20,615Pak.Int.Con. SD 71.02 72.50 70.00 70.06 -0.96 7,892TRG Pakistan Ltd. 1.20 1.22 1.19 1.20 0.00 244,826Murree Brewery 66.26 66.50 65.00 66.50 0.24 2,395Pak Elektron Ltd. 3.42 3.55 3.36 3.41 -0.01 25,057Singer Pakistan 15.94 15.94 14.94 15.94 0.00 76Tariq Glass Ind. 8.20 8.69 8.20 8.26 0.06 7,120Pak Tobacco Co. 56.29 56.29 53.50 56.29 0.00 173Shifa Int.Hospitals 26.20 27.50 26.50 27.29 1.09 2,950Hum Network Ltd. 16.00 16.47 15.75 16.05 0.05 650Media Times Ltd 12.40 12.40 11.41 12.40 0.00 2Dreamworld 527.00 525.00 525.00 525.00 -2.00 10P.I.A.C.(A) 2.01 2.09 2.00 2.07 0.06 7,511Pak Services 138.65 138.65 131.72 138.65 0.00 50P.T.C.L.A 10.09 10.13 10.01 10.08 -0.01 167,675Telecard Limited 0.82 0.92 0.78 0.82 0.00 11,207Wateen Telecom Ltd 1.76 1.90 1.72 1.73 -0.03 831,437WorldCall Telecom 0.97 1.00 0.93 0.98 0.01 47,306Sui North Gas 16.10 16.15 15.90 15.91 -0.19 9,620Sui South Gas 19.27 19.25 18.85 18.90 -0.37 8,795American Life 14.01 14.25 14.01 14.05 0.04 1,800EFU Life Assur 73.94 72.10 72.00 72.01 -1.93 1,147AKD Capital Ltd. 23.06 23.99 22.60 22.60 -0.46 850Pace (Pak) Ltd. 1.36 1.49 1.30 1.35 -0.01 142,969Netsol Technologies 8.75 9.18 8.70 8.84 0.09 144,673

syMBoL opeN hIGh LoW CurreNT ChANGe voLuMe

Oil and GasAttock Petroleum 416.39 418.00 415.00 415.09 -1.30 9,152Attock Refinery 111.37 113.48 111.01 111.59 0.22 868,241Burshane LPG 22.52 23.00 22.76 22.99 0.47 1,533Byco Petroleum 6.80 6.92 6.61 6.82 0.02 302,860Mari Gas Co. 85.28 87.00 85.50 85.99 0.71 63,469

ChemicalsAgritech(PREF)(R) 0.01 0.01 0.01 0.01 0.00 5,000Arif Habib Co SD 27.88 28.18 27.47 27.87 -0.01 568,749Bawany Air Products 5.68 5.68 4.72 5.68 0.00 5Clariant Pakistan 152.56 152.25 150.00 150.05 -2.51 5,607Dawood Hercules 40.57 40.82 39.65 39.81 -0.76 79,999

Industrial metals and MiningCrescent Steel 18.81 18.89 18.30 18.30 -0.51 6,639Dost Steels Ltd. 1.10 1.20 1.10 1.10 0.00 3,480Huffaz Seamless Pipe 8.09 8.65 8.11 8.11 0.02 12,150Int. Ind.Ltd. 35.25 35.50 33.51 33.54 -1.71 10,504Metro Steel 9.57 9.95 9.57 9.57 0.00 10

Construction and MaterialsAl-Abbas Cement 2.60 2.70 2.61 2.61 0.01 11,500Attock Cement 51.54 51.90 51.54 51.54 0.00 202Bal.Glass 1.78 1.78 1.72 1.78 0.00 100Berger Paints 13.60 13.90 13.60 13.88 0.28 7,300Cherat Cement 8.99 9.97 8.56 9.25 0.26 222,766

General IndustrialsCherat Packaging 27.37 27.50 26.75 26.76 -0.61 10,377ECOPACK Ltd 3.65 3.85 3.55 3.65 0.00 5,002Ghani Glass Ltd 41.03 41.50 41.03 41.03 0.00 177MACPAC Films 7.78 8.00 7.97 8.00 0.22 5,195Packages Limited 82.29 82.10 80.25 81.10 -1.19 380

Industrial EngineeringAdos Pakistan 5.45 5.80 5.75 5.76 0.31 1,880AL-Ghazi TractorsXD 186.78 189.00 181.20 186.78 0.00 64Bolan Casting 28.50 28.50 28.50 28.50 0.00 200Dewan Auto Engg 0.75 0.75 0.75 0.75 0.00 9Ghandhara Ind. 6.56 6.50 6.36 6.40 -0.16 10,004

Automobile and PartsAtlas Battery Ltd. 163.61 164.00 162.00 163.31 -0.30 2,224Atlas Engineering 58.00 58.00 58.00 58.00 0.00 4,627Atlas Honda Ltd. 122.18 122.18 119.00 122.18 0.00 106Bal.Wheels 26.12 26.12 25.00 26.12 0.00 305Dewan Motors 1.70 1.79 1.70 1.70 0.00 97,184

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

Mutual Funds

Fund offer repurchase NAv

Alfalah GHP Cash Fund 501.2900 501.2900 501.2900 Askari Islamic Asset Allocation Fund 114.7196 111.8516 111.8516Askari Islamic Income Fund 103.6501 102.6136 102.6136 Askari Sovereign Cash Fund 100.6900 100.6900 100.6900 Atlas Income Fund 519.3500 514.2100 514.2100 Atlas Islamic Income Fund 519.0900 513.9500 513.9500Atlas Money Market Fund 516.9700 516.9700 516.9700 Atlas Stock Market Fund 453.1500 444.2600 444.2600 Crosby Dragon Fund 82.9800 81.3500 81.3500 Crosby Phoenix Fund 102.5100 102.5100 102.5100 Dawood Islamic Fund 0.0000 0.0000 0.0000Faysal Income & Growth Fund 103.9600 102.9300 102.9300Faysal Islamic Savings Growth Fund 101.4000 101.4000 101.4000 Faysal Money Market Fund 101.1400 101.1400 101.1400Faysal Savings Growth Fund 101.4400 101.4400 101.4400 First Habib Cash Fund 100.8800 100.8800 100.8800 First Habib Income Fund 100.8900 100.8900 100.8900 First Habib Stock Fund 101.4400 99.4500 99.4500 HBL Income Fund 98.8551 98.8551 98.8551 HBL Islamic Money Market Fund 100.2278 100.2278 100.2278 HBL Islamic Stock Fund 105.1082 103.0473 103.0473

Fund offer repurchase NAv

HBL Money Market Fund 100.2768 100.2768 100.2768 HBL Multi Asset Fund 87.0103 85.3042 85.3042 HBL Stock Fund 97.6745 95.2922 95.2922 IGI Income Fund 101.8987 100.8898 100.8898IGI Stock Fund 112.3545 109.6141 109.6141 JS Principal Secure Fund I 121.5000 111.5200 117.3900 JS Principal Secure Fund II 104.1200 96.5000 101.5800 KASB Cash Fund 0.0000 0.0000 100.1087Lakson Equity Fund 106.3763 103.2779 103.2779 Lakson Income Fund 102.2115 100.7009 100.7009 MCB Cash Management Optimizer Fund 100.5994 100.5994 100.5994MCB Dynamic Cash Fund 103.2259 101.6775 101.6775 MCB Dynamic Stock Fund 83.2931 83.2931 85.4288 NAMCO Income Fund 108.2753 108.2753 108.2753 National Investment Unit Trust 26.55 25.74 25.74PICIC Income Fund 101.3261 101.3261 101.3261 UBL Capital Protected Fund II 106.7800 101.4400 106.7800UBL Islamic Savings Fund 100.4576 100.4576 100.4576 UBL Savings Income Fund 101.9855 100.9757 100.9757

Markets

Friday, 06 January, 2012

06top 10 sectors

38% 01%Construction & Materials

Chemicals support Services

05%Electricity

04%04%

Fixed Line Telecommunication

02%Non Life Insurance

Financial Services

05%Banks22%Oil & Gas15%Personal Goods04%

International Oil PriceWTICrude Oil

$102.54

BrentCrude Oil

$113.70

STOCK MARKET HIGHLIGHTS

Index Change Volume Market ValueKSE-100 11187.88 -174.09 24,557,542 1,383,841,928LSE-25 2882.87 -19.57 736,854 16,207,018ISE-10 2438.94 -68.39 34,540 786,640

Major Gainers

Company Open High Low Close Change TurnoverNestle PakistanXD 3190.65 3234.99 3152.00 3201.36 10.71 12Millat Tractors Ltd. 365.42 371.84 363.00 370.29 4.87 18,806J.D.W.Sugar 74.18 77.88 73.56 77.87 3.69 9,114Sanofi-Aventis 141.00 145.00 141.01 144.39 3.39 710ICI Pakistan 120.70 125.00 120.00 124.06 3.36 42,871

Major Losers

UniLever Pak Ltd. 5397.42 5397.42 5202.00 5226.10 -171.32 202Rafhan Product 2513.28 2410.00 2405.00 2405.00 -108.28 15National Refinery 232.98 233.40 222.00 225.75 -7.23 344,505Oil & GasXD 146.37 146.90 139.22 140.55 -5.82 989,334Dadex Eternit 60.14 57.15 57.14 57.15 -2.99 500

Volume Leaders

Arif Habib Co SD 27.87 28.00 27.00 27.23 -0.64 2,351,596Lotte PakPTA 10.19 10.25 9.98 10.02 -0.17 2,096,556Fauji Fert 43.72 43.74 42.50 42.63 -1.09 2,014,844Fauji Fertilizer 157.00 158.70 155.40 156.52 -0.48 1,730,895National Bank 44.23 44.44 43.69 44.04 -0.19 1,667,054

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

Gold 24K 54,517.00 46,790.00 1,609.00Gold 22K 51,608.00 44,245.00 –Silver (Tezabi) 982.00 842.00 35.05Silver (Thobi) 1025.00 880.00 –

Interbank RatesUS Dollar 90.4136UK Pound 140.8102Japanese Yen 1.1773Euro 116.3352

Buy SellUS Dollar 90.30 91.30Euro 115.04 116.84Great Britain Pound 139.57 141.40Japanese Yen 1.1662 1.1778Canadian Dollar 87.85 90.25Hong Kong Dollar 11.46 11.71UAE Dirham 24.53 24.75Saudi Riyal 24.04 24.22Australian Dollar 91.74 94.46

PRO 06-01-2012_Layout 1 1/6/2012 12:23 AM Page 6

Friday,06 January,2012

news

07

The legal structure needs to bechanged, so that people know that ifyou are unable to pay back to thebanks, it will be decided in six monthsand you will be declared bankrupt

uBL president, Atif Bohkari

KARACHI

ISMAIL DILAWAR

iN 2011 a downwardtrend in commodityprices was witnessedlocally and globally,

observed Pakistan Mercantileexchange (PMeX) in itsoverview of internationaldomestic commodity marketsfor the year 2011. Commoditiesposted the first annual dropsince 2008, paced by declinesin cotton, copper and cocoa, onconcern that the sovereign-debt crisis in europe and acooling Chinese economywould sap demand for rawmaterials. during the year2011, the traded volumes at theexchange increased to Rs802.2

billion from Rs184.4 billion inthe corresponding period ofthe previous year, a growth of335 per cent. Analysts said arebound rally is possible in thenear term but gold is far fromretesting all-time highs. Goldprices fluctuated between$1309.9 and $1900.2 perounce in the year, 2011.The precious yellow metalgained nearly 10 per cent thisyear despite a last quarter dipand a steep decline fromSeptember’s highest ever hit of$1,900 an ounce, its smallestannual rise in three years. itremained down 18 per centfrom a record $1,900.2 set inSeptember, and finished thefourth quarter with its firstquarterly loss in more than

three years. during 2011, thegold saw its traded volumes atthe exchange increasing toRs581 billion from Rs137billion in the correspondingperiod of previous year, agrowth of 324 per cent.Crude oil price fell from$113.83, the highest in themonth of April to its lowest$76.56 a barrel in the month ofOctober. Crude recovered inlast quarter of the year. during2011, crude oil witnessed itstraded volumes at theexchange increasing to Rs98billion from Rs29.3 billion inthe corresponding period ofprevious year, a growth of 234per cent. Oil prices ended 2011up eight per cent as a freshwave of supply concerns

capped a year of unrest anddisruptions in North Africaand Middle east thatoverwhelmed concerns aboutthe economic health of largeconsuming nations.Silver logged its first annualloss in three years on friday,backtracking from a near-doubling in price during 2010,as worries about the globaleconomy and silver pricesfluctuated between $26.60 –48.40 in synchrony with arecent slide in gold hurtdemand. Silver shattered byalmost 10 per cent over theyear of 2011. A continuousgrowth has been witnessed inthe first quarter of year.during 2011, silver saw itstraded volumes at the

exchange surging to Rs123billion from Rs17.2 billion inthe corresponding monthprevious year, a growth of 612per cent. Silver prices peakednear $50 in late April. in thefollowing months, it was abumpy ride as markets weredriven more by eurozoneheadlines than fundamentals.Silver experienced a sharp sell-off in September, but foundsupport near $26 per ounce. indomestic market a downwardtrend in the prices of iRRi-6has been witnessed in lastquarter of the year, 2011. Pricemovement fluctuated wider;maximum price was Rs3,850per 100 Kg in July andminimum price was Rs2,900per 100 kg on the second last

trading day of december. Adrop of 15.22 per cent has beenobserved over the year 2011. ininternational market, despitethe rise, palm oil posted itsfirst annual decline since2008. it lost more than 16 percent this year, a performancethat pales in comparison to the42 per cent gain in 2010.in domestic market, adownward trend in the pricesof palm oil has been witnessedover the year, 2011. Maximumprice Rs5,560 was in themonth of february while theminimum price was Rs4,500per 37.324 kg noticed in themonth of October. A drop of11.59 per cent has beenobserved in prices in 2011.

Traded volumes at pMeX skyrocket by 335pc to rs802bCoMMoDITy rouND up 2011

ISLAMABAD

AMER SIAL

STATe Bank of Pakistan (SBP) and Ministryof finance gave contradictory estimates tothe Senate Standing Committee on financeabout the fiscal deficit, which the central

bank projected over 6 per cent whereas finance Min-istry claimed would be contained at 4.7 per cent ofGdP during the current fiscal year.

search for hydrocarbonreservoirs remainsmuted in 1hFy12

KARACHI

STAFF REPORT

THe country’s search for newhydrocarbon reservoirscontinues to remain muted infirst half of the current fiscal

year (1HfY12) as only six exploratorywells have been spudded, similar to thatof last year, said the analysts. “Thecircular debt and challenged securitysituation particularly in KPK andBalochistan continue to bode ill on thesector’s exploration program while somecarry-over wells were also completed,”viewed Nauman Khan, an analyst atTopline Securities. during this period,the analyst said, the e&P companiescontinued to focus on maximumutilisation of their existing reservoirs,spudding 15 development wells, a notchabove 13 wells drilled in comparableperiod last year. Pakistan Oilfields (POL)and Oil and Gas development (OGdC),during 1HfY12, drilled one exploratorywell each while Pakistan Petroleum(PPL) has yet to spud for new reserves.despite sluggish e&d activities; thesector is expected to optimiseproduction from existing reservoirs andshow attractive valuation, he said.during 1HfY12, Khan said, sectorspudded a total of 22 e&d wellsaccomplishing only 29 per cent of thefull year target of 76 wells. in the sameperiod last year, the sector drilled 23 percent of its target of 80 wells. “Theactivity continue to be skewed towardsdevelopment activities, with 15development wells as against full yeartarget of 45, while only sevenexploratory wells were drilled versusfY12 target of 31 wells,” Khan said. Thelisted sector, he said, remained muted intheir own operating lease with majordependency on their Jv partners. POLspudded one exploratory well and nodevelopment well, while PPL was on theother end of spectrum, with companydrilling one development well and noexploratory well. OGdC has recentlystarted working on their first exploratorywell of the year, while have spudded sixdevelopment wells. Among the last yearcarried over wells, majority of them haveconcluded with not so encouragingresults. it yielded only one discovery inthe Zin block, with that also falling shortof industry’s expectation. The majorexcitement of the year has come fromdiscovery of augment reservoir size fromTal and Naspha block, with PPL andPOL standing at prime beneficiaries.

sBp and finance ministry give conflicting estimates of fiscal deficitg sBp projects over 6 per cent fiscal deficit g Finance ministry claims to retain it at 4.7 per cent

The central bank warned that in case the projectedforeign inflows did not materialise during the cur-rent fiscal the foreign exchange reserves might fallby $5 billion from current level of $17 billion. itsaid the foreign exchange reserves were likely toregister a sharp fall during the second half ofcurrent fiscal year due to large repayments ofexternal debt, including $1.2 billion of theiMf loan. The meeting of the committeechaired by Senator Ahmad Ali was briefed onthe State of economy by the Governor SBPYaseen Anwar and Secretary finance dr.waqar Masud Khan. Briefing the committee,Governor SBP said that if projected foreign in-flows did not materialise then the country’s fis-cal deficit will be over 6 per cent of GdP at theend of the current fiscal year. However Secretary fi-nance dr waqar Masud claimed that the fiscaldeficit would be contained at 4.7 percent of GdP. Hesaid estimates of fiscal deficit were 2.5 per cent ofGdP during the first half of current fiscal year.

The committee was informed by SBP thatthe pressure on foreign exchange reservesand exchange rate has already increased, and re-serves have declined by $1.2 billion till december 31.Pak Rupee has depreciated by 4.4 per cent till dec31, against uS dollar. The meeting was informedthat inflation was declining but still price trends incotton and oil prices were severely affecting the ex-ternal current account. Net capital and financialflows are inadequate to finance the current accountdeficit. The budget deficit was better than last yearbut not in line with annual target. financing of thebudget deficit is tilted towards the banking system,complicating liquidity and monetary management.

pak rupee depreciates by4.4pc against us dollar

The meeting was informed the government’s bor-rowing from banks was Rs648 billion till de-

cember 15, 2011 as against Rs96 billion inthe corresponding period last fiscal year.

even after excluding Rs391 billion set-tlement of circular debt, borrowingswere high. The deterioration in exter-nal account balance and increasedborrowing from banks squeezed themoney market rupee liquidity in-creasing pressure on the money mar-ket overnight repo rate. SBPmentioned that the public debt to

GdP ratio was 59 per cent of GdP andthe total foreign debt has reached to

$61.5 billion by december 31, 2011.Secretary finance said the government

plans to issue euro bonds of $500 millionby March this year whereas international

Sukuk Bonds of $500 million would also belaunched later this year. He said the outstanding

payment of $800 million from uAe owned etisalatwould be received by third quarter of current fiscal year.

He said the auctioning of three 3G licenses would help earn$800 million. He said the total receivables of CSf from uSA were$2.5 billion and it did not include billing after May 2011.

Chairman fBR informed the committee that they have re-ferred 21 cases to National Accountability Bureau, including

one against former member customs Munir qureshi, underthe NATO container case in which a loss of Rs55 billion oc-

curred to the national exchequer. President of Bank of PunjabNaeemuddin Khan informed the committee that they would be

soon auctioning the confiscated property including jewelry ofShaikh Afzal of Harris Steel Mill in Rs8.4 billion scam.

Government borrowingrs648 billion this year

Slowdown in exports and energyshortages could hamper GdPgrowth, which was projected at 3.8per cent as compared with thebudgetary target of 4.2 per cent.The growth in consumption ap-pears to be declining due to infla-tion. investmentdeclined inlast fis-cal yeara n dtrend

appears to continue this fiscal year.The year-on-year inflation in de-cember 2011 was 9.7 per cent; butthe full year inflation is expected toremain close to the target of 12 per

cent. inflation in secondhalf of current fiscal

year is expected toincrease on ac-

count of ad-justments ina d m i n i s -

tered prices and exchange ratechanges. SBP proposed that to re-duce fiscal deficit measures to in-crease the tax revenues wererequired as tax to GdP ratio wasless than 10 per cent in Pakistan.Overall expenditures were undercontrol, but the untargeted subsi-dies were still a major burden oncurrent and development expendi-tures, which are crucial for produc-tive capacity and growth.

yoy inflation at 9.7 per cent

Foreign exchange reservesmight fall by $5 billion

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