Pages: 7 profit.com.pk Tuesday, 10 January, 2012

Prospects for theairline industry in

2012 Page 4-5

Profiteers bagRs400-450 per urea

bag sale Page 7

Nashpa-2 production commencesKARACHI

STAFF REPORT

ACCORDInG to theweekly numbers re-leased by PPIS for theweek ending on Decem-ber 27, 2011, production

from nashpa-2 has commencedthereby taking the cumulative oil pro-duction from the block including thethree wells of Mela to 15kbpd. Al-though, production for 1HFY12 re-mained dismal, tie-in of nearcompletion projects could boost theproduction during 2HFY12.

According to the guidance pro-vided by the management, OGDC con-tinues to face delay in completion ofprojects on account of floods occurredearlier during FY12 and liquiditysqueeze from circular debt. Phase-I ofKP-TAY is expected to be commis-sioned by mid-January 2012 after com-pletion of work by SSGC on the 30kmtransportation pipeline. Accordingly,

various projects including Dakhni ex-pansion and Sinjhoro developmentprojects have also faced delay which wehave already incorporated into ourearnings and fair value estimates, saidSalman Vidhani at HMFS.

The spare capacity in nashpa block(OGDC Stake: 56.5 per cent) ensuredfast track tie-in of appraisal wellnashpa-2 which has added 5000bpd ofoil and 13 mmcfd of gas. However, asuccessful effort at appraisal wellnashpa-3, which is near completion,would require OGDC to enhance capac-ity at nashpa processing facility toutilise the flow from the well.

OGDC would enhance the capacityfurther by 5,000bpd to 15,000bps byinstalling 3rd Separation Battery toutilise the flows from nashpa-3, whichwe have assumed at 3,000b/d of oil and10mmcf/d of gas, he added. Further-more, currently storage capacity atnashpa field is 60,000 barrels which isexpected to be further raised to approx-imately 100,000 barrels.

Well head gas prices are expectedto witness another jump of four percent to nine per cent for 2HFY12 owingto four per centH/H rise in interna-tional crude oil prices on and deprecia-tion of Pakistani rupee against thegreenback fetching 4.64 per cent H/H.Although formal notification forQadirpur gas price agreement of re-vised discount table is still beingawaited, OGDC continues to reap ben-efits from adverse exchange rate move-ment whilst field contributes 30 percent to the natural gas segment sales.Furthermore we flag tie-in of Makorieast-1, completion of KP-TAY phase-1and Dakhni expansion project as keytriggers for 2HFY12.

The scrip has come off by 16percent since the high of Rs159.41 pershare on FYTD and has underper-formed the benchmark KSE-100index by 12 per cent on a 52-weekrolling basis. Consequently, its weightin the index has shrunk to 22.2 percent, albeit remains a source of track-

ing risk. Imminent stress on externalaccounts and precipitous decline invalue of local currency has causeddownward pressure on the stock inrecent days, as foreign investors hold-ing of OGDC exceeds 70 per cent(440mn shares) of the free float. Eventhough, systematic risk casts concern,strong fundamentals driven by stableinternational oil price, USD indexrevenue stream and line-up of proj-ects are likely to foster the bottom-line ahead. Therefore, a shrewdinvestor’s boldness amidst presentoverplayed pessimism could garnerattractive return relative to indexonce the dust is settled for the stock.

He said, “We have conservativelyestimated our earnings forecast at along term oil price assumption of$95/b, which is a significant discountto FYTD Arabian gulf light oil prices of$110/b. We estimate OGDC to post anEPS of Rs18.24 along with full year DPSof Rs8.0 for FY12 on our base case as-sumption, he added.

ISLAMABAD

STAFF REPORT

A LL nine of the government-owned power distributioncompanies (DISCOs) signed

agreements with US on Monday for$60 million assistance toimplement the second phase ofPower Distribution ImprovementProgram (PDIP) that will helpimprove energy supply toconsumers. Under the signedagreements, US will help DISCOsto generate more revenue to payfor energy production, reducelosses in power distribution fromthe producer to the consumer, andmake the power supply morereliable. Speaking on the occasion,Director of United States Agencyfor International Development(USAID) Energy Office, JohnMorgan said, “By improvingcollection of energy bills, DISCOswill have more money to pay forpower generation, thus reducingload-shedding in the country”.USAID financed three-year PDIPwas initiated in September 2010.The first phase started with the in-depth operational audits of eachDISCOs to establish baselineinformation that could be used tomeasure improvement inperformance over time. The auditscovered governance, operational,financial, human resources,communications and customerservice areas and surfacedopportunities for fundamentalimprovement in all areas. Secondphase focuses on implementingspecific performance improvementaction plans at each DISCO, to fullyempower them over operationalcontrol of its business systems,expansion planning, investmentprioritisation, human resourcemanagement, andcommercialisation of electricservice. The action plan will reduce

theft, improve commercial controlof operations, and reduce technicaland non-technical losses.Theprogramme focuses on improvinggovernance without which powertheft cannot be curbed. Theftcontrol requires improved datamanagement, including ensuringthat all consumers are formallyregistered, metered and billed. Anefficient commercial managementwould be established to ensurerevenue recovery. While advancedmetering technologies will beintroduced like automated meterreading and prepayment meters.Implementation of EnterpriseResource Planning (ERP) systemwill be made mandatory toimprove revenue enhancement.USAID will help DISCOsmodernise equipment, provideexpert consultations, and supportthe introduction of variousinternational best practices toensure a more reliable supply ofpower to consumers. In additionto improved energy distribution,USAID is also helpinggovernment in restoring andincreasing its energy productioncapacity, and to introduce long-term energy sector reforms.

LPG associationrejects allegationsof corruption

LAHORE

PRESS RELEASE

LPG Association of Pakistan hasstrongly rejected allegations thatLPG companies have pocketed

billions of rupees as reported in a storypublished by Profit on the 5th ofJanuary, 2012. Commenting on thestory, Belal Jabbar, spokesman for LPGAssociation of Pakistan, termed thecomments made by Irfan Khokar, theself-proclaimed Chairman of LPGDistributors Association, as blatantlyinaccurate. “LPG prices have reachedhistoric highs of Rs92,133 per tonne,due to the government’s policy oflinking local LPG production prices withSaudi Aramco Contract Price whichjumped up by $87 per tonne, and notbecause of an arbitrary increase in priceby companies,” said Belal. Bilal furtheradded LPG companies retail theirproduct in accordance with the marginsmandated by OGRA. However, it isunfortunate that there is no control onprofiteering by LPG distributors. LPGAssociation of Pakistan has repeatedlyasked OGRA to bring the distributorsinto a regulatory ambit and hold themaccountable for black marketing of LPG.OGRA is yet to begin the process ofregistering them, despite givingassurances to LPG companies that itwould. “It is very important for thepublic to know that the government ofPakistan produces 70 per cent of thecountry’s LPG production. It is thelargest producer of LPG in the countrythrough its holdings in OGDCL, PARCOand PPL, and is the most direct andimmediate beneficiary of a price hike. Itis very unfortunate that people havingzero stakes in LPG business are allowedto make false statements andmisrepresent facts for their owngain,” said Belal. Belal also said thatLPG prices would have been Rs200per kilo today, had the Lahore HighCourt not issued a stay on LPG Policy2011, which sought to impose a levyon local production and equate itsprice with imports.

Nine power firms, USAIDsign electricity supply pact

Under thesigned agreements,US will help DISCOs

to generate morerevenue to pay forenergy production

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news

Tuesday, 10 January, 2012

02

CORPORATE CORNERNIT electronically transformsits services for unit holdersKARACHI: national Investment Trust (nIT),Pakistan’s first and largest asset managementcompany, has electronically transformed its servicesusing modern technological techniques to facilitateunit holders. With the introduction of latest technologyfor transaction, nIT is now set to redefine the mutualfunds market as well as better serve its valued investorsand customers. nIT has introduced new ATM cards forits unit holders all across the country which will enablecustomers to withdraw cash against instant redemptionand dividends of their nIT units. PRESS RELEASE

Mobilink’s 5th Club Indigo GolfInvitational gets positive endorsement LAHORE: Mobilink inaugurated the 5th annual ClubIndigo Golf Invitational, with the first leg of thetournament organised at the Karachi Golf Club. Theone day tourney in Karachi attracted over 100 amateurgolfers, representing a diverse segment of Karachi’scorporate and business sector, making for a wellcompeted event, providing healthy entertainment andpromoting golf in Pakistan. Similar tournaments willbe held for Club Indigo members in Lahore andIslamabad over the coming weeks. PRESS RELEASE

Al Baraka Bank deploysZRG Contact Center SolutionKARACHI: Al Baraka Bank, Pakistan has deployedOneView Contact Center Solution by ZRG to deliverefficient services and enhance customer experience byoffering convenience and flexibility to all customers.Chief Executive Officer of Al Baraka Bank (Pakistan)Limited, Mr Shafqaat Ahmed said, “Our bank willcontinue to invest in latest technologies and optimise theutilisation of resources in order to bring high quality andvalue-added services to our customers.” PRESS RELEASE

PTCL launches Pakistan’sfirst 3G Android Smartphone ISLAMABAD: Pakistan Telecommunication CompanyLimited (PTCL) has launched Pakistan’s first 3Genabled Android Smartphone IVIO Icon Pro that offersdual support for both EVDO and GSM/CDMA network.Based on Android 2.2 Froyo and powered by a 600MHz Qualcomm processor, Smartphone IVIO Icon Prois yet another first of its kind product introduced byPTCL in Pakistan’s handsets market. It lets its userssurf and talk simultaneously while on-the-move andthat too at 3G speeds of up to 3.1 Mbps. PRESS RELEASE

TES showcases internetand data products at ICT GlobalLAHORE: TES (Transworld Enterprise Services) andits exhibited products were positively received by theconference delegates at the thematic exhibition of ICTGlobal, being held from January 7-9th, 2012 at theLahore International Expo Center. TES, a whollyowned subsidiary of Transworld, is providingspecialised enterprise services of Transworld to majorenterprise customers of Pakistan. PRESS RELEASE

Success story of a luckyDecember for cement sector KARACHI: As per the data released by All PakistanCement Manufacturers Association (APCMA) of thecement monthly sales for 1HFY12, total industrydispatches witnessed a rise of 4 per cent YoY to 15.41mtonnes in 1HFY12 as against total dispatches of 14.78mtonnes in the corresponding period last year. As far asthe monthly performance of cement industry isconcerned, local dispatches in December’11 posted asubstantial rise of 24 per cent MoM to 2.04m tonnesversus local dispatches of 1.65m tonnes recorded in themonth of november’11. PRESS RELEASE

Ufone introduces roaming buckets for USALAHORE: Ufone is prepared to take internationalroaming to a new level with affordable costs andconvenience of connectivity. While visiting USA, Ufoneprepaid connection now offers unique buckets for roamers.Customers can get 30 incoming minutes for $2 or 130incoming minutes bucket for $5 on T Mobile network. Thisphenomenal offer will encourage friends and family inPakistan to call roamers freely. The 130 minute bucket willexpire in 30 days and 30 minute bucket will expire in 3days. Subscription can be made by dialing *721*1# (for $2bucket) and *721*2# (for $5 bucket). For balance enquiry,roamers can dial *706#. PRESS RELEASE

Activity starved bourse loses 85 pointsKARACHI

STAFF REPORT

T HE bourse continued its dis-mal performance during thenew Year by further shedding

0.8% with low volumes of 21mshares. Investors chose to remainsidelined on the back off growingtensions between the judiciary andgovernment of Pakistan.

Energy heavyweights, PPL andOGDC, came under selling pres-sure as rumours of foreign sellingpersisted in the market. Evennews regarding FATIMA increas-ing its urea price in line withEnGRO could not generate any ex-citement, while FFC is expected tofollow suit. Triggers regarding thenRO case and a meeting betweenSECP and FBR regarding the cir-cular debt issue remain on the in-vestors’ mind. Market participantsalso awaits the news flow regard-

ing the circular debt issue.The activity at the bourse

floored with a mere 20m sharestraded during the day amidst un-certain political scenario and eco-nomic concerns fueling fear offoreign outflow. Yet again influen-tial index heavy stocks determinedthe direction of the index withinvolumes as index came tumbling tocritical 11k level. With government

at loggers head with army and judi-ciary, investors opted for a waitand watch strategy drying out vol-umes from the market. Oil and gassector stock resonated some opti-mism on the back of the news thatinter-corporate debt would betransferred to power holding com-pany once again. ‘We reiterate acautious stance with exposure inselect stocks as risk loom large,’

said Salman Vidhani at HMFS.The KSE 100 index closed at

11040.30 levels with the loss of85.05 points, while KSE 30 indexlost 41.39 points to close at10124.20 levels. All Share indexclosed at 7661.66 levels after los-ing 55.20 points. Total 70 scripsadvanced 112 declined and 120 re-main unchanged out of total 302scrips traded.

Science and Technology ministerdirects halal board development

LAHORE

STAFF REPORT

F EDERAL minister for sci-ence and technology (S&T)Mir Changez Khan Jamalisaid work on Pakistan HalalProduct Development

Board (PHPDB) would be expeditedand all bureaucratic hurdles will beremoved. He was speaking at LahoreChamber of Commerce and Industryhere on Monday. Federal ministersaid there were some technical is-sues that delayed the issuance ofnotification regarding establish-ment of PHPDB, but he had di-rected his additional secretary to sitdown with LCCI and sort out all is-sues coming in the way of establish-ment of PHPDB.

Jamali said allocation for sci-ence and technology sector wouldbe increased in the coming budgetand it would touch to one per centof GDP in 2015 to help the countryin joining the club of technologi-cally advanced nations.

He regretted that low allocations forvital sectors, like science and technol-

ogy, had kept the country dependent ondeveloped world despite the fact thatcountry had no dearth of resources. Theminister said innovation was a key toeconomic competitiveness. Researchinstitutions and researchers would haveto come forward to bridge the gap bydeveloping world-class technologies.

He said, “Science and technologyexhibitions provide a marketplace toshowcase S&T innovations, products,projects, services and solutions in dif-ferent industrial sectors. These exhibi-tions enable the industrial experts andresearchers from across the country toidentify joint objectives, activities andinitiatives and to place focus on indus-trial science and technology relatedproblems and their solutions as well aspromote S&T partnerships for globalsustainable development.

Speaking on the occasion, LCCIPresident Irfan Qaiser Sheikh saidthat to Lahore Chamber of Commerceand Industry, it was really very unfor-tunate that despite enormous humanand material resources, the Muslimworld was still counted as backwardsdue to lack of scientific and technolog-ical advancement. Similarly, Pakistan

has not been able to earn that statusin the world of S&T that it deserved.Pakistan had yet to be placed at somerespectable position in the innovationindex because of low end productionof cheap goods and inefficient energyconsumption ratio. In view of currentresource constraint, there is need toutilise existing resources optimallythrough reorganising R&D infra-structure and moving towardsknowledge economy to rectify thedismal situation. Irfan Qaiser Sheikhsaid that the country desperatelyneeds to work for stimulating andmanaging the flow of knowledge andtechnology amongst universities,R&D institutes towards the industry.“We must build human capital andinvest in science and technology toget parallel with rest of the world.”

While stressing the need for set-ting up of technology parks in Pak-istan, LCCI President said thattechnology parks in various countriesare doing great job in spreading fruitsof Science & Technology across theirrespective regions. But unfortu-nately, this idea could not gain muchpopularity in Pakistan. We still need

to make best use of this idea.Today, Pakistan is facing chal-

lenges of fast track national economicgrowth, poverty alleviation, betterquality of life and economic independ-ence. Even after more than six decadesof its creation, Pakistan still remains aproducer of primary commodities. Thefact is that unlike India, we have neg-lected the education sector for quite along time especially in the area of S&T.

LCCI president urged the federalminister to arrange greater share offunds in budget for advancement ofScience & Technology. Pakistan greatlyneeds to invest in science and technol-ogy to achieve the desired goals as sci-ence and technology is central to thedynamics of economic development it-self. He emphasised the need to con-duct modem scientific research,increase skill development and makeinnovation as integral part of techno-logical system of the country for thesake of strengthening the economy.

Former LCCI president Zafar IqbalChaudhry, LCCI executive committeemember Husnain Reza Mirza and for-mer EC member Haroon Shafique alsospoke on the occasion.

Summit Bank, NIT introduceco-branded ATM CardKARACHI: Summit Bank has partnered withnational Investment Trust (nIT) to bring anothergreat new service, which will definitely open newdoors of convenience for nIT customers who can haveeasy access to their cash round the clock. SummitBank and nIT, joined hands to offer nIT investorstheir new ATM card, “Summit Bank-nIT co-brandedATM card” through which they will be able towithdraw cash against instant redemption of theirnIT units using entire Summit Bank ATM network, orany 1-Link ATM network machines in Pakistan.Husain Lawai, President and CEO, Summit Bank,Zahir Esmail, Chief Operating Officer, Summit Bankand Anwar Lutfulfah, Group Head IT and Operations,Summit Bank, Wazir Ali Khoja, Chairman and MD,nIT; Manzoor Ahmed, Chief Operating Officer, SyedZubair Ahmad, Controller of Branches and ImranButt Head of IT and SA, attended the launchceremony of these ATM cards. Pioneering to offersuch a unique service, Summit Bank is committed tobe the preferred provider of financial products andservices to the markets. Summit Bank, in a very shortspan of time, expanded its network across the countryto 165 branches and built an infrastructure based onstate of the art Risk Management Framework as wellas a robust IT platform. JAVED MAHMOOD

ISLAMABAD: To safeguard investor’s interest,Securities and Exchange Commission of Pakistan(SECP) has penalised market participants fornon-compliance with the regulatory frameworkduring the month of December 2011. Astatement issued by SECP said, an order waspassed against Zafar Moti Capital Securities Ltdand member KSE, under Brokers and AgentsRegistration Rules, 2001 whereby, registrationof the said brokerage house was suspended for15 days for non-compliance with SECP’s earlierorders. A show cause notice was served to acommercial bank under Section 15E and to abrokerage house of KSE under Section 22 of theSecurities and Exchange Ordinance, 1969. Intwo separate instances, warning letters wereissued to two brokerage houses of KSE and twoindividual investors for execution of washtrades. Warning letters were also issued to twobrokers of KSE and LSE for execution of blanksales. Moreover, two warning letters wereissued to the directors of a listed company fornon-compliance with Section 224 (4) of theCompanies Ordinance 1984.The copies of allthe warning letters are available on SECP’swebsite. STAFF REPORT

KARACHI: Karachi Stock Exchange (KSE) hasdeveloped an electronic risk management systemthat would enable brokers to enjoy systematiccontrols and monitoring ability over their clients’trading activities. Developed on the recommendationof KSE’s Development and Trading AffairsCommittee, the Risk Management Gateway System(RMGS) is currently going through user’s acceptancetest and would be introduced in the exchange by the30th of this month. The new system would make thetrading system of brokers more efficient and helpthem improve their general compliance with trade-related rules and regulations. Under RMGS,members of the exchange are envisaged to be able toexercise control and check on their clients’ orders,permissible quantity and amount with reference totheir held margins or any other limit that may berequired for risk management system of brokeragehouses. Further, the system would enable themembers to have control over unintended “washsale” and would help identify “blank sale” and “shortsales”, including enforcement of client-wise symbolrestrictions and/or any other restriction thatmembers may require to be placed on any of theirspecific clients from risk management point of viewat order level. ISMAIL DILAWAR

SECP suspends ZafarMoti Capital Securities

RMGS to check unintendedshort selling at KSE

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FOR a poor country like Pakistan,which largely depends on imports,the fall of the rupee against the dol-lar produces multiplier effects in theeconomy. Increase in foreign debt

and domestic inflation, rise in import bill, in-terest rates hike and increase in costs of pro-duction are some major shocks that theeconomy has to absorb in the backdrop of de-preciation of the rupee in FY 12. The lowerthe vulnerability of the economy to absorb

these shocks thehigher the risk of fail-ure for the economy.

The recent slide inthe rupee to 91.30against the dollarleaves economic pun-dits and businesses indismay. The outlookfor 2012 remainsgloomy indeed. The

rupee was traded around Rs62.00/$ in April2008 and is trading around 91.30 in Jan 2012.Thus the currency has lost around 46 per centof its value in nearly 4-years.

The slide of rupee may be attributed to un-stable security situation in the country whichaccelerated the flight of capital and chokedforeign investments-two extremely importantsources which help provide a good base for for-eign reserves to hold ground. Also the inflowof foreign aid/loans to the country has re-mained intermittent. Add to this picture, re-payments the country has to make to the restof world, have risen too. When reserves arelimited, increasing foreign debt repaymentscoupled with rising import bill is making the

task even more difficult for the SBP. no doubt, whilst exports can benefit from

the depreciation of the currency, the domesticeconomy on the other hand stands much to loseif the vulnerability is weak. As the local currencyloses steam the cost of imports rises and if theseare largely based on necessities (energy and fooditems), which in practice face inelastic demand,it will further stoke inflation.

Their savings, if any exist, evaporate gradu-ally and the quality of life suffers and penuryrises fast. This is a never ending cycle and if theSBP’s intervention, to stabilise the currency, isnot timed well the economy might face perverseeffects. The country is unfortunately caught inthe same syndrome.

Foreign exchange reserves have already de-clined to $16.91b by Dec-end from a high of$18.31b on July 30, 2011. Besides regular importbill which might cross $37b mark in the FY 12,repayments of $1.2b to the IMF and total foreigndebt payment $ 4.2b are also due. The currentaccount deficit ballooned to $2.1b during July-nov 2011 as against $589million in July-nov2010. The economy in FY 12 might need extra$12-15b to service its Balance of Payment deficit.If export earnings and home remittances wereunable to generate much needed steam in FY 12,country’s reserves might come under extremetest and so might the currency.

The choice for Pakistani central bank thus getslimited to coddle the exchange rate in the backdropof narrow and ever drying streams of foreign cur-rency earnings and fast depleting reserves. Mo-mentary interventions (such as selling of dollar inthe open market and to banks) by the SBP couldpush the rupee slightly up but the long term move-ments of exchange rate will remain under pressureso long as outflows of dollar outpaced the inflows.Fast depleting reserves will force the SBP to risefrom the bed and do something. Alas. ‘stillness andcapitulation’ are perhaps the only options left withthe SBP to see helplessly the fall of the rupee touch-ing near 100 mark at the end of 2012.

The author is an Islamabad based freelancecontributor and Director SZABIST, Islamabad

campus. Views expresses herein are personal. Hecan be reached at asad.syedd@yahoo.com.au

HOW does it reflect on a presidingadministration that it promises a‘roadmap’ to tackle one of theeconomy’s most pressing issues,but only by the time of the gen-

eral election marking its term’s end? Despiteobvious implications, for the sake of bothhouseholds and industry, it is at least hopedthat this will not be one of those promises thatguarantee uninterrupted power every now andthen, only to be blatantly dishonoured. Andconsidering how power shortages have consis-tently intensified throughout the PPP admin-istration’s tenure, what is it about thisparticular promise, coming just when election-eering is picking pace?

Either it’s the cursed, seemingly insur-mountable problem of circular debt, or an ei-ther/or between domestic consumers andvalue-addition, export revenue earning in-dustry. Or it’s the perpetual squabbling be-tween the petroleum and finance ministries,the former pushing for fuel price reduction

to parity with CnG, the latter unrelenting.For some reason, Dr Sheikh’s boys just don’tbuy into the argument that with CnG andpetrol similarly priced, people will have ob-vious incentive to shift to black gold, easingnatural gas strain enough to divert to indus-try. That they push for CnG prices to bejacked up to fuel oil levels, for similar results,says a lot about the model of economics pur-sued at the finance ministry.

Strangely, it seems to have passed allrelevant ministries that forward planning ofall important commodities is based on thesimple, text book procedure of calculatingdemand and supply. The democraticallyelected government, reflecting the will ofthe people, was well aware of demandtrends and supply bottlenecks when it tookoffice. That precious little has been done toease the strain on limited supply, withpromises only now of some ‘roadmap’, thattoo when the government prepares to bowout, is just plain unsatisfactory.

PPP and gas load shedding

The fall of the rupeeagainst the dollarproduces multipliereffects in the economy

Can SBP arrestthe rupee fall?

Syed Asad Hussain

E D I T O R I A L

The road to redemption

NHA (national Highway Au-thority) isn’t exactly knownfor its imaginative spark orthe use of their neurons ofingenuity. However, if nHA

were to think out of the book – so tospeak – and stimulate their opportunis-tic senses, they would realise that a lumi-nous bundle of hope – one that couldinstigate their stalled projects – is vyingto penetrate inside their household;while the Authority slumbers on withtheir windows closed. The opportunity

that lies in the wait is of the completionof the remaining segments of the Motor-way, and sans the expenditure of evenhalf a penny – the sort of opening thateven their prognosticating catnap would-n’t have allowed them to dream of. now,economists tell us that with every oppor-tunity comes a certain opportunity cost,and the tradeoff for the Authority ismerely the act of hurrying up in gettingthemselves off their lazy backsides.

The current stand of the governmentto blockade nATO supplies and in turn thepreparation of conditions that the organi-sation must meet before the resumption ofsupplies has resulted in a fairytaleprospect for nHA. For over a decade,nATO and its troops have been using ourroad network for their supply toAfghanistan via Karachi to Khyber andChaman; and as a result have damaged alot of the roads. In fact, some of the afore-mentioned routes are bordering on wornout leftovers of gravels, rocks and asphalt.

And of course it goes without saying thatour dear nATO ‘friends’ weren’t generousenough to pay toll taxes for their relentlessroad deterioration enactments.

now, while the government mullsover its shopping list that it would wantUncle Sam to finance, nHA can alsothrow in a few items to add to the list –most notably the construction of the Mo-torway. The stalled project from Gwadarto Kandahar – one that is used for nATOsupplies and Afghan trade – should bethe obvious inclusion in the list. Andwhile we ostensibly have an upper handin this shopping list discussion, for whatit’s worth nHA can throw in a couple ofother motorway projects into the mix aswell. The remaining portion of the La-hore-Karachi Motorway – from Multanto Karachi – and another one fromGwadar to Ratto Dero – as a link to theLahore-Karchi motorway can also beadded to the demands.

While the list might make our uncle

think of us as spoiltbrats; one feels that wehave done enough todeserve this little treatat the tail-end of theholiday season. Thereis a multitude of rea-sons that might urgethe US to pull out its credit card. First ofall, by constructing all these projects theUS would be paying the compensation forthe damage that it has caused to our road-network, and also recompensing for thetoll taxes that were never paid.Afghanistan has also been using our roadscandidly, and of course US would have topay the arrears for that. And yes, it wouldalso be the much needed gesture of good-will from our dear uncle for the late no-vember disaster that he conjured up.Efficiency of road network would also aidthe US, because transport delays would becurbed. USAID should be asked to sign adeal with the government, and the former

could ask Americancontractors to do thejob and they could bepaid directly. TheAgency can discuss thematter with Washing-ton. Meanwhile, nHAcan use their funds –

with motorway construction taken care of– to ameliorate the national Highway andother problem areas in the country. Andof course with the new motorways up andrunning, the revenue generation wouldalso precipitously increase.

We have been at the receiving end ofskewed US policies, and barefaced in-gratitude from Washington. About timewe started constructing our road to re-demption, as the US prowls on its boule-vard of broken dreams.

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

khulduneshahid@gmail.com

Kunwar Khuldune Shahid

For comments, queries and contributions, write to:

Email: profit@pakistantoday.com.pk Ph: 042-36298305-10 fax: 042-36298302 website: www.pakistantoday.com.pk

BABUR SAGhIRCreative Head

hAMMAD RAZALayout Designer

ShAhAB JAfRyBusiness Editor

ALI RIZvINews Editor

MUNEEB EJAZLayout Designer

Yu e s d a y, 1 0 J a n u a r y, 2 0 1 2

Let’s constructhope while US lurkson its boulevard ofbroken dreams

KUNwAR KhULDUNE ShAhIDSub-Editor

MAhEEN SyEDSub-Editor

Optimistic about growth in PakistanThis is with regards to the article, ‘In search of business confidence’, published on07/01/12. Having well agreed with the article, I still feel optimistic about Pakistaneven though the country is facing regressive/stagnant growth; the root cause of allthe problems is shortage of energy and its high cost provision, because every activityis interconnected with it. Say for example, an increase in the fuel price will inflateeverything from Consumer Price Index (CPI) to cost of business. Although, ourcountry has an abundance of natural resources, but our authorities are least con-cerned for their productive utilisation and are just messed up with making populardecision to gain political mileage. Only the provision of cost effective energy can re-solve 90 per cent of the problems. On the brighter side, the law and order situationhas improved remarkably and we must applause it in terms of financing SBP, bytaking a relaxing monitory policy stance which is a good sign for the business com-munity. One thing is for sure that this country needs a paradigm shift.

FAISAL

LAHORE

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Tuesday,10 January,2012

04news

With its exceedingly important geographiclocation, a vast expatriate population segment, andextensive socio-economic relations across theworld, Pakistan surely presents some fabulousopportunities and potential for the airline industry

Etihad Airways Country Manager Amer Khan

Prospects for the airline i FARAKH SHAHzAD

AIR travel is a multi-billion industry thatis one of the most dynamic sectors inthe business world. It has always beentaken as a direct derivative of business

climate around the globe. The profits of commer-cial airlines define the state of health of economicand business activity in a particular part of theworld. The importance of international air travelwith regards to commerce cannot be underesti-mated, since it links business people across theworld, and is also a means of shipping cargo.

BATTLE of PRofITABILITyAirlines in the world are struggling hard to winthe battle of profitability in the business but thetime and climate appears to be against them.Since the last decade, the cost of flying aero planeshave literally ‘flown up’ due to rocketing fuelprices, post 9/11 security arrangements, global re-cession and political turmoil. Financially speak-ing, the airlines that continued to suffer heavylosses during 2011 are likely to continue landingand taking off at business-slippery runways dur-ing their flight operations of 2012.

INDUSTRy oUTLooK 2012IATA has revised its industry outlook for the year2012 that shows that profitability will be weakerthan 2011. “The biggest risk facing airline prof-itability over the next year is the economic turmoilthat would result from a failure of governments toresolve the Eurozone sovereign debt crisis. Suchan outcome could lead to losses of over $8 bil-lion—the largest since the 2008 financial crisis,”said Tony Tyler, IATA’s Director General and CEO.

The Eurozone crisis puts severe downside riskon the 2012 outlook as illustrated by the recentlypublished economic outlook. In a worst case sce-nario, should the Eurozone crisis evolve into afull-blown banking crises and European reces-sion, IATA estimates that the global aviation in-dustry could suffer losses exceeding $8 billion in2012. “The global forecast for 2011 is unchangedat $6.9 billion. But regional differences havewidened, reflecting the very different economicenvironments facing airlines in different parts ofthe world. And the overall margin of 1.2% tells youjust how difficult the battle for profitability in thisbusiness is,” said Tyler.

REGIoNAL PERfoRMANCEIn its sectorwise analysis of IATA, the global air-line industry is imminently having losses. How-

ever, Asia Pacific and Middle East regions will re-main profitable although the ratio is likely to fallas compared to 2011. north America is the onlyregion with improved profitability on thecards. African carriers are still ex-pected to break-even.

EURoPEEuropean carriers are by far in themost challenging position. Higher pas-senger taxes and weak home marketeconomies have limited profitability inEurope. The region’s carriers are fore-cast to generate a collective profit of just$1.0 billion, down from the previouslyforecast $1.4 billion. Low profitabilityhas been despite European airlines beingone of the fastest growing regions interms of traffic this year.

AMERICAnorth American carriers are in amuch more benign environment.They have seen yield and loadfactor improvements as a resultof tight capacity management,which has improved prof-itability to $2.0 billion (upfrom the previously fore-cast $1.5 billion). TheUS economy has alsogrown at a faster pacethan Europe. Thisgives the region thestrongest EBIT margin of 3.2%. none-the-less,the bankruptcy filing of American Airlines indi-cates that the region faces intense competitivechallenges as well.

In a similar pattern Latin American profitswill see a downgrade to $200 million (from thepreviously forecast $600 million). Performancehas been mixed across the region with much ofthe downgrade due to the impact of intense com-petition and falling load factors on Brazil’s do-mestic market.

ASIA PACIfICAsia Pacific carriers also saw stronger though var-ied trading conditions. Japan’s domestic marketstill has not fully recovered from the March earth-quake and tsunami, and load factors remainunder pressure. By contrast airlines have im-proved load factors and profitability on China’sexpanding domestic market. We have upgradedour forecast for the region by $800 million to a$3.3 billion profit. This is the largest absolute

profit among the regions.

MIDDLE EASTMiddle East carriers are expected to see profits of$400 million (down from the previously forecast$800 million) as high fuel costs squeezed profitmargins on the more price sensitive long-haultraffic connecting over Middle Eastern hubs.

AfRICAAfrican carriers are still expected to break-

even. new trade lanes with Asia are de-veloping and markets within the

continent are reflecting the im-provement in economic develop-

ment in many African

economies.However, competition

has been fierce and the region’sairlines have struggled to keep loadfactors at profitable levels.

CoST CUTTINGAfter decades of frenzied competition andstaggering losses, domestic airlines have takena more sober approach to the business of flying,with their first priority simply making money.And so the fancy fuselages and lively paint havegone the way of free meals, pillows and checkedbags. The color of choice these days is sensiblewhite. White does not fade as fast in the sun andrequires fewer touchups. And without the addedflash of color, less paint is needed, makingplanes lighter and saving fuel.

“There used to be romance in air travel,”said Steve Cone, a marketing expert whohelped create the first frequent-flier pro-grams. “The airlines were run by dream-ers, creative types and entrepreneurs.“They’ve been replaced by penny-pinch-ers who don’t think about the real estateoutside of the plane.” The staid designs re-flect the current state of the industry. Unlike intheir heyday in the 1970s, the airlines todayhave little reason to stand out.

TIME of RECKoNINGJoe Sherkey, an airline industry analyst wrote an

article titled ‘Airlines Are Re-trenching, and Alternatives Are Slim’. “The com-ing year will be a time of reckoning in businesstravel, as airlines reduce service at many airportsand prospects fade for practical alternatives to fly-ing, including the long-term promises of high-speed rail. Consider the new realities of air travel.Competition is decreasing, fares are rising andairlines are adjusting routes (and charging extrafees) in ruthless calculations to extract the great-est possible revenue per mile flown”, he wrote inthe article.

CAPACITy REDUCTIoN STRATEGyMichael Boyd, the president of the consulting com-pany Boyd Group International, sums up the phe-nomenon succinctly. “The cost of flying airplanesacross the sky has eclipsed the ability to support itat many communities,” he said in a recent forecast.In 2012, he predicts, airlines will accelerate themothballing of smaller 50-seat jets, the workhorsesfor connecting service between many midsize air-ports, and even some big ones. Many airlines willcontinue shrinking overall capacity and trimmingdomestic routes in 2012. During the first quarter ofthe new Year, American will “ground some planesand resize our network,” the company’s chief exec-

PDF Profit_Layout 1 1/10/2012 12:18 AM Page 4

05

Tuesday,10 January,2012

news

mAIntAInIng exCellenCe

Well, being named the world’s best airline

is one thing, but maintaining that title is

another. The product must continuously

be innovated; we cannot sit on our laurels

and expect to remain number one

AkBAR AL BAkERQatar Airways CEO

south AsIAn ProsPeCts

By 2021, travel and tourism is expected

to contribute more than $400 billion to

GDP in South East Asia. Moreover, Asia is

a growth area, and Asian airlines are

generally able to benefit from this growth

GOH CHOOn CEO Singapore Airlines

Customer sAvIngs

For the first time we are offering

unprecedented savings to our

customers. There has never been a

better time to experience the

award-winning service of Emirates

THIERRy AnTInORIEmirates Executive VP – Passenger Sales

PIA ProfItAbIlIty

It is expected that

with the approved business

plan for PIA, it would

be profitable in the

next five years

CHAuDHRy AHMAD MukHTAR PIA Chairman

industry in the year 2012utive, Thomas W. Horton, recently told employees.In addition, John P. Heimlich, the chief economistof the trade group Airlines for America, said, “Ca-pacity reduction is one of the steps the industry istaking to preserve profitability.”

KEy fACToRS of DowNGRADEDemand: Passenger demand is expected togrow by 4.0% (down from previously forecast4.6%), while cargo is expected to show flatgrowth (down from the previously forecast4.2% expansion).Yields: Passenger and cargo yields are ex-pected to remain flat in 2012. While this isunchanged for cargo, passenger yieldswere previously forecast to grow by 1.7%.Fuel: Fuel costs are relatively un-changed from the previous forecastat $198 billion. That is based on oilat $99 per barrel (against a previ-ous forecast of $100 per barrel).Revenues and Costs: Industryrevenues are expected to grow by3.7% to $618 billion. This will beoutstripped by cost increases of

4.5% to $609 bil-lion.

PAKISTAN’S NATIoNAL CARRIER

Amid the no-win situation prevailing in the indus-try, PIA’s failure to return to profitability is nosurprise. national flag carrier of the country, Pak-istan International Airlines (PIA), keeps bleedingheavy losses for the current fiscal year. The accu-mulative losses for the company have reached astaggering Rs. 100 billion as the airlines

keeps sinking towards a point of no return.In a recent meeting of the na-

tional AssemblyS t a n d -

ing Committee on Defence, it was revealed thatthe national flag carrier is leaking out heavy losseson continuous basis. The Committee was told thatPIA needs Rs 58 billion bailout package which in-cluded Rs 45 billion for debt services while Rs 13billion for immediate liabilities payment. Accord-ing to sources, the government has concluded thatthe prevailing crisis in the national carrier is be-cause of ‘mismanagement’ and ‘bad governance’and not financial shortcomings. The governmentturned down an Rs20 billion immediate bailoutpackage requested by the management to help itcome out of a ‘financial crisis’.

“The government does not have the capacity toprovide cash support. We can help them in loan re-structuring but they will have to meet performanceindicators,” Finance Secretary Dr Waqar MasoodKhan said. The most interesting contradiction inPIA as an organization is that it has an average man-power of 450 employees per aero plane as comparedto 225 in the other airlines. The recruitment crite-

rion is more political than professional and theemployees union is more powerful than

their bosses. The precedent of sacking ofits top official at the demand of theunion is ample evidence that this is aworkforce that has a de’facto authority tohire and fire its own boss.

KunwAR KHuLDunE SHAHID

WE have a vivacious civil aviationindustry in our neck of the woodsand it’s about time that wecapitalise on it. The task ahead

might seem daunting, but rest assured that itdoes not penetrate into the realms ofimpossibility. There are scores of fronts wherewe can enhance the industry; and if taken care ofmeticulously there is no reason why the effortswould not bear the desired fruits. The government should take up the mantle ofbeing the trailblazer, and lead the way. First up,a professional high level national committee oncivil aviation should be formulated, consisting ofrepresentatives from the airline industry, thegovernment, the regulatory body, supportindustries and of course the military. Thisshould be done along the lines of the EdwardsCommittee formed in the 70s in UnitedKingdom. And it goes without saying that aconnoisseur apropos aviation should be at thehelm of the committee.It should be made mandatory for theaforementioned committee to study the nationalAviation Policy and that of other developingcountries to ensure that the body is able tosermon a thorough and progressive policy thatcan be implemented after being rubberstampedby the Cabinet. The committee should also begiven a strong support cast to cover all thebases. The national interests should be at thetop of the pile of any priority list, and vestedinterests and intra-regional biases should beshunned. The policy that would be synthesized,once all the aforementioned points are takencare of, would be futuristic, progressive and intune with the modern technologies.The government, after taking all stakeholdersinto confidence should also revamp the CAA sothat its functions of economic regulation, safetyregulation and airport infrastructuredevelopment would be further bolstered. One

feels that there is a need of independentorganisations to concentrate their individualfocus on managing safety regulation, economicregulation and airport infrastructuredevelopment. The government should ascertainthe writ of the revamped CAA; and also thatviolators should be dealt with strongly. PIA should be asked to run on professional andcommercial lines in synchrony with the PIAC Act1955, and should become an active part of acompetitive market; and this of course can bedone – on PIA’s part – by the usage of latest

information technology and other means ofenhancing efficiency. It’s about time thegovernment stops bailing-out PIA. Lastly,accountability should also be channelised andinstitutionalised, and pointless mechanismsshould be purged out. Corruption – possibly thebiggest hindrance towards progress in anyfaçade in Pakistan – should be curtailed by astrict no-nonsense approach.

The writer is Sub-Editor, Profit. He can bereached at khulduneshahid@gmail.com

Establishing a progressive aviation sector

The Committee was told that PIA needs Rs58 billion bailout package which includedRs 45 billion for debt services while Rs 13billion for immediate liabilities payment.According to sources, the government hasconcluded that the prevailing crisis in thenational carrier is because of‘mismanagement’ and ‘bad governance’and not financial shortcomings

After decades of frenzied competition andstaggering losses, domestic airlines havetaken a more sober approach to thebusiness of flying, with their first prioritysimply making money. And so the fancyfuselages and lively paint have gone theway of free meals, pillows and checked bags

Infographics by Babur Saghir

PDF Profit_Layout 1 1/10/2012 12:18 AM Page 5

top 5 perForMers sector wiseSyMBoL oPEN hIGh Low CURRENT ChANGE voLUME SyMBoL oPEN hIGh Low CURRENT ChANGE voLUME

Food ProducersAdam Sugar 18.75 18.85 18.75 18.75 0.00 261AL-Noor Suger Mills 51.89 50.63 49.30 50.63 -1.26 10Chashma Sugar Mills 7.80 8.00 7.80 7.80 0.00 117Colony Sugar Mills 1.39 1.46 1.38 1.39 0.00 299Crescent Sugar 13.00 13.00 12.75 12.90 -0.10 859

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 Goods(Colony) Thal 1.95 1.16 1.15 1.15 -0.80 1,000AL-Azhar Textile 0.25 0.89 0.27 0.27 0.02 2,001Amtex Limited 1.32 1.40 1.30 1.31 -0.01 178,624Artistic Denim Mills 21.45 21.75 21.45 21.51 0.06 150,120Azam Textile 1.08 1.60 1.08 1.08 0.00 1

Future ContractsAHCL-JAN 27.68 27.95 27.35 27.70 0.02 48,500ATRL-JAN 109.56 110.88 109.11 109.56 0.00 132,500DGKC-JAN 19.86 19.95 19.71 19.80 -0.06 111,500ENGRO-JAN 96.46 96.25 95.36 95.53 -0.93 232,500FFBL-JAN 42.76 42.61 42.17 42.31 -0.45 277,000

Pharma and Bio TechAbbott Laboratories 102.00 102.00 101.00 101.02 -0.98 1,461Ferozsons (Lab) Ltd. 73.62 75.00 73.62 73.62 0.00 56GlaxoSmithKline Pak. 66.10 67.50 66.10 66.10 0.00 260IBL HealthCare 17.40 18.40 16.40 16.53 -0.87 28,481Sanofi-Aventis 144.39 144.50 144.00 144.39 0.00 170

Fixed Line TelecommunicationP.T.C.L.A 10.19 10.20 10.06 10.17 -0.02 300,655Pak Datacom Ltd 34.50 34.50 34.50 34.50 0.00 1Telecard Limited 0.77 0.84 0.76 0.80 0.03 41,081Wateen Telecom Ltd 1.70 1.97 1.72 1.75 0.05 19,028WorldCall Telecom 0.97 1.00 0.95 0.97 0.00 114,268

ElectricityGenertech 0.30 0.39 0.28 0.30 0.00 5Hub Power Co. 33.89 34.00 33.51 33.59 -0.30 232,100Japan Power 0.63 0.65 0.60 0.60 -0.03 35,501K.E.S.C. 1.65 1.90 1.70 1.72 0.07 956,984Kohinoor Energy 15.85 16.00 16.00 16.00 0.15 393,500

BanksAllied Bank Ltd 57.21 57.80 54.51 55.19 -2.02 79,798Askari Bank 10.01 10.05 9.98 10.00 -0.01 34,397B.O.Punjab 5.72 5.85 5.70 5.70 -0.02 169,609Bank Al-Falah 11.61 11.64 11.43 11.46 -0.15 149,549Bank AL-Habib 28.94 29.49 28.60 29.25 0.31 108,175

Non Life InsuranceAdamjee Ins 46.27 48.00 46.70 46.79 0.52 19,175Atlas Insurance 35.99 37.69 36.50 36.50 0.51 1,951Cres.Star Insurance 2.00 3.00 2.00 2.00 0.00 1Cyan Limited 50.02 51.00 51.00 51.00 0.98 1,500IGI Insurance Ltd. 45.59 45.60 44.75 44.95 -0.64 2,393

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 0.42 0.42 0.36 0.42 0.00 2Arif Habib Investmen 14.36 14.95 14.00 14.36 0.00 98Arif Habib Ltd. 14.23 14.39 13.78 14.23 0.00 453Dawood Cap.Man XB 0.65 1.00 0.65 0.65 0.00 1Dawood Equities 0.97 1.04 0.75 0.80 -0.17 15,939

Equity Investment InstrumentsAtlas Fund of Fund 5.30 5.60 5.30 5.30 0.00 362B.R.R.Guardian 2.45 2.44 2.28 2.43 -0.02 3,632Cres. Stand.Mod 0.50 0.50 0.26 0.50 0.00 6Elite Cap.Mod 2.55 2.90 2.55 2.55 0.00 24Equity Modaraba 0.75 0.99 0.75 0.75 0.00 303

MiscellaneousPak Paper Prod. 33.57 34.00 34.00 34.00 0.43 500Security Paper 36.00 36.00 35.50 36.00 0.00 300P.N.S.C. 12.67 12.85 12.00 12.07 -0.60 24,217Pak.Int.Con. SD 70.06 72.00 70.50 70.50 0.44 579TRG Pakistan Ltd. 1.15 1.20 1.05 1.07 -0.08 2,132,392Murree Brewery 65.39 65.60 65.00 65.00 -0.39 1,000Shezan Inter. 110.07 110.07 106.00 110.07 0.00 225Pak Elektron Ltd. 3.57 3.69 3.45 3.56 -0.01 77,819Singer Pakistan 15.94 15.94 15.79 15.94 0.00 29Tariq Glass Ind. 8.26 8.35 8.05 8.05 -0.21 14,201Grays of Cambridge 23.00 23.00 23.00 23.00 0.00 500Pak Tobacco Co. 53.63 54.90 53.63 53.63 0.00 15Hum Network Ltd. 16.05 17.01 16.00 17.01 0.96 1,000P.I.A.C.(A) 1.96 1.95 1.95 1.95 -0.01 9,992Sui North Gas 16.00 16.00 15.80 16.00 0.00 60,618Sui South Gas 18.85 19.22 18.67 18.87 0.02 7,687American Life 14.05 14.01 14.01 14.01 -0.04 2,500EFU Life Assur 72.01 74.49 70.60 72.01 0.00 101Jubilee Life In 60.90 61.00 60.51 61.00 0.10 1,000AKD Capital Ltd. 22.60 23.73 22.60 22.60 0.00 30Pace (Pak) Ltd. 1.35 1.45 1.30 1.38 0.03 178,527Wateen Telecom Ltd 1.73 1.98 1.70 1.70 -0.03 5,005Netsol Technologies 8.63 8.75 8.12 8.47 -0.16 204,027Pak Telephone 3.00 3.70 3.00 3.00 0.00 1Netsol Technologies 8.84 8.93 8.60 8.63 -0.21 36,102Pak Telephone 2.18 3.00 2.65 3.00 0.82 5,508

SyMBoL oPEN hIGh Low CURRENT ChANGE voLUME

Oil and GasAttock Petroleum 414.91 418.00 412.50 412.73 -2.18 4,706Attock Refinery 108.99 110.49 108.25 108.88 -0.11 290,024Burshane LPG 22.99 24.13 22.75 24.12 1.13 4,448Byco Petroleum 6.95 7.09 6.84 6.86 -0.09 106,366Mari Gas Co. 87.11 87.23 85.70 86.01 -1.10 86,210

ChemicalsAgritech(PREF)(R) 0.02 0.01 0.01 0.01 -0.01 99,000Arif Habib Co SD 27.46 27.80 27.25 27.63 0.17 249,506Clariant Pakistan 150.10 156.90 150.10 150.80 0.70 4,018Dawood Hercules 39.53 40.20 38.46 38.63 -0.90 48,529Descon Chemical 1.45 1.60 1.45 1.50 0.05 11,448

Industrial metals and MiningCrescent Steel 19.00 19.00 19.00 19.00 0.00 60,000Dost Steels Ltd. 1.18 1.20 1.06 1.11 -0.07 2,276Huffaz Seamless Pipe 8.48 8.21 8.16 8.16 -0.32 712Int. Ind.Ltd. 33.07 33.00 31.42 31.51 -1.56 24,720Inter.Steel Ltd. 11.61 11.60 11.01 11.01 -0.60 2,102

Construction and MaterialsAl-Abbas Cement 2.90 2.89 2.61 2.70 -0.20 1,964Attock Cement 51.30 51.85 51.02 51.30 0.00 2Bal.Glass 1.79 1.71 1.70 1.70 -0.09 2,500Berger Paints 13.97 14.00 13.97 13.99 0.02 866Cherat Cement 9.40 9.35 8.60 8.63 -0.77 5,510

General IndustrialsCherat Packaging 26.75 26.75 26.00 26.19 -0.56 8,350ECOPACK Ltd 3.66 3.66 3.65 3.66 0.00 7,000Ghani Glass Ltd 40.19 40.66 40.19 40.19 0.00 1MACPAC Films 8.00 8.55 7.76 8.00 0.00 6Packages Limited 82.68 82.68 80.00 80.00 -2.68 15,168

Industrial EngineeringAdos Pakistan 5.72 6.00 5.65 5.72 0.00 102AL-Ghazi TractorsXD 186.78 190.00 184.00 188.50 1.72 203Ghandhara Ind. 6.97 6.97 6.21 6.78 -0.19 3,002K.S.B.Pumps 24.31 25.00 23.11 23.13 -1.18 1,721Millat Tractors Ltd. 375.86 377.00 365.05 375.01 -0.85 8,676

Automobile and PartsAgriautos Industries 57.50 57.50 55.51 57.50 0.00 5Atlas Battery Ltd. 163.00 163.00 163.00 163.00 0.00 120Atlas Engineering 58.00 58.00 58.00 58.00 0.00 10,975Atlas Honda Ltd. 120.00 120.00 119.10 120.00 0.00 200Bal.Wheels 26.12 26.12 24.82 26.12 0.00 88

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

Tuesday, 10 January, 2012

06top 10 sectors

43% 05%Construction & Materials

Chemicals Support Services

12%Electricity

02%04%

Fixed Line Telecommunication

01%Automobile and Parts

Financial Services

02%Banks17%Oil & Gas09%Personal Goods04%

International Oil PriceWTICrude Oil

$101.52

BrentCrude Oil

$113.29

STOCK MARKET HIGHLIGHTS

Index Change Volume Market ValueKSE-100 11040.30 -85.05 16,865,876 816,425,627 LSE-25 2871.25 -8.67 757,459 20,979,923ISE-10 2376.85 -16.37 110,100 709,999

Major Gainers

Company Open High Low Close Change TurnoverUniLever Pak Ltd. 5283.00 5430.00 5350.00 5381.67 98.67 31P.S.O. 230.07 236.70 232.00 234.13 4.06 458,960ICI Pakistan 128.71 135.14 126.15 131.99 3.28 149,976Tri-Pack Films 160.40 166.00 162.00 163.00 2.60 806Thal Ltd 79.74 82.22 78.01 82.19 2.45 857,634

Major Losers

Nestle PakistanXD 3163.18 3280.00 3005.03 3019.99 -143.19 185Exide (PAK) 166.10 166.10 163.25 163.27 -2.83 10,338Packages Limited 82.68 82.68 80.00 80.00 -2.68 15,168Attock Petroleum 414.91 418.00 412.50 412.73 -2.18 4,706Allied Bank Ltd 57.21 57.80 54.51 55.19 -2.02 79,798

Volume Leaders

Fatima Fert.Co. 23.01 23.23 22.60 22.66 -0.35 2,704,926TRG Pakistan Ltd. 1.15 1.20 1.05 1.07 -0.08 2,132,392Lotte PakPTA 10.05 10.35 10.02 10.14 0.09 1,323,451K.E.S.C. 1.65 1.90 1.70 1.72 0.07 956,984Thal Ltd 79.74 82.22 78.01 82.19 2.45 857,634

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

Gold 24K 54,995.00 47,199.00 1,618.00Gold 22K 51,608.00 44,245.00 –Silver (Tezabi) 982.00 843.00 35.05Silver (Thobi) 1025.00 880.00 –

Interbank RatesUS Dollar 90.7614UK Pound 140.0903Japanese Yen 1.1801Euro 115.9387

Buy SellUS Dollar 89.80 90.80Euro 113.94 117.18Great Britain Pound 138.07 141.65Japanese Yen 1.1619 1.1886Canadian Dollar 86.75 90.24Hong Kong Dollar 11.42 11.81UAE Dirham 24.43 24.96Saudi Riyal 23.94 24.43Australian Dollar 91.12 95.00

PDF Profit_Layout 1 1/10/2012 12:19 AM Page 6

Tuesday,10 January,2012

news

08

Value addition is the key forPakistani companies to competeglobally. Teradata is busy hiring200 Pakistani youth to groom themfor global consultancy services

Teradata Pakistan MD, Khuram Rahat

LAHORE

IMRAn ADnAn

THE Economic CoordinationCommittee (ECC) of theCabinet has constituted aspecial committee, compris-

ing of Planning Commission DeputyChairman nadeem ul Haque (Con-venor) and secretaries Ministries ofCommunications, Commerce and In-dustries, to formulate Transport andTrucking Policies within two weeks,Profit learnt on Monday.

PRohIBITING ovERLoADING

The ECC, in its meeting held on Tues-day, was informed that the country hadto lose some Rs10 to Rs15 billion perannum on account of road maintenancedue to trucks overloading. It was indi-cated that the country could easily savethis amount by prohibiting overloadingto single-axel trucks. During the ensu-ing discussion, it was pointed out thatthere was no check on the truck load,which was a major cause of deteriora-tion of road networks. It was stated thatthere was a dire need to install weighingbridges on all important entry points ofmajor roads and any truck carrying ex-cess load should be fined heavily.

TRANSPoRT PoLICy PREPAREDThe ECC was informed that transportpolicy had already been prepared andready for submission to the ECC. Itwas also stated that, besides transportpolicy, there was also a need forproper trucking policy and for givinga long-term roadmap to the trans-porters. The ECC was also apprisedthat a trucking policy was framed in2008 and its recommendations weredeliberated upon. There were somegood proposals in that policy and thesame may also be considered beforeformulation of transport policy. Itwas informed that the ECC, in itsmeeting held on April 26th, 2011, ona summary submitted by the Ministryof Commerce constituted a Commit-tee under the chairmanship of Plan-ning Commission Deputy Chairmanto review the issues pertaining totransport policy. The committee in ameeting held on May 6th, 2011, rec-ommended that there was a need totreat CnG cars and buses separately.

DEDICATED CNG BUSES It recommended that there was aneed to sharply increase tariff on

CnG kits for cars, whereas dedicatedCnG buses for public transportmight be considered as the Advisorto Prime Minister on Petroleum &natural Resources was of the viewthat CnG could be provided throughdedicated CnG stations.

CoMPREhENSIvE PoLICy

It was further disclosed that if dedi-cated CnG buses were allowed an al-ready approved public transportproject, sponsored by Ministry of Envi-ronment, could become operational. Itwas revealed that certain dedicatedCnG buses imported by some privateinvestors lying at Karachi Port Trust(KPT) and waiting for clearance of Cus-toms due to settlement of originalequipment manufacturing (OEM) issuecould also be allowed for public trans-port in case CnG was available. It wasindicated that a draft comprehensivetransport policy had been prepared bythe Ministry of Communications,which would be considered under nTCtaskforce headed by Planning Commis-sion Deputy Chairman. Some memberssuggested that the concept of transportpolicy may be broadened subject to theconsideration of the nTC taskforce forTransport Sector Reforms.

LAHORE

IMRAn ADnAn

ECOnOMIC Coordination Com-mittee (ECC) of the Cabinet hasdecided that the price differen-tial between prices of imported

urea and selling price of locally manufac-tured urea should, in no case, be morethan Rs50 per 50-kg bag. ECC in its re-cent meeting was informed that the na-tional Fertiliser Marketing Limited(nFML) was supplying imported urea atRs1,300 per 50-kg bag, while the locallyproduced urea was available to the farmerat Rs1,700-1,750 per 50-kg bag and in thisway the middleman was benefiting.

The meeting recalled ECC’s earlier deci-sion where-under price differential betweenimported urea and the locally manufacturedurea should not be more than Rs25 per 50-kg bag. It was suggested that in order to en-sure benefit to the farmer, it was imperativethat the aforesaid decision of the ECC shouldbe strictly enforced. However, the price dif-ferential may be adequately enhanced. It wasalso observed that, transport charges andother incidentals are not included in theprice mechanism to determine the cost effec-tiveness of the price differential.

ECC was informed that in pursuance ofits decision of February 1, 2011, 23,497tonnes of urea out of 70,000 tonnes re-served for the flood affectees of Sindh forRabi 2010-11 was diverted to Punjab fromTrading Corporation of Pakistan (TCP)

stocks with an understanding that thisquantity would be replenished on arrival ofimported urea. At the time, price of ureacharged by the nFML was Rs780 per 50-kg bag, which later increased to Rs1,300per bag. It was revealed that the matter wastaken up with government of Punjab for re-turn of the same quantity of urea to Sindh,but that the Punjab had not agreed. How-ever, on the directions of senior ministerfor industries, 5,068.75 tonnes of ureacosting Rs131.78 billion had been suppliedto the government of Sindh, leaving a bal-ance of 18,428.55 tonnes, cost of which atthe prevailing rate of Rs1,300 per 50-kgbag comes to Rs479.14 million.

Ministry of industries proposed thatthis amount may be reimbursed by the fi-nance division. During discussion, it wasobserved that transfer of urea to Punjab wasa good gesture of the government of Sindhand it needed to be reciprocated. It was alsoobserved that ECC’s decision relied upon byministry of industries did not mention thetransfer of urea to Punjab or the risk recov-ery. Thus, government of Punjab could notbe forced to return the urea. However, ECCsuggested that the matter may again betaken up with government of Punjab foran amicable solution. It decided that sec-retaries finance and industries divisionshould jointly have a meeting with Punjabchief secretary, and if needed, with thechief minister Punjab also, to persuadethe later to reciprocate the good gestureof the government of Sindh.

KARACHI

STAFF REPORT

EYInG to enhance the currenttrade volume of $1.36 billionbetween Pakistan and SouthKorea to at least $2 to 3 billion

in the next couple of years, efforts areunderway to negotiate and sign the FreeTrade Agreement between the twocountries. This was said by ambassador ofPakistan to South Korea Shaukat AliMukadam in a recent meeting with officebearers of Karachi Chamber of Commerceand Industry (KCCI) at chamber’s office.He highlighted that South Korea sees

Pakistan as the most promising countryfor investment. He said that owing togreat trade potential the recent trade of$1.36 billion can increase to $2-3 billion iftrade potential is effectively utilised. Hesaid that a paradigm shift for Koreaninvestment has been observed and nowthey are prioritising to invest in Pakistanand other regional countries while theyhave made huge investment in Westerncountries. Other Korean leadingconsortiums are investing in Hydro-powerand steel sectors. He said that one KoreanSteel sector giant is joining hands withTuwarqi Steel in Pakistan. Lahore-Islamabad Motorway, Lowari Tunnel,

Hyderabad-Mirpurkhas dual carriagehighway projects endorse the Pak-Koreafriendship. He said that efforts areunderway to negotiate and sign Pak-KoreaFTA. He pointed out the immense exportpossibility of mangoes, dates, fruits,readymade garments and sports goods.He stated that around 10,700 Pakistaniswere residing in Korea performing asbusinessmen, skilled workers andstudents. Pak Government was alsoconsidering establishing a specialeconomic zone for Korea, the ambassadormaintained. President KCCI Mian Abrarassured the Ambassador to extend bestpossible support and facilitation to the

Korean business community. VicePresident Zia Ahmed Khan and theManaging Committee Members of KCCIalso participated in the meeting.Earlier Mian Abrar urged the KoreanInvestors to enter into joint ventures inPakistan in the alternate energy,agriculture and engineering sectors. Healso asserted upon the need of buildingtrading blocks of Pakistan with Asiancountries, Central Asian Republics andSAARC countries. He urged theAmbassador to suggest and convince theSeoul Chamber to form Karachi-SeoulJoint Chamber of Commerce & Industryon the pattern of Pakistan-Afghanistan

Joint Chamber which KCCI formed lastyear. He articulated that Pakistan possessgreat potential to multiply its exports and$25 billion export alone can be made toUSA if allowed. He expresseddiscontentment on meager 7 per centtrade among SAARC countries andasserted to execute Indo-Pak trade viaKarachi and Mumbai ports to bringprosperity and alleviate poverty in theregion. He also requested theAmbassador to invite business delegationand exhibitors to participate in theKarachi Chamber’s My-Karachi Oasis ofHarmony Exhibition scheduled to beorganized in July 2012.

LAHORE

ECOnOMIC Coordination Com-mittee (ECC) of the Cabinethas approved the establish-ment of a dry port at Prem

nagar and directed Revenue Division tosubmit a summary showing total num-ber of dry ports and industrial estates es-tablished in the country as well as theirperformance, Profit learnt on Monday.ECC in its recent meeting was informedthat industries located at Sundar andRaiwind-Manga corridor had been de-manding the establishment of a dry portin their closer vicinity. Besides, thePrime Minister’s Secretariat also di-rected Federal Board of Revenue (FBR)for establishment of a fully equipped dryport either at Jia Bagga or Raiwind. ECCwas further informed that Pakistan Rail-ways was already establishing a Dry portor inland container depot (ICD) throughprivate public partnership at Premnagar near Raiwind. The project hadbeen completed in all respects. In the

light of availability of required infra-structure, land customs station / dryport at Prem nagar, District Kasur onLahore-Sahiwal section was ready to bemade operational. Revenue Division,therefore, sought approval of ECC forthe establishment of a dry port by Pak-istan Railways through private publicpartnership at Prem nagar near Rai-wind, subject to fulfillment of all appli-cable conditions. During the discussion,ECC was informed that overall charge ofdry ports, except a few, was with Pak-istan Railways. It was stated that someof the dry ports were not properly func-tioning. It was suggested that ECC mightbe apprised of the number of dry portsand industrial estates working in thecountry as well as of their performance.

ECC was also apprised that PakistanRailways had invested a heavy amount forthe establishment of dry port at Premnagar, in addition to investment by pri-vate sector. ECC nevertheless, observedthat the dry port should be linked withmajor highways and Railways network tobenefit public. IMRAn ADnAn

‘Truck overloading causesRs10-15b loss every year’

Profiteers bag Rs400-450 perurea bag sale: ECC observes

Prem Nagar dry port establishment approved

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