Wednesday, 27 June, 2012

Page 02

As politicalconcerns ease,KSE bulls saycheese

KARACHI

ISMAIL DILAWAR

THE outgoing financial year2011-12 saw the country’sexternal account failing torepeat what the economicobservers said the sterling

performance of fiscal year 2010-11 andonce again turned red. FY11 had seenthe current account balance registeringa $ 542 million surplus against a deficitof $ 3.946 billion in FY10.

By end-June FY12, however, thecurrent account gap is expected to hoveraround 1.8 percent of the GDP with poorforeign inflows making it difficult for theeconomic mangers to finance this deficitthrough financial account.

Overall, the country’s dollar re-serves, peaking to all-time highof $ 18.3 billion in July 2011,are estimated to haveshrunk by $ 3.3 billion to$15.0 billion by themid of this monthJune and are ex-pected to fallfurther dueto mored e b t

servicing.For the weakening of country’s ex-

ternal account, the analysts cite unfa-vorable prices of commodities, tensePak-US relationship, reduced foreign in-flows and higher debt repayments asmajor attributing factors.

This, resultantly, pressured PakRupee that depreciated by 8.8 percentfrom Rs 86.1 to Rs 94.4 against the dol-lar in the inter-bank market duringFY12YTD. “This compares unfavorablywith FY11’s 1 percent depreciation and10 years average depreciation of 4 per-cent,” viewed Topline analyst Nauman

Khan.The currency

dealers in openmarket also see

sea-

s o n a lfactors like an-

nual Hajj ritual, whichevery year increases demand

for the greenback in the local money

market by $200-$300 million, respon-sible for “temporary” appreciation of theAmerican currency. “The current hike isa routine as last year too the dollar hadappreciated to Rs 93 and then camedown to Rs 88,” recalled Malik Bostan,chairman Exchange Companies Associ-ation of Pakistan.

Recent weeks saw the rupee devalu-ing to the lowest level of Rs 96.80against a dollar. However, on Monday itrecovered on the currency market andgained 10 paisa for buying and 95.80and 96.00 for selling.

The analysts, however, predict fur-ther pressure on the rupee in prospect.

“Pressure on the PKR is expected tocontinue in FY13 with further increasein the debt payment, including $ 2.2 bil-lion IMF debt repayment, uncertain

Pak-US relationship and reducedforeign flows,” Khan said.

On the flip side, the analystsaid, material-ization of Coali-tion SupportFund, PTCL’sprivatizationr e c e i p t s ,auction of3G licenseand sub-dued oilpr icescouldp r o -videt h e

m u c h -needed relief to the

rupee.“Our assessment suggests that

for every $10 per barrel decline in oilprices, annual oil import bill reduced by$1.2 billion,” he said.

A timely decision by Islamabad toresolve the lingering Nato supplies issueand a likely re-entering into the IMF

program are other factors, the analystsbelieve, would provide some respite therupee would be direly needing in FY13.

Inflation is another negative thatwas not let deflate by the cash-strappedgovernment’s massive bank borrowingsto finance the mounting fiscal deficit.

During FY12YTD up to June 8, thefunds-starved federal and provincialgovernments borrowed an additional Rs1.2 trillion from the banking system, ofwhich Rs 502 billion constitutes infla-tionary borrowing from the centralbank, approximately Rs 285 billion dur-ing January-MarchFY12.

This, having adverse implications onthe interest rates particularly in the sec-ond half of FY12, made the central bankhalt further easing of the monetary pol-icy from the current 12 percent.

Coupled with government’s bankborrowings, weakness in the external ac-count also negatively impacted domesticliquidity position, especially during thesecond half, January-JuneFY12, whenthe budget deficit was largely financedthrough local channels.

During 1H, the State Bank had cutthe discount rate by 200 basis pointsstaggered in two stages, while main-tained the same in the 2H as pressure onthe rupee and liquidity re-emerged.

As a result the benchmark 6-monthT-Bill yield, which fell to lowest level of11.5 percent in January 2012 from 13.7percent at the beginning of FY12, recov-ered to 11.93 percent at end-June.

“There seems little room for furthercut in the policy rate but could see around of rate hikes if the liquidity issueis not resolved,” said Khan who seesmore pressure on country’s external ac-count owing to traction in oil prices,strained Pak-US ties and above expecta-tion contraction in foreign flows. “TheCA deficit is expected to hover around1.8 percent of GDP in FY12 against thegovernment’s target of 0.6 percent andSBP’s 1.5-2.5 percent,” the analyst said.

ISLAMABAD

AMER SIAL

Noting that the foreign direct investment inthe country has reduced significantly duringthe current fiscal year, Chairman IntellectualProterty Rights (IPO) Pakistan has stressedthe need for enhancing the law enforcementagainst piracy and infringement of Intellec-tual Porperty Rights (IPRs). He said thiswhile chairing a media consultative forum onIPRs under the European Union (EU)funded Trade Related Technical Assistance(TRTA-II) programme on Tuesday.

Showing concern that Pakistan was in-cluded in the priority watch list against IPRviolation for the last several years and therewas need to improve law enforcementagainst piracy and infringement by the lawenforcement agencies especially FIA andCustoms. “ Ministry of Interior has assuredus to hold an international conference to ap-prise the international community about thesteps against piracy of IPRs”, he added.

It is a fact that the countries which haveprotected IPRs have developed, as it givesmore confidence to investors and reducescapital flight, he said adding that the IPR or-diance has already given shape and enact-ment of the bill into an act was awaited fromthe parliament. He said establishment of IPRtribunals was proposed under the ordinanceto speedily decide IPR cases.

He said that the offices of IPO will be

soon opened in Balochistan and KyberPhatunkhwa and an electonic trademarkgeneral will be soon available online, to pro-mote registeration and protection of IPRs inthe country. Noting that if IPRs laws werestrictly implemented in the country then thelate eminent singer Medhi Hassan wouldhave no need to seek financial support fromanybody during his illness. The royalty of hisnumerous famous songs would have beenenough for him and his family. “We areworking on a collective management organ-ization to protect the IPRs of writers, singersand other artists”, he added.

Dr. Mansur Raza of World IntellectualProperty Orginazation (WIPO) said it is im-portant to inform businesses that IPRs pro-vide economic rights which result in benefitsfor over the years. He gave the example ofKorean music which was poplualr in all eastasian countries and resulting in economic re-turns, which was only achived by first imple-menting IPRs locally.

Promoting IPRs in the country will leadto flourishing of small companies by patent-ing technology. He said that unfortunatelyrank of Pakistan in global innovation list wasbelow Bangladesh.

Dr. Arshard of NUST said that his uni-versity was formulating a IPR policy with thehelp of IPO. And a technology incubationcenter is established at the university and 4companies have graduated while 19 otherwere still in incubation.

Cue Chinese Biryani

g China’s discovered geneboosts Pak Basmatirice yield 14 percent

BEIJING

APP

A research carried out by Chinese scientistsrevealed that it could help increase the pro-duction of Pakistan’s flagship Basmati riceto 14 percent more without compromisingon its quality. While studying the Basmatirice from Pakistan that is world famous forits high quality, Fu Xiangdong at ChineseAcademy of Sciences and his colleaguesfound a gene named GW8 which could in-fluence the quality of rice, reported Xinhuanews agency.The Chinese researchers while identifyingthe key gene in rice stated that it could en-hance both quality and productivity of riceat the same time, as they reported in thejournal Nature Genetics on Sunday.The gene could improve shape and color ofrice grain, enhancing its quality of appear-ance. On the other hand, it could alsochange the arrangement of starch inside thegrain, enhancing its quality for eating.Further study showed that the GW8 genealso exists in some types of high yield ricegrown in China. However, it’s a differentvariant of that gene, whose major effect isnot on quality, but on the grain weight, thusenhancing the productivity of rice.

HDIP ousted! g From inspecting

CNG/LPG storage

ISLAMABAD

STAFF REPORT

The inter-ministerial wrangling over au-thority to carry out inspections of CNG/LPGcylinders, tanks and other storage devices ofpetroleum products has taken a new turn,as the Department of Explosives (DoE) ofMinistry of Industries has said the Hydro-carbon Development Institute of Pakistan(HDIP), which works under the Ministry ofPetroleum is not authorized to conduct in-spections.In a statement issued on Tuesday the DoEsaid that HDIP is not authorized to conductinspections of CNG/LPG Cylinders, tanksand other storage devices of petroleumproducts. HDIP is a testing laboratorywhich does not have expert inspectors forthe inspection of such storages devices.Therefore, HDIP is not authorized to in-spect and certify petroleum and gas stor-ages equipments and any such inspectionswill be considered as illegal, it said.

Exports rise playfully

g Export of sports goods up3 percent in current year

ISLAMABAD

APP

The exports of sports good from the countrywitnessed positive growth of 2.96 percentduring the first eleven months of the ongo-ing fiscal year against the exports of sameperiod of last year. The exports of sportsgood were recorded at US$302.206 millionduring July-May (2011-12) as compared tothe exports of US$293.525 million duringJuly-May (2010-11), according to the data ofPakistan Bureau of Statistics (PBS).Among the sports good, the major increaseof 9.82 percent was recorded in the exportsof footballs, as it grew from US$128.448million last year to US$141.056 million dur-ing the ongoing year.However, the exports of sports gloves de-creased by 7.06 percent during the periodunder review, the PBS data revealed. Theexports of gloves stood at US$101.016 mil-lion during 2011-12 against the exports ofUS$108.687 million in 2010-11.The exports of other sports goods also in-creased by 6.64 percent by going up fromUS$56.390 million last year to US$60.134million during the ongoing fiscal year.

Legends of the fallg Banking spreads fall by 15bps in MayFY12

KARACHI

STAFF REPORT

The banking spreads of the country’s banking sector during the month ofMay decreased by 15 basis points Month-on-Month to 7.07 percent from7.22 percent of the previous month. The banking spreads is the differencebetween banks’ lending and deposit rates. However, on YoY basis, consid-erable decline of 58bps was witnessed in the banking spreads comparedto spread of 7.65 percent in May FY2011, said the analysts at InvestCapquoting the State Bank figures. The average interest rate spread during5MCY12 (Jan-May) stood at 7.25 percent as compared to 7.57 percent inthe same period last year, showing a decline of 32bpsYoY. Furthermore,the spreads based on gross disbursement and fresh deposit appreciatedby 52bpsCYTD to 6.7 percent in May-12 from 6.2 percent in Dec-11.The weighted average deposit rates on outstanding deposits includingzero percent markup increased by 12bpsMoM to 5.88 percent duringMay-12 compared to deposit rate of 5.76 percent last month. On CY12TDbasis, the rate on outstanding deposit remained flat at 5.88 percent. High-est deposit rate witnessed in Public sector funds which stood at 6.10 per-cent (declined 4bpsMoM) followed by deposit rate on private sector fundswhich stood at 5.84 percent (up 16bpsMoM).Yields on outstanding loans including 0 percent markup fell by 3bpsMoMto 12.95 percent during May-12 compared to 12.98 percent witnessed lastmonth. While during CY12TD the rate on outstanding loans fell by 51bpscompared to 13.46 percent of Dec-11 rate. Highest lending rates witnessedin Public sector loans which stood at 13.53 percent (declined slightly by1bpMoM) followed by lending rate on public sector loans which stood at12.98 percent (declined by 4bpsMoM).However, the 6M KIBOR, which is the benchmark for almost 80 percentlending to private sector hovered in very low range of 11.95 percent to12.0 percent during the last five months or so, therefore the spread onfresh lending are on consistent downward trajectory largely after thedownward adjustment in lending rates.On the other hand, stagnant deposit rate is the result of the slower inflowof funds into the banking system that made deposit mobilization taskharder resulting into the fall in raising the rate of deposits.

Oops!

Boom Boom Afridi!g Hameedullah Jan Afridi launches a blitzkrieg againstinfringement of IPRs and stepped down the pitch towallop piracy out of the ballpark

g FY12 to see huge falls in C/A, rupee value, dollar reserves, t-bill yieldg The ‘sterling’ performance of FY11 shall not be repeated, much to the horror of economic observers

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REG RAG: NATO SUPPY RESUMPTION & RAJA

02Wednesday, 27 June, 2012

Bank holiday

KARACHI: The State Bank of Pakistan (SBP) andall offices of SBP Banking Services Corporation, in-clusive of Public Debt Offices, will remain closedfor public dealing on Monday the 2nd July 2012,which has been declared as a Bank Holiday. Allbanks and DFIs shall, therefore, remain closed forpublic dealing on the above mentioned date. How-ever, all officers/staff of SBP, SBP BSC, Banks/DFIs/ MFBs will attend the office as usual. STAFF RE-

PORT

Qubee committed to customer service

KARACHI: Chief Executive of Qubee Pakistan,Jamal Nasir Khan said Qubee has become a keyplayer in the wireless broadband category in veryshort span of time, as they have been striving hard toprovide their subscribers the best value for money inthe form of fast and reliable broadband internet with24/7 customer support. He further said they have al-ready set new trends in the country by providing bestinternet services to the subscribers through matchlesspackages and easy solutions to payments, whileQubee-Go Green initiative has limited impact on theenvironment with the halt on sending printed bills tothe customers.

LG launches record breaking 2012 Cinema 3D Smart TV series

KARACHI: LG Electronics (LG) , a global leader andtechnology innovator in consumer electronics, an-nounced the launch of its latest 2012 Cinema 3D SmartTV line-up in Pakistan. Unveiling the new product lineat a grand event, LG revealed the cutting-edge 3D bezelTV that is sized at almost zero mm, setting a new worldrecord for the narrowest bezel 3D TV. The LG Cinema

3D Smart TV, being equipped with the most advanced3D technology, enables a smoother and more immer-sive 3D viewing bringing a limitless world of 3D enter-tainment at the tip of your magic remote.

PMEX announces agreement

with Catalyst IT Solutions

LAHORE: Pakistan Mercantile Exchange (PMEX),the first technology-driven, web-based, de-mutu-alised Commodity Exchange in Pakistan, recentlysigned an agreement with Catalyst IT Solutions toprovide them with a technology platform wherebyPMEX brokerage houses will be able to offer multiasset/multi exchange online trading platforms, mo-bile trading platforms and SMS alert services totheir clients.

Greenvalley Premium Supermarket

Coming Soon in Bahria Town, Rawalpindi

RAWALPINDI: After the successful launch ofGreenvalley Premium Supermarket in Lahore’s highstreet shopping destination, Bahria Town is all setto initiate the works on Greenvalley in Rawalpindi.The project will be located at the strategic locationin Intellectual Village, Bahria Town.

ISLAMABAD: Federal Minister for Communications Dr Arbab

Alamgir visited Ghazi interchange on M-1 to see progress of work.

PTCL’s 3G EVO becomes a Wi-Fi hotspot

ISLAMABAD: Pakistan Telecommunication Com-pany Limited (PTCL) has made an exciting intro-duction of 3G enabled Tenda router driven byPakistan’s fastest 3G EVO Wireless Broadband thatcreates a powerful Wi-Fi hotspot for its customersvirtually anywhere. Tenda router is a portable 3GWi-Fi router that converts EVO and Nitro donglesinto a powerful Wi-Fi hotspot so that customers canhave Internet connectivity for multiple users andmultiple Wi-Fi devices at the same time.

KARACHI: Group picture shows the 32 most outstanding

players of the ‘ZONG UNITED KICKOFF’ Football Tournament

along with the MU legend, Dion Dublin (Centre) and

coaches/project coordinators at a weeklong training session

in Manchester United Soccer School (MUSS) in Abu Dhabi

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVER

Unilever Food 2714.00 2825.00 2714.00 2825.00 111.00 10Rafhan Maize Prod. 2861.19 3004.24 2860.00 2932.67 71.48 41Colgate Palmolive 948.08 965.00 960.00 961.02 12.94 211Nestle Pakistan Ltd. 3995.01 4024.80 3851.00 4002.21 7.20 66Philip Morris Pak. 177.48 186.29 179.00 183.40 5.92 39,838

Major Losers

Exide (PAK) 188.27 184.20 178.86 178.97 -9.30 72,353Sanofi-Aventis Pak 180.99 174.00 173.00 173.07 -7.92 150Siemens Pakistan 726.57 725.00 700.00 721.20 -5.37 35Pak.Int.Cont SD 146.00 147.99 138.71 142.05 -3.95 223Biafo Industries 56.10 56.10 53.65 53.65 -2.45 550

Volume Leaders

D.G.K.Cement 39.18 39.75 38.60 39.17 -0.01 7,225,864Hub Power Company 41.54 41.65 41.30 41.51 -0.03 3,901,659Pak Reinsurance 17.74 18.40 17.50 17.65 -0.09 3,679,205Bank Al-Falah 17.01 17.37 17.05 17.30 0.29 3,357,225Jah.Sidd. Co. 12.98 13.08 12.52 12.59 -0.39 2,760,719

Interbank RatesUS Dollar 94.5082UK Pound 147.5557Japanese Yen 1.1913Euro 117.9949

Dollar EastBUY SELL

US Dollar 95.00 95.75Euro 117.27 118.33Great Britain Pound 146.83 148.13Japanese Yen 1.1813 1.1916Canadian Dollar 91.23 92.54Hong Kong Dollar 12.05 12.21UAE Dirham 25.70 25.90Saudi Riyal 25.19 25.37Australian Dollar 94.00 96.29

Business

KARACHI

STAFF REPORT

ON Tuesday the bulls kept dominat-ing Karachi stocks market with thebenchmark, KSE 100-share indexgaining 13.84 points. AhsanMehanti, Director at Arif Habib

Investments Limited, said that the Pakistan stocksclosed higher amid thin trade on easing politicalconcerns after designation of Deputy PM andhopes for improvement in Pak-US ties on resump-tion of Nato supply routes.

The day saw the index closing up by 0.10 per-cent at 13, 656.04 points against 13, 642.20 pointsof first working day of the week. The trading vol-umes at the ready-counter were recorded higher57.989 million shares against 56.825 millionshares of the previous day. The trading value wasup to Rs 2.005 billion compared to Rs 1.863 billionof the previous session. The intraday high and low,respectively, stood at 13, 707.21 and 13, 587.97points. He added that the institutional support inblue-chip stocks across the board ahead of year endclose played a catalyst role in bullish sentimentsdespite concerns for security situation in the city

and uncertainty in global stocks and commoditieson prevailing euro-zone debt crises.

The market capitalization grew modestly andincreased to Rs 3.484 trillion from Rs 3.482 trilliona day earlier. Of the total 353 traded scrips, 105gained, 163 lost and 85 finished as unchanged. Thefree-float KSE-30 index also gained 4.86 points toclose at 11, 779.67 points against the previous 11,774.81 points. The KSE all-share index closed witha gained of 6.72 points to 9,615.66 points as against9, 608.94 points.

D.G.K. Cement was the day’s volume leadercounting its traded shares at 7.225 million with theopening and closing rates standing at Rs 39.18 andRs 39.17, followed by Hub Power Company, PakReinsurance, Bank Al-Falah and Jahangir SiddiquiCompany with turnover of 3.901 million, 3.679million, 3.357 million and 2.760 million shares re-spectively. On the future market, the turnover re-covered remarkably by over 9 million shares to21.391 million against 12.359 million shares ofMonday. The Unilever Food and Rafhan MaizeProd, up Rs 111.00 and Rs 71.48, led highest pricegainers while, Exide (Pakistan) and Sanofi-AventisPakistan, down Rs 9.30 and Rs 7.92 respectively,led the losers.

As political concerns ease,KSE bulls say cheeseg Bulls manage to squeeze past the bears, thanks to a gamut of

optimistic happenings in the recent past. Index gains 14 points fittingly

Eurozone finance

ministers head for Paris

PARIS

AGENCIES

The finance ministers of Germany,France, Italy and Spain will meet inParis for talks on Tuesday evening,ahead of a crucial European Unionsummit at the end of the week,French Finance Minister PierreMoscovici said. “We want to workwith Germany,” Moscovici toldFrance Info radio, asked about thepressure on President Francois Hol-lande and German Chancellor AngelaMerkel to reach an agreement onways to curb the spiralling euro zonecrisis. “Tomorrow there is a meeting,which will be very important, betweenFrancois Hollande and Angela Merkeland this evening I will receive the fi-nance ministers: Mr. Schaeuble fromGermany, Mr. Monti or Mr. Grilli ofItaly and Mr. de Guindos of Spainalong with the European Commis-sioner,” Moscovici said.

LSE loses 9.64 points

LAHORE

APP

Bearish trend prevailed in LahoreStock Exchange on Tuesday as it shed9.64 points, following the LSE-25index opened with 3437.48 and closedat 3427.84 points.The market’s overall situation, how-ever, corresponded to an upwardtrend as it remained at 1.459 millionshares to close against previousturnover of 719,209 shares, showingan upward move of 740,647 shares.While, out of the total 87 active scrips14 moved up, 51 remained equal and22 shed values.

Obama urges Greece to work

closely with EU, IMF, ECB

WASHINGTON

AGENCIES

U.S. President Barack Obama spokewith newly elected Greek Prime Min-ister Antonis Samaras on Monday andurged him to work closely with theEuropean Union and other bodies ashe pursues economic reforms, theWhite House said.

Spain banks’ ratings cut asCyprus asks for bailoutMADRID: Spain suffered a fresh blow as 28 of its banks were hitwith credit downgrades while Cyprus became the latest eurozonecountry to request a rescue loan, days ahead of a pivotal EuropeanUnion summit. The Moody’s decision to slash the Spanish lenders’ratings came just hours after Madrid made a formal request for cashto bail out its troubled banking sector. The agency said it slashed theratings because they faced rising losses from commercial real estateloans, adding that Madrid’s own lowered credit grade was a contrib-utory factor. Spain’s lower creditworthiness “not only affects thegovernment’s ability to support the banks, but also weighs onbanks’ stand-alone credit profiles”, the agency said. AGENCIES

CORPORATE CORNER SECP introduces ICRS system

KARACHI

STAFF REPORT

To streamline the submission of regula-tory information required by the Securi-ties and Exchange Commission ofPakistan under the Insurance Ordinance,2000 and other relevant laws, the Com-mission has introduced an online regula-tory returns submission system, namelythe Insurance Companies Return Sub-mission (ICRS) system, which is beingimplemented from July 1, 2012 for lifeand non-life insurance companies.Recently, orientation workshops wereconducted by the Commission at Karachiand Islamabad. The details of ICRS sys-tem and its user manual are also avail-able at the official website

Standard Chartered to

launch trade centres

KARACHI

STAFF REPORT

Standard Chartered Bank announced thelaunch of Trade Centres for its Small andMedium Enterprise (SME) customers inPakistan.The launch comes at a time when thebank is stepping up to provide best inclass financial services to SME customersin the country.The trade sector of Pakistan will benefitfrom the bank’s customer focus and di-versification approach as 30 Trade Cen-tres will be distributed amidst StandardChartered’s 132 branches, across 29cities in Pakistan.

TOKYO

AGENCIES

Asian shares were caught in choppy trade onTuesday as investors remained cautious aheadof a European leaders summit which many be-lieve will not produce any substantive measuresto solve the region’s protracted debt crisis, nowin its third year.

MSCI’s broadest index of Asia-Pacific sharesoutside Japan inched up as much as 0.2 percentand slid as low as 0.1 percent. Japan’s Nikkei av-erage fell 0.5 percent to a one-week low. “Sen-timent is not one-sidely bearish, as low volatilityin some local equities markets suggests relativestability, but the choppy trade reflects extremecaution before the European summit,” said Hi-

rokazu Yuihama, a senior strategist at Daiwa Se-curities in Tokyo. “Investors want to see whatdirection the summit’s outcome will point to.It’s very unclear what specific agreements mayactually be made, there could be compromiseson forward-looking measures, so investors can’tbe entirely pessimistic,” he said. The euro edgedup 0.2 percent at $1.2523, off a two-week low of$1.24713 hit on Monday when growing concernover the June 28-29 EU summit sent risk assetsand the single currency sinking, while pushingup Italian and Spanish debt yields as contagionrisks weighed on investor sentiment. The two-day summit in Brussels will be the 20th time EUleaders have met to try to resolve a crisis thathas spread across Europe since it began inGreece in early 2010.

Shares in choppy tradeover EU summit scepticism

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