RUPEE-DOLLAR PARITY

Tuesday, 18 December, 2012

Developed economies togrow by 1.6% in 2013:LagardeSANTIAGO: IMF chief Christine La-garde upwardly revised the Fund’s esti-mate of economic growth amongdeveloped nations, which she saidwould increase by 1.6 percent next year,up from an earlier estimated 1.5 per-cent. She told Chile’s La Tercera news-paper that developing countries shouldgrow by 5.6 percent, while the globaleconomy is expected to expand by 3.6percent. “So 2013 will be a little betterthan 2012,” the Chilean daily quotes heras saying. Lagarde was in Chile Thurs-day and Friday for a visit that included ameeting with Chile’s President Sebast-ian Pinera. She also took part in a meet-ing of the Community of Latin Americanand Caribbean States. AGENCIES

Bears leave their markon the capital ISLAMABAD: The Islamabad StockExchange witnessed a bearish trend onMonday as the ISE-10 index was down by18.81 points to close at 3220.56. A total of270,000 shares were traded, which wereup by 266,500 shares as compared toprevious day’s trading of 3,500 shares.Out of 144 companies, share prices of 64companies recorded increase and those of80 registered decrease. No companyremained stable. The share price ofUnilever Pakistan increased by Rs 80.00,while that of Murree Brewery decreasedby Rs 7.75. K.E.S.C, NIB Bank and FaujiCement remained the top tradingcompanies with 125,000, 125,000 and10,000 shares respectively. APP

Crude up in Asia onChina demand hopesSINGAPORE: Oil was up in Asia Mon-day on trader expectations of a hike inChinese crude demand after a key surveyshowed its manufacturing activity hittinga 14-month high in December, analystssaid. New York’s main contract, lightsweet crude for delivery in January rose23 cents to $86.98 a barrel and BrentNorth Sea crude for February deliveryadvanced five cents to $108.23. “Oilprices rose... on expectations for im-proved demand in China after datashowed the manufacturing sector in theworld number two oil consumer ex-panded in December at its fastest pace inmore than a year,” Phillip Futures said ina report. Banking giant HSBC in its pre-liminary purchasing managers’ index(PMI) released Friday recorded China’smanufacturing activity at 50.9 in Decem-ber, the highest the index has reached in14 months. AGENCIES

KARACHI

ISMAIL DILAWAR

HAvING long been indifferent to arecord depreciation of the rupeeagainst the dollar, the federalgovernment has finally de-cided to take remedial meas-

ures to what State Minister for Finance andInvestment Saleem H Mandviwalla said re-verse the upward spiral of the greenback.

Monday saw the rupee trading at 99.25against the greenback in the open market, thehighest ever devaluation the Pakistani currencyhad ever seen in the country’s decades-old his-tory. Whereas the regulators tend to assign the for-eign exchange reserves-related attributablefactors to the historic rupee-dollar imparity, themarket sources point at irregularities like the smug-gling as well as forward booking of the US currencyby the importers at a zero margin.

The sources said ongoing appreciation in the valueof dollar was due to the gap in the supply and demandof the dollar created on the local currency market byhuge sums illegally being smuggled to foreign coun-tries, particularly the United Arab Emirates (UAE).

Sensing gravity of the situation, State Minister forFinance Mandviwalla called and chaired a meeting ofthe stakeholders here at the State Bank of Pakistan(SBP) Monday afternoon.

“The meeting would discuss the one-point agendaof looking ways to reverse this process,” the ministertold Pakistan Today at a launch ceremony of twoBritish brands here at a city shopping mall.

Mandviwalla confirmed as sources privy to the meet-ing told Pakistan Today that the federal government,represented in the meeting by the State Minister for Fi-nance and the central bank officials, decided to take “fewserious measures” to control depreciation of the rupee.

The sources said the money exchangers in themeeting told the government side that inter-bank wasthe market which needed to be regulated by the centralbank. The currency dealers proposed that the regulatormust prevent the banks from forward booking thegreenback at a zero rate. Also the exchangers drew thegovernment towards millions of dollars draining out ofthe country as a result of smuggling to the UAE coun-tries like Dubai. When contacted Malik Bostan, chair-man Forex Association of Pakistan (FAP), confirmedthat the government side had decided to look into themoney exchangers’ suggestions.

“The forward booking should not be free, insteadshould be at 100 percent margins,” he said adding theState Bank should ban the opening of LCs at a zero ratefor the advance booking of the dollar, as the practiceleaves the market short of the greenback.

About the smuggling, Bostan said the State Minis-

ter vowed to contact the UAE government asking it notto allow the travelers from Pakistan carry dollars in ac-

cess of $ 10,000 if they failed to produce apermission letter is-

sued by the SBP.“The State Bank

would issue permis-sion letters to those want to

carry dollars,” he said.Bostan said the volume ofdollar in the country’s cur-

rency market was fast re-ducing due to smuggling.

“A couple of months ago we usedto have a $ 10-15 million daily

turnover which now has re-duced to $ 5-7 million,” thedealer said.

The SBP would develop an onlinemechanism to regulate the movement of

the dollar, Bostan quoted Mandviwalla astelling the meeting. “Well, few serious measures

will be taken to stop dollar slide,” the state minister forfinance told Pakistan Today.

Mandviwala said “yes” when asked if his side haddecided to focus on curbing the smuggling and forwardbooking of the US currency to check its shortage onlocal market.

Smugglers, forward bookers to feel theheat as govt wakes up to falling dollar

KARACHI

STAFF REPORT

In spite of economic issues, power short-ages and security related concerns, thecountry’s equity market remained one ofthe best performing in Asia during thecalendar year 2012.

The benchmark KSE-100 Indexgained 48% in local currency and 37% inUS$ terms in the outgoing 2012 withonly 9 trading sessions remaining, ob-served analysts at Topline Research in areport issued Monday.

“Major boost to Pakistan equitieswas provided by declining interest ratesthat sharply came down by 450bps inlast 18 months (250bps in 2012). Reso-lution of Capital Gain Tax related issues,improved foreign flows in equities, ris-ing consumerism, better corporate earn-ings and relative calmness on politicalscenario also supported the share

prices,” they said.The market worth of Karachi bourse

is now Rs4.2tn, up 43% in calendar year2012. However in US dollar terms themarket cap is still down 42% from itspeak of US$75bn seen in April 18, 2012.Sharp decline in Pak Rupee since 2008,absence of large listings and decent div-idend payouts have restricted thegrowth in the overall market valuation.As a result, Pakistan’s market cap toGDP ratio of 20% of Pakistan is one ofthe lowest in the region.

Average daily traded value remainedRs4.7bn in 2012 compared to Rs3.5bn in2011, an improvement of 35%. In termsof shares, volumes have jumped substan-tially by 121% in 2012 to 175mn shares aday mainly due to investors’ interest inlow price shares. In the absence of vi-brant derivatives market and lack of newlistings, in spite of bull run the volumesare still lower than average daily of

Rs30bn witnessed in the period 2005-07Though Pakistan stock market has

posted a handsome gain in 2012, thetrend of equity public offerings atKarachi bourse remained depressed.Pakistan equity market saw only 3 IPO’sin the outgoing calendar year 2012 com-pared to 4 in 2011.

This low level of listing is seen after agap of 6 years while it also compares un-favorably with last 10-years average of 11offerings a year. During outgoing 2012, atotal of Rs500mn (US$5mn) was offeredto general public, HNWI (High-Net-worthIndividual) and local & foreign institu-tions, which is substantially lower than

Rs4.8bn (U$$56mn) offered in 2011. The rally in 2012 was led by mid caps

as traditional sectors like Explorationand Banks did not outperformed. Ce-ment stocks were among the top per-formers as investor re-rated the sector by152% in 2012, on account of improvedearnings. Growing demand and firmprices, kept cement makers’ margin im-proving. Further, reducing cost pressuresdue to decline in coal prices and interestrates also helped.

Similarly, improving earnings oflisted textile firms on account of stablecotton prices, increased regional demandand declining interest rates helped thissector to perform despite lower share inthe overall market capitalization.

Further, recently approved EU tradepackage and strong textile export num-bers provided further triggers to the per-formance. Resultantly, textile sectorgained 99% in 2012.

CY2012 saw Pakistan equities gain 48%

KARACHI: The beleaguered rupee fell to yet an-other record low on Monday amid consistent de-mand for the US dollar both in the interbank andkerb currency markets. Dealers said that in the in-terbank market the rupee eased by 30 paisas to98.10 to a dollar during the intra-day trading.Moreover, in the open or kerb market the rupee de-clined by 40 paisas to 99.20 to a dollar. The rupeehas been under consistent pressure amid decliningforeign exchange reserves after Islamabad beganrepayments of loans earlier this year obtained fromthe International Monetary Fund under the StanbyArrangement. NNI

g Millions of dollars being smuggled to UAE unchecked g SBP mulling to ban forward booking of dollar at

zero margins g Finance minister says ‘few serious measures’ due to stop dollar’s slide g UAE govt to be

contacted on dollar smuggling g State Bank to issue travelers permission letter for carrying $10,000

Rupee falls to yet another historic low,crosses 98 to a dollar mark

LAHORE

NNI

Pakistan Industrial and Traders Associations Front(PIAF) has urged the Federal Commerce Minister tofinalise Trade Policy document in the light of businesscommunity suggestions and proposals to make itmore meaningful and acceptable to the stakeholders.

In a statement issued here Monday, the PIAFChairman Engineer Sohail Lashari said that the newpolicy should be framed in a way that it is not onlyacceptable to all the stakeholders but it has certainachievable targets and realistic objectives as well. Asall the times policies are made and announced with-out the due consultation of stakeholders and thushardly any targets are achieved.

The PIAF Chairman said that the industrial pro-duction would remain sluggish and all the targets ofTrade Policy would remain unfulfilled unless anduntil measures are not taken to expedite the indus-trial wheel by availability of cheaper electricity andcontinuous supply of gas to the industry.

He said that the government should concentrateon electricity production through hydel means asthermal electricity is not only very costly but also

adding up to the import bill. He said that thermalpower units could be a stop-gap arrangement andtheir adoption for a longer term would hit the econ-omy hard. While stressing the need for constructionof Kalabagh Dam, he said that a lot of money had al-ready been spent on the project and it is quite feasi-ble but for unknown reasons, the presentgovernment is reluctant to start work on it.

He said that the upcoming trade policy mustfocus on promoting exports of non-traditional itemsas concentration on a few items and on few countriesis also hitting the country’s economy hard.

Sohail Lashari said that auto-parts, handicrafts,precious stones, herbal medicines and fruits havehuge potential in South East Asia, Far East andAfrican region. He said that textile sector makesmore than 65 percent of total export earnings de-spite the fact that Pakistan produces excellent qual-ity fruit & vegetables, Halal meat, auto-parts,confectionary items, sports goods and medicalequipment etc. He said that the business commu-nity was ready to supplement all government effortsaimed at enhancing the exports but without dueconsultation of real stakeholders even the easiesttargets become harder to achieve.

PIAF urges commerce minister tofinalise Trade Policy document

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02

Tuesday, 18 December, 2012

Major Gainers

CoMPANY oPEN HIgH Low CLoSE CHANgE TUrNovErNestle Pakistan Ltd. 4701.00 4850.00 4850.00 4850.00 149.00 40Unilever Food 4200.00 4300.00 4300.00 4300.00 100.00 20UniLever Pak 10020.00 10100.00 10060.00 10100.00 80.00 200Siemens Pakistan 748.70 784.49 753.90 774.55 25.85 15,800Fazal Textile 233.50 245.17 245.17 245.17 11.67 200

Major LosersSalfi Textile 156.51 148.69 148.69 148.69 -7.82 1,000Murree Brewery 155.00 148.50 147.25 147.25 -7.75 11,900National Foods 281.78 276.10 275.00 275.00 -6.78 5,300Fazal Cloth Mills 136.66 130.00 130.00 130.00 -6.66 500AL-Ghazi Tractors 252.79 247.00 245.00 246.75 -6.04 1,000

Volume Leaders

Maple Leaf Cement 14.92 15.35 14.61 14.83 -0.09 14,750,000Tariq Glass Ind. 20.05 21.05 19.95 21.05 1.00 5,164,500Jah.Sidd. Co. 16.98 17.20 16.60 16.70 -0.28 3,597,000Fauji Cement 6.64 6.74 6.53 6.60 -0.04 3,522,500Byco Petroleum 11.31 11.45 10.99 11.01 -0.30 2,800,500

Interbank RatesUS Dollar 98.1183UK Pound 158.9320Japanese Yen 1.1710Euro 129.0550

Dollar EastBUY SELL

US Dollar 98.60 99.30Euro 128.73 130.18Great Britain Pound 158.41 160.17Japanese Yen 1.1628 1.1757Canadian Dollar 99.06 100.67Hong Kong Dollar 12.50 12.70UAE Dirham 26.68 26.95Saudi Riyal 26.17 26.39Australian Dollar 102.68 105.27

Business

KARACHI

STAFF REPORT

IF Pakistan is to follow theeconomic growth of theUnited Kingdom it wouldfind retail market at theheart of that, British

Deputy High Commissioner to Pak-istan Francis Campbell told a launchceremony of two British brands heldhere at a shopping mall Monday.

Monday saw TONI&GUY-Karachi and POND’S officiallylaunching their new FlagshipSalon and Skin Center here in thepresence of Minister of State forFinance and Investment Saleem.H Mandviwalla, ChairmanUnilever Pakistan Ehsan Malik,CEO TONI&GUY-Karachi SaeedaMandviwalla and others.

Expressing his delight over hav-ing what he said the oldest andyoungest British brands joininghands in Karachi, Frances said hiscountry was the second largest for-eign direct investor in Pakistan. “verymuch so,” he replied when asked if hewould like more British firms tocome for investment in Pakistan.

“This truly is a remarkablemilestone to see two Britishbrands partnering with each other

in a highly lucrative market likePakistan,” he said adding “Thisunique business expansion notonly brings creativity and continu-ity to the hairstyling and beautycare industry, but is determinedsteps towards strengthening thebi-lateral trade relationship be-tween the UK and Pakistan.”

Speaking about the growingoverseas business investments inPakistan, the “emotionally charged”Saleem H. Mandviwalla said: “It isour job to promote international in-vestment in the country and I am

very pleased that Unilever’s brandPOND’S and TONI&GUY-Karachihave decided to expand their oper-ations further.”

He said Pakistan had a huge in-vestment potential where over 700multinational companies were op-erational and making profits indouble digits. Unilever, he said, wasone of the 100 British MNCs thatwere functional in the country.

“Pakistan is a land of opportu-nities with low business setupcosts, high quality skilled labourand a very strong middle class-

support system. We encouragefurther collaboration between in-ternational and local brands tocreate a market synergy whichpromotes healthy competition.”

Chairman Unilever PakistanEhsan Malik said this unique syn-ergy between POND’S andTONI&GUY-Karachi would onlyraise the bar higher for the localpersonal care industry.

“The people of Karachi arehighly beauty-conscious and thisflagship salon will cater to theirevery need. POND’S is a world fa-mous skincare brand which hasbeen in Pakistan for a long timeand this collaboration will onlyhelp us grow with a much youngerclientele that TONI&GUY-Karachiis renowned for,” he said.

CEO TONI&GUY-KarachiSaeeda Mandviwalla said the flag-ship salon and skincare center wouldprovide state-of-the-art hair, nailand skin services to its clienteleunder one roof. The luxuriousTONI&GUY-Karachi and POND’SSkin Center – the state-of-the-artsalon and skin center is the first of itskind in the world, where two inter-national brands have joined hands tobring to the Pakistani consumer, thebest skin and hair care services.

Etihad Airways named world’sleading airline for fourthconsecutive yearKARACHI: December 17, 2012 – Etihad Airways,the national airline of the United Arab Emirates, hasbrought home top honours at the World TravelAwards, taking the World’s Leading Airline title forthe fourth year in a row. The awards were an-nounced last night at a black-tie gala event at theOberoi Gurgaon in New Delhi, India. Etihad Airwaysalso received recognition for its Diamond First Classproduct, named the World’s Leading First Class. TheWorld Travel Awards were established in 1993 toseek out and reward the very best travel organisa-tions in the world, acknowledging the elite organisa-tions in their respective fields through a globalindustry vote. In 2012, nearly 650,000 votes werecast by travel professionals from 191 countries. TheWorld Travel Awards have achieved top industrystatus and been named by the Wall Street Journal asthe “Oscars of the Travel Industry”. James Hogan,Etihad Airways President and Chief Executive Offi-cer, said: “I am delighted that Etihad Airways hasagain been named the World’s Leading Airline. Par-ticularly in our region, the competition is strong, sothis is a fantastic way to round out what has been anexceptional year for us. “We have received thisaward for four consecutive years and every year wehave sought to raise our standards even higher. Weare consistently good, but we are always consideringways to enhance our guest offering even further andprovide the best experience in the skies.

UBL wins ‘Bank of the Year2012’ AwardKARACHI: United Bank Limited (UBL) wasawarded ‘Bank of the Year 2012 Pakistan’ by theprestigious international publication ‘TheBanker’ in a ceremony held at the Intercontinen-tal Hotel, Park Lane, London, on November 28,2012. UBL won the award for promoting indus-try-wide excellence in the global banking com-munity – characteristics that The Bankeradvocates and rewards. On conferring the award,The Banker congratulated UBL on the trust thatclients have shown in the Bank through the re-cent financial crises and mentioned that this willserve the institution well in recovery. They alsostated that the recognition of being named ‘Bankof the Year 2012 Pakistan’ by the world’s longest

running international banking title is testamentto UBL’s strong management, sound businessmodel and prudent risk approach.

NBP, Subh-e-Nau to continueefforts for SCI patientsISLAMABAD: National Bank of Pakistan haspledged to continue its cooperation with Subh-e-Nau towards provision of medical support toSpinal Cord Injured (SCI) patients from the 2005Northern Kashmir earthquake. This was observedin a meeting between National Bank of Pakistan(NBP) and Subh-e-Nau (SN) officials held on De-cember 14th at Islamabad Club. Mr. Tariq ZafarIqbal, Regional Head NBP Federal Capital RegionIslamabad, stated that it was time to double ourefforts for the well-being of these patients. He saidour society should accept them and give themtheir rightful status. Ms. Zahida Hamid, GeneralManager Business NBP, said that there should berecognition for these patients in our society. Shestated that we should learn from countries thatprovide proper status and facilities to elevate theirquality of life. Dr. Farrukh Chishtie, Head, Re-search & Development SN, introduced the servicesprovided by the disability program in Muzaf-farabad, and stated that a continuation of suchfollow-ups and service delivery is needed, as cur-rently these patients are ignored by the society atlarge. He stressed that change through persistenceand dedication is required at all levels andthanked NBP in their unwavering support towardsthe disability cause in Pakistan.

Plight of PSF Manufacturingin PakistanISLAMABAD: Polyester is used in the manufac-turing of all kinds of clothes and home furnishingslike bedspreads, sheets, pillows, furniture, carpetsand even curtains. Discovered in 1941 by Britishchemists, Polyester Staple Fiber (PSF) manufactur-ing came to this part of the world in the early eight-ies. PSF feeds into the spinning industry where thefiber is spun into yarn for the downstream fabricand garment industries and finds consumptionboth locally and in export markets. For the past 30years, domestic PSF producers have provided thedownstream textile sector, and in particular thespinning industry, quality product at regionallycompetitive prices to become over time reliablesuppliers of their key raw material requirement.This domestic arrangement, in turn, has helped thedomestic spinning industry to flourish, and todayPakistan has the third highest spinning capacity inthe region. It is unfortunate however, that for thelast few years, the domestic producers of PSF havebeen subjected to unfair trade practices as PSF con-tinues to be dumped into Pakistan. Globally, dump-

ing is considered as “unfair trade” and the WTOrules mandate countries to protect their domesticindustry through imposition of Anti-dumping du-ties after due process of law.

MBM introduces Hitachi products KARACHI: MBM International today announcednationwide product availability of Hitachi home ap-pliances in Pakistan. Hitachi is amongst the Top 50Fortune 500 companies in the world. It is also one ofthe largest companies in Japan. Hitachi operates indiverse areas ranging from social infrastructure tohome appliances, materials, logistics and services.The event was attended by who is who of consumerelectronic industry along with key personnel’s fromMedia and Corporate fraternity. Live Productdemonstration was arranged so audience could ex-perience state of the art technology of Hitachi.Speaking to the audience, Mr. Parkash Issardas,Sales Manager Hitachi Home Electronics Asia com-mented that “Today, we are proud to announce ourtie up with MBM International Pakistan for distribu-tion of Hitachi consumer products nationwide. Thisassociation reflects our vision to bring latest technol-ogy to developing economies in Asia. And Pakistanbeing one of the most dynamic markets in SouthAsia has huge potential for Hitachi products.”

CORPORATE CORNER

Francis draws ‘growth crazy’Pakistan towards retail market

ISLAMABAD: Adraino Chiodi Cianfarani, Ambassador ofItaly to Pakistan along with the Chief Operating Officerof Hashoo Group of Hotels Mr. Clive Webster attend aribbon cutting ceremony that honors the opening ofZigolini’s, Pasta and Pizza, An Italian Restaurant atIslamabad Marriott Hotel.

KARACHI: Hussain Syed, Administrator, KMC presenting the‘2nd Fire and Safety Excellence Award – 2012’ Award to FayyazMerchant, General Manager SSGC.

KARACHI: Branch Managers conference of Sind Region wasrecently held in Sukkur to review the progress of the Region.Featured in the photograph are Mr. M. Bilal Shaikh,CEO/President of Sindh Bank Ltd. (Right), with Mr.NaimFarooqui, COO (Centre) and A s sad Ali Shah, SVP/RegionalHead-Sindh (Left).

ISLAMABAD: Saleem H. Mandviwalla Minster of Finance & Investmentinaugurating Flagship Salon and Skin Center at Dolmen City Mall. CEO TONY &GUY Ms. Saeeda Mandviwalla, Chairman Unilever Ahsan Malik, Francis CampbellBritish Deput High Commissioner are also seen in the picture.

Pepsi commits to building a new student dining facility for IBA

KARACHI: PepsiCo and IBA signed a multi-year agreement yesterday, according to which PepsiCo willfund IBA’s new dining center. The new dining center will be named the “Pepsi Dining Center” and willbe a state of the art facility. This gesture further reinforces PepsiCo’s commitment towards enhancingthe state of education and related infrastructural needs in universities. Jahanzeb Khan, GeneralManager PepsiCo Pakistan and Dr. Ishrat Hussain, ex-Governor State Bank and current Dean andDirector IBA signed the agreement in the presence of faculty, staff and the PepsiCo team in a small butimpressive ceremony. “IBA remains a hub of consumers, image makers, professionals and policymakers. IBA has produced about 8000 graduates’ to-date, each one being an outstanding professional.Most of the Chief Executives and top management positions in leading listed companies, corporationsand banks are held by the alumni of IBA. It is an honor for us to be associated with IBA and I hope thisrelationship progresses to more areas” commented Jahanzeb Khan.

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