Wednesday, 5 September, 2012

Automobile production drives on ISLAMABAD

APP

Despite energy crisis and other related challenges, theautomobile industry of the country performed well as itsproduction increased during the fiscal year 2011-12 ascompared to the previous year. Among the automobilesector, the production of jeeps and cars increased by14.72 percent during the fiscal year (2011-12) ascompared to the same period of previous year, accordingto the official data. The overall production of jeeps andcars was recorded at 154,706 units during July-June(2011-12) against the production of 134,855 units duringJuly- June (2010-11), data of Pakistan Bureau of Statisticsrevealed. During the period under review, the productionof Light Commercial Vehicles (LCVs) also increased by9.34 percent by going up from 19,142 units during 2010-11 to 20,929 units during 2011-12. Production of bussesalso increased from 490 units to 568 units, showinggrowth of 15.92 percent. However, the output of Trucksand Tractors decreased by 7.56 percent and 32.04 percentrespectively. The production of trucks decreased from2,810 units in 2010-11 to 2,597 units in 2011-12 while theproduction of tractors declined from 70,855 units to48,152 units. The production of motorcycles increased by0.43 percent by growing from 1,628,457 units in 2010-11to 1,645,520 units in 2011-12, the data revealed.Meanwhile, during the month of June 2012, theproduction of cars and jeeps surged by 47.29 percent as itjumped from the output of 10,743 units in June 2011 to15,823 units in June 2012. The production of LCV’sincreased by 10.86 percent to reach 1,970 units duringJune 2012 as compared to the production of 1,777 units inJune 2011. Production of busses, trucks and tractorsincreased by 46.67 percent, 140.20 percent and 21percent respectively during June 2012 over the samemonth of last year. However, the production ofmotorcycles witnessed 10.20 negative growth by fallingfrom the production of 149,265 units in 2011 to 134,026units in 2012, the data revealed. It is pertinent to mentionhere that the country’s large scale manufacturing (LSM)witnessed growth of 1.17 percent during the financial year2011-12 as compared to the growth of last fiscal year.Growth of 0.75 percent was witnessed in the indices ofProvincial Board of Statistics that increased from 124.83in 2010-11 to 128.63 during the year under review.Similarly, the indices of Ministry of Industries andProduction increased from 109.87 points to 111.04 points,showing an increase of 0.74 percent. However, the indicesof OCAC witnessed negative growth of 0.32 percent as itdeclined from 83.27 points to 78.60 points.

SBP’S TWO-PRONGED TRIUMPH

NEW DELHI

INP

INDIA and Pakistan will soon sign threeagreements on customs co-operation,trade grievances redressal and mutualrecognition, Commerce and IndustryMinister Anand Sharma said on Tuesday.

“It is a matter of weeks, maximum. There havebeen delays in visits. There have been changes in thePakistan Administration. The Commerce Secretariesshould have met three months ago. I am told thatafter the visit of the Indian External Affairs Minister

to Pakistan, the Commerce Secretaries of India andPakistan will meet in Islamabad. This will be anotheropportunity to take more steps,” he said while ad-dressing a lunch meeting organized for a visiting del-egation of Members of Parliament from Pakistan.

The meeting was organized by the Federa-tion of Indian Chambers of Commerce and In-dustry (FICCI). Sharma felt that the recentdecision of the Indian Government to reduce the

sensitive list by 30 per cent under the South AsiaFree Trade Agreement would benefit Pakistan.He said that the decision covered all sectors thatwere important to Pakistan. India and Pakistanneed to encourage trade by the land route, whichcurrently was very small, he added.

The Minister said that India had proposedopening of the land route for trade along the Sialkot-Hussenewala border in Punjab and the Munabao-Khokharapar rail route. It is also proposed that bothcountries would meet soon to work out a strategy onconnectivity by linking each other’s Capitals by air.At present, Mumbai is linked with Karachi and Delhiwith Lahore. Sharma also mentioned that banksfrom both countries were also planning to openbranches in each other’s lands. Conceding that prob-lems do exist, Sharma said that while he was not try-ing to simplify anything, it was imperative thatirrespective of the issues there must be “maturity,wisdom and will” to overcome challenges that comein the way of building a durable partnership betweenIndia and Pakistan.

‘IndIa, PakIstan to sIgn three agreements soon’

KARACHI

STAFF REPORT

State Bank of Pakistan (SBP) Deputy Governor KaziAbdul Muktadir on Tuesday said the central bankwas developing a new five-year (2013-17) strategicplan for Islamic banking industry.

“The new plan will set the strategic direction forthe Islamic banking industry. This would define thestrategies and action plans to move the industry tothe next level of growth and SBP would expect ac-tive and meaningful involvement of the industry indevelopment of the plan,” Muktadir said while ad-dressing the Islamic Finance News (IFN) Road-show–2012 held here at the SBP’s LearningResource Centre (LRC).

He said the Islamic finance industry is likely toincrease its share in the banking system to 15 per-cent during next five years. Growing from scratchin 2002, he said that Islamic banking now consti-tutes over 8 percent of the country’s banking systemwith a network of 964 branches and over 500 win-dows across the country. ‘Encouragingly, the sus-tained growth of Islamic banking in the countryduring the last decade has also started catalyzinggrowth and development of Islamic capital markets,Mutual funds and Takaful companies etc. Presently,we have 5 Takaful operators, about 30 Islamic mu-tual funds,’ he added.

Muktadir disclosed that the State Bank was alsodeveloping a comprehensive Shariah Governanceframework to further strengthen the Shariah gover-nance in Islamic Banking Institutions (IBIs) andadded that the framework will explicitly define theroles and responsibilities of different organs of IBIsincluding the Board of Directors, Shariah Advi-sors/Committees and Executive Management forensuring Shariah compliance. He said the SBP haddeveloped a comprehensive profit distribution andpool management framework in consultation with

the industry and added that the framework will beissued most probably within this month.

Muktadir said sovereign Sukuk of Rs.369 billion($ 4 billion approx) were issued during last twoyears that have largely addressed the liquidity man-agement issue of the Islamic banking industry. ‘Theregular issuance of the Sukuk, almost on quarterlybasis, has improved market confidence and trad-ability of the Sukuk,’ he added.

He said the central ban had been taking initia-tives to strengthen the legal, regulatory and Shariahcompliance framework, create awareness amongstthe masses and build the Islamic banking industry’sHuman Resource capacity.

Muktadir said SBP would soon be launching amass media campaign to create awareness about Is-lamic banking. “The campaign we believe will be in-strumental in enhancing public awareness andwould give further boost to the growth momentumof Islamic banking industry,” he added.

KARACHI

STAFF REPORT

The implementation of three-year bilateral Cur-rency Swap Arrangement (CSA) between the StateBank of Pakistan (SBP) and the Central Bank of Re-public of Turkey (CBRT) amounting to $ 1 billion inequivalent local currencies began yesterday.

To this effect, the SBP has issued necessary in-structions to the banks for its implementation afterdue consultations with various stakeholders andcompletion of operational formalities with CBRT.

A bilateral CSA was signed between SBP andCBRT by SBP Governor Yaseen Anwar and CBRTGovernor Erdem Baþçý in the presence of presi-dents of the two countries in November last year.

The objective of the currency swap is to promotebilateral trade between the two countries in the re-spective local currencies and any ‘other’ purpose asmutually agreed between the two central banks.

Since the CSA is a bilateral financial transaction,all terms and conditions apply equally to both coun-tries and the pricing is based on standard marketbenchmarks which are widely acceptable in the re-spective domestic markets. The CSA between the twocentral banks would give a positive signal to the mar-ket on the availability of liquidity of other country’scurrency in the onshore market. The arrangementwould augment the pool of liquidity available to fi-nance bilateral trade between the two countries, sup-plementing the already available sources of liquidity.

By virtue of this arrangement, SBP would havethe ability to draw on the swap line and provideTurkish Lira (TRY) to banks in Pakistan. The bankswould on-lend this liquidity to importers/exportersinvolved in trade denominated in TRY. At maturity,the importer/exporter would repay the foreign cur-rency to the lending bank which in turn would repayto the respective central bank. In order to ensuretransparency in determination of market interest

rates, the SBP has decided to conduct competitiveauctions of TRY Loan Facility as under:

All commercial banks would be allowed to takeFE-25 deposits and extend FE-25 loans in TRY forfinancing of imports/exports in accordance with theSBP’s prevailing instructions on FE-25 loans/de-posits. Necessary instructions to that effect havebeen issued vide FE Circular No. 4 on Tuesday.

To provide TRY funding to scheduled banks sothat they can on-lend the TRY to traders with un-derlying trade documents in TRY, SBP would con-duct competitive auctions of TRY Loan Facilityusing proceeds drawn under the CSA with CBRT.Participation in auctions would be dependent onthe submission of documentary evidence of exportor import bills denominated in TRY, SBP wouldconduct ‘uniform price’ competitive TRY auctionsin three and six month tenors. All scheduled bankswould be eligible to participate in such auctions.

Further details on the utilization of TRY in Pak-istan on account of PKR/TRY swap are as follows:

a) Importers with underlying trade documentsdenominated in TRY: On the maturity date of theletter of credit (LC), the importer would pay off theoverseas supplier by borrowing in TRY. Assumingborrowing is for 6 months, the importer would saveon the rupee cost and after six months the importerwould buy TRY against PKR and pay off the TRYloan. Availability of onshore TRY financing wouldencourage importers to open TRY denominated LCs.

b) Exporters with underlying trade documents de-nominated in TRY: Once the contract is established,the exporter would borrow in TRY, sell TRY againstPKR and utilize PKR for its local operations. On thematurity date of the contract, the exporter would re-ceive TRY from the overseas buyer and payoff the TRYloan locally. All banks are expected to educate theircustomers on the additional option of denominatingtheir Trade documents in TRY. SBP would encouragebanks to hold sessions with local trade bodies.

‘Pakistan produces 468,300ton guava annually’

MULTAN

APP

Guava is cultivated at 58,500 hectares in the fourprovinces of the country.

According to a press release issued by themedia liaison unit of the Punjab agriculture de-partment on Tuesday, guava has attained trade

related significance due to its capability to growin different atmospheric and soil conditions andPakistan produces 468,300 tonnes of the fruitper annum. Agriculture experts have urged grow-ers to complete the process of planting new guavaplants in the month of September preferably atsoft and fertile land for enhanced production.

Botanical growth of the fruit is usually sup-ported by grafting. Experts said that grafting inmonsoon season should be shifted to plastic bagsin a greenhouse. A mixture of soil, soil from canaland organic fertilisers be put in the bags and thebags be shifted to a shed after three months.

Water be applied soon after the shifting andthe distance between two plants should be sixmetres. Small plants should get water regularlyafter short durations throughout the year, how-ever, grown up plants need more water at thetime of fruit formation, they added.

Adult guava plants must be saved from a pest

attack through precautionary and curative meas-ures. White-fly can damage the fruit and growersmust consult experts in case of a white-fly attackor other diseases, they added.

Going greatguavas!

SBP’s 5-year plan to expand Islamic banking Conducting auctions of Turkish Lira loan facilityg Regulator also developing a

comprehensive Shariah

Governance framework in IBIsg Sovereign Sukuk of $4bn

during last two years largely

addressed liquidity management

issue of Islamic banksg Global Islamic banking

industry has swelled to $1.35

trillion with an annual growth

rate of over 20 percent

Agreements include

customs co-operation,

trade grievances redressal

and mutual recognition

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02

Wednesday, 5 September, 2012

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERRafhan MaizeXD 4008.80 4199.00 4198.00 4198.00 189.20 40Indus Dyeing 380.20 399.21 399.21 399.21 19.01 100National Foods 245.86 258.15 240.01 258.15 12.29 6,800Shezan Inter. 231.05 242.60 241.50 242.60 11.55 300Island Textile 257.11 268.50 268.50 268.50 11.39 100

Major LosersBata (Pak) Limited 1124.70 1110.50 1068.47 1099.99 -24.71 6,600Mithchells Fruit 359.00 347.00 343.00 343.00 -16.00 300Wyeth Pak Limited 1008.00 1010.00 1000.00 1000.00 -8.00 500Atlas Honda Ltd 147.96 145.00 140.57 140.59 -7.37 7,500AL-Abbas Sugur 101.00 96.25 96.00 96.00 -5.00 1,500

Volume Leaders

Maple Leaf Cement 8.26 9.15 8.31 8.71 0.45 17,455,000P.T.C.L.A 19.04 19.85 18.71 19.03 -0.01 15,795,000Pak Elektron Ltd. 8.82 9.82 8.51 9.51 0.69 11,205,500Fauji Cement 6.72 6.94 6.75 6.77 0.05 10,126,000WorldCall Telecom 3.05 3.14 2.83 2.85 -0.20 9,460,500

Interbank RatesUS Dollar 94.7857UK Pound 150.6144Japanese Yen 1.2084Euro 119.4394

Dollar EastBUY SELL

US Dollar 94.60 95.10Euro 117.82 119.17Great Britain Pound 149.04 150.71Japanese Yen 1.1919 1.2051Canadian Dollar 94.72 96.29Hong Kong Dollar 11.98 12.18UAE Dirham 25.58 25.84Saudi Riyal 25.04 25.29Australian Dollar 95.50 98.02

Business

KARACHI

STAFF REPORT

THE capacity utilization of the ce-ment industry slid to 68.29 per-cent during the first two monthsof FY13, the lowest in one decadeas demand for cement drastically

decreased in both local and international mar-ket.

The decline of cement demand during Julyand August was mainly due to Ramadan andheavy rains in the country.

According to data released by All PakistanCement Manufacturers Association (APCMA),the total cement dispatches that declined by1.64 percent in July posted a decline of 2.82percent in August. “The declining consumptionof cement is a matter of serious concern for theindustry,” said a spokesman of the APCMA.

He said the cement industry invested heav-ily in enhancing its capacities in last decade ba-sically to cater to the expected increase in localconsumption. He said cement capacity in-creased from 16.321 million tons in 2002-03 toover 44.80 million tons in 2012-13. The local

consumption of cement however remained al-most stagnant in past five years fluctuating inthe range of 22-23 million tons. He said theeconomic recession kept the construction sec-tor growth very low. However, he said the ex-ports did provide the cement manufacturers arelief at the start of this century when the ce-ment exports jumped from zero in 2001-02 to10.981 million tons in 2008-09.

The exports have been on decline sincethen reducing to only 8.568 million tons in2011-12. The decline he added continues in thisfiscal year as the exports during the first twomonths of this year declined further by 5.87percent from 1,545,879 tons in July-August2011 to 1,455,061 tons in July-August 2012. Hesaid Pakistan’s exports of cement to India de-creased by a whopping 38 percent during thefirst two months of FY13 to mere 75,784 tons.

The exports to India in fact have been onconstant decline ever since the two countriesopened their borders for liberal bilateral trade.

“The decline is not due to lack of cementdemand in India but because of very stringentnon tariff barriers erected by our neighbor,” hesaid adding Pakistan’s cement is preferred by

the Indians because of better quality.He said that India has not yet removed the

trade barriers it promised to Pakistani plan-ners on numerous occasions. The export of ce-ment to India is allowed through trucks andrail but the industry is unable to export asmuch as quantity due to trade barriers, laborshortages at Indian side of Wahga border andnon availability of Railways wagons.

Other barriers like delay in registration ofcement plants for granting export license stillexist, he added. He said exports to Afghanistanare also on decline due to slowing down of itseconomy. The cement exports to Afghanistanhe added declined by almost five percent dur-ing the first two months.

Cement industry dispatched 5.096 milliontons of cement against dispatches of 5.209 mil-lion tons during the corresponding months oflast fiscal year.

Local consumption declined from 3.664million tons in July-August 2011-12 to 3.641million tons in the same months of this fiscalregistering a decline of 0.61 percent. Exportsdeclined from 1.546 million tons to 1,455 mil-lion tons depicting a decrease of 5.87 percent.

Dubai Islamic Bank Pakistan andWestern Union – A-new partnership!

KARACHI: Dubai Islamic Bank Pakistan Limited (DIBPL), aleading Islamic Bank in Pakistan and Western Union (WU), aleader in money transfer and global payment services havelaunched a convenient remittance solution for sending money tofamilies living in Pakistan. DIBPL is now servicing Western Unioncustomers for inward remittances through its branches acrossPakistan. An inauguration ceremony was held in Karachi, whichwas attended by PRI Head Najam us Saqib, WU CEO Mr. HamidFarid and others. pRess ReleAse

EDT HP wins court ruling in Itanium LitigationKARACHI: HPQ -3.18% issued the following statement in re-sponse to proposed ruling in the ongoing litigation with Oraclerelating to the Intel(R) Itanium(R) platform: “The proposedruling is a tremendous win for HP and its customers. The Su-perior Court of the State of California, Santa Clara County, hasconfirmed the existence of a contract between HP and Oraclethat requires Oracle to port its software products to HP’s Ita-nium-based servers. We expect Oracle to comply with its con-tractual obligation as ordered by the Court.” pRess ReleAse

Engro Foundation celebrates unsungheroes of PakistanIslAMABAD: Engro Foundation, the CSR arm of Engro Cor-poration Limited, launched a digital competition to recognizethe efforts of Pakistani individuals and institutions that con-tinue to impact life for the under-privileged in the sphere ofeducation, health and livelihoods. The objective of the digi-tal competition is to honor the efforts of individuals and or-ganizations doing commendable social and humanitarianwork and learn about their best practices and innovative ap-proach towards the betterment of society. pRess ReleAse

ACCA students commenceprofessional careerslAHORe: Results from the ACCA (Association of CharteredCertified Accountants) examinations in June 2012 show thata record number of students have successfully completedtheir final exams. Candidates around the world took almost370,000 papers, with 7,160 students successfully complet-ing their final ACCA exams, representing a 13.4% increaseon last session. pRess ReleAse

CORPORATE CORNER

CEMENTING MISERY

HONG KONG

AFP

Asian markets were mixed but the euro roseTuesday as attention turns to a European Cen-tral Bank policy meeting later in the week, withdealers hoping for plans to restart a bond-buy-ing programme.

With US markets closed for the Labor Dayholiday on Monday and few catalysts, regionalinvestors took a wait-and-see approach with theECB meeting on Thursday as well as closelywatched US jobs figures due on Friday.

Tokyo, Hong Kong and Shanghai were flat,while Sydney eased 0.30 percent, and HongKong and Seoul was 0.10 percent higher.

Expectations rose that the ECB would an-nounce a new round of sovereign bond pur-chases after European lawmakers said the bank’shead, Mario Monti, had indicated such a move.

With struggling economies such as Spain,Italy and Portugal desperate for help to pushdown their borrowing costs Monti said any cen-tral bank intervention would include only shortand medium-term debt, the lawmakers said.

He said in a closed-door meeting that bond-buying in the past was justified to help stabiliseand protect the 17-nation eurozone, they added.

“The only question is whether or not it (theECB) will print more money between now andNovember,” Nicholas Smith, equity strategist atCLSA in Tokyo, told Dow Jones Newswires.

Draghi’s comment helped push the euro toa two-month high of $1.2618 Tuesday in Asia,compared with $1.2598 late Monday in Londontrade. It also fetched 98.93 yen, compared with98.68 yen. The dollar was at 78.40 yen against78.32 yen.

Investors brushed off data that showed eu-rozone manufacturing activity contracted for aseventh straight month in August.

A purchasing managers index survey ofthousands of eurozone manufacturers compiled

by research firm Markit came in at 45.1 in Au-gust. While it is up from 44.0 in July it stillshows the sector is deep in contraction.

Any score below 50 indicates shrinkage.Asian markets mostly rose on Monday on

hopes for fresh stimulus measures after figuresshowed manufacturing in giants China andIndia continued to weaken.

Also in traders’ sights was the release of jobsfigures out of the United States as they look forclues on the state of the world’s biggest economywith its recovery stuttering.

Another weak result would stoke expecta-tions for another round of bond-purchasing bythe Federal Reserve, or quantitative easing.

Oil prices rose, with New York’s main con-tract, light sweet crude for delivery in October,advancing 78 cents to $97.25 a barrel and BrentNorth Sea crude for October up 37 cents at$116.15. Gold was at $1,696.80 at 0245 GMTcompared with $1,688.65 on Monday.

Asian markets steady, euroup ahead of ECB meeting

Samsung Pakistan-Afghanistan Senior Manager, Mobile Phones Roy Chung presenting a onemillion cheque to famous pop singer QB on behalf of lucky winner Shahzad Aslam at theSamsung Eid Banao Smart lucky draw event.

KCCI President Mian Abrar Ahmad jointly cutting the ribbon along with Govt. of SindhSecretary Industries Zamir Ahmad Khan, Korangi Association of Trade and Industries, (KATI)Chairman Etheshamuddin to inaugurate 10th PLATIC & PACK Pakistan, 9th IFTECH food +beverage-Pakistan & 1st food + hospitality-2012, at Karachi Expo Centre on Tuesday.

Oil up in Asia

on China, Europe

stimulus hopesSINGAPORE

AFP

Crude rose in Asia on Tuesday as weakmanufacturing numbers from Europeand China boosted hopes of fresh centralbank stimulus measures, analysts said.New York’s main contract, light sweetcrude for delivery in October, advanced78 cents to $97.25 a barrel and BrentNorth Sea crude for October deliverygained 37 cents to $116.15. Traders werehoping that the bleak European andChinese manufacturing data would leadto more stimulus soon, said NickTrevethan, senior commodities strategistfor ANZ Research in Singapore.“Certainly the data of late I think hasbeen supportive of policy easing. China’sin particular do suggest something needsto be done there,” he told AFP.Chinese figures released Monday showedmanufacturing activity in the world’slargest energy consumer falling for atenth consecutive month to its lowestlevel in more than three years in August.The weak performance showed thatprevious stimulus measures enacted bythe government were insufficient andmore policy easing was needed, analystssaid. In Europe, survey data compiled bythe Markit research firm and releasedMonday showed eurozonemanufacturing activity contracting for aseventh month in a row in August, withthe fall sharper than initial forecasts. Thepurchasing managers index (PMI), asurvey of thousands of eurozonemanufacturers, came in at 45.1 inAugust, down from a flash estimate of45.3 Any score below the 50 markindicates contraction.

g Capacity utilization of cement industry dips to decade low

of 68pc g Demand in local, international market low during

first two months of FY13 g India’s stringent non-tariff barriers

decrease exports to India by 38pc g Exports to Afghanistan

also shrink due to economic slow down

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