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um@ir

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Latest News
« Reply #-1 on: October 06, 2008, 06:36:34 PM »
For all domestic news items.
« Last Edit: February 04, 2012, 09:37:44 AM by M&M »

Pakinvestorsguide

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« Reply #-1 on: October 06, 2008, 06:36:34 PM »

um@ir

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Re: Latest News
« on: October 07, 2008, 09:18:24 AM »
Central bank moves in after call money rates hit 32 per cent; rupee touches bottom, recovers as banks sell dollars to meet cash crunch

Tuesday, October 07, 2008
By Shahzad Anwar

KARACHI: The State Bank of Pakistan on Monday intervened in the money market to help cash- strapped banks.

The banks were facing severe liquidity crunch soon after the festive occasion of Eid to the extent that overnight rates (the rate at which banks lend to each other) were hovering between 28 and 32 per cent.

The State Bank of Pakistan through its Open Market Operation (OMO) on Monday injected Rs53.90 billion into the money market at 12.63 per cent rate of return for 7-days Reverse Repo.

The SBP received bids worth Rs54.40 billion offers of which it accepted Rs53.90 billion. The market sources said that SBP operation partially helped cash scarce banks in overcoming their liquidity shortfall, which helped overnight lending rates to simmer down to 18 per cent from 28 to 32 per cent quoted earlier in the day.

The primary cause of liquidity squeeze is said to be the depletion in country’s forex reserves which declined to $8.136 billion on September 27, 2008, as a result the net foreign assets have gone down by Rs167 billion - as against Rs24 billion fall at same time last year.

Banking sources said that without injection of additional liquidity banks were finding it difficult to extend cotton financing to textile sector at a time when Kharif season is about to kick-off. Volatility continued in forex market as rupee depreciated to the lowest level versus US dollar during the day but closed with significant recovery on Monday the first trading day of the week.

“On Monday usually the volume of outflows is higher than inflows but today there was comparatively lower demand for US dollar which reduced pressure on rupee,” a forex dealer said. “The banks are facing worst liquidity crunch and with dearth of cash they preferred to sell dollars reserves instead of pilling them up, which helped rupee to recover back some grounds,” a forex dealer said.

In early hours of day there were some obligatory foreign payments, which caused rupee exchange value to plunge to Rs78.60 on buying and Rs78.70 on selling counters, however, rupee recovered some grounds and closed at Rs78.20 on buying and Rs78.35 on selling counters in interbank market before day trade closed.

Banking sources said that accountholders withdrew approximately Rs1.3 trillion during Ramazan and before Eid in order to pay Zakat, fitr, and other religious obligations as well as financing of Eid expenses.

um@ir

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Re: Latest News
« Reply #1 on: October 07, 2008, 09:24:13 AM »
Foreign debt soars after rupee’s plunge


LAHORE: A sharp fall of the rupee has played havoc with the economy, with foreign debt rising from Rs2,759 billion to Rs3,493 billion, size of the economy dropping below $150 billion and per capita income slipping to $780.

Economists have urged the government to realise the urgent need of addressing the factors that are putting pressure on the rupee and damaging the economy. They say Pakistan’s foreign debt at the end of the last fiscal year in June stood at $44.5 billion, which has increased in rupee terms by Rs743.25 billion as the currency plunged after July from Rs62 to a dollar to Rs78.50. The decline is still on and the government has not taken any concrete steps to stem the rot.

Gross domestic product, which was $160 billion on the basis of the rupee value of Rs62, has slipped below $150 billion. Earlier, Pakistan was moving steadily to join the club of Middle Income Group countries as its per capita income increased to $990 at the end of the last fiscal in June. However, the per capita income has now declined to a little over $780 after the sharp fall in rupee’s value.

The country is likely to remain among ‘low income’ states for a long time. This, the economists say, is in line with the purchasing power of the rupee which has declined considerably during the past six months.

They say the government would have to revisit the poverty profile, which has deteriorated in line with the decline in the purchasing power of the country. Some economists state that poverty must have increased by 10 per cent to above 30 per cent based on the soaring inflation.

They say Pakistan had a better Gini Coefficient than India till the 1990s. Now Pakistan is classified among countries with Gini Coefficient ranging from 0.30 to 0.34 depicting huge inequality in society. India’s Gini Coefficient ranges from 0.35 to 0.39. (Gini Coefficient of zero indicates complete inequality and one depicts complete equality).

Constant increase in imports after over 20 per cent decline in the rupee is a dilemma which has surprised most economists who say Pakistan is perhaps the second country after the US which has seen its trade deficit widen irrespective of the value of the currency at that time. The US, however, bears a huge trade deficit because its foreign exchange inflows are three times its trade gap and it ends up with a huge current account balance.

Pakistan’s foreign exchange reserves are depleting and except for workers’ remittances from abroad other inflows are too low to cover its huge trade deficit.

Economic experts point out that every country in the world devises a trade policy which benefits the local industry. The US has average import tariff of less than five per cent but its import duties on textile products from Asian economies range from 11 to 25 per cent. This has been done to protect the labour-intensive clothing industry.

The economists say import duties on textile products from high-cost Western European countries are either zero or a little higher according to the prices of apparel which does not hurt their high value-added clothing industry.

The trade regime in Pakistan is operated in such a way which encourages imports and discourages local industry. Pakistan is the only major cotton-producing and textile-based economy in Asia where imported clothing and fabrics dominate local markets because of a flawed import regime. They point out that smuggling is another major menace which could only be controlled if those monitoring border checkposts are made fully accountable.


um@ir

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Re: Latest News
« Reply #2 on: October 07, 2008, 09:28:32 AM »
S&P downgrades Pakistan further into junk territory

HONG KONG: Standard & Poor’s cut Pakistan’s sovereign rating further into junk territory, saying the country’s worsening external liquidity may imperil its ability to meet about $3 billion in upcoming debt obligations.

The widely expected action comes after Pakistan said on Saturday its foreign reserves fell $690 million to $8.1 billion in the week ended September 27, an announcement that helped send the Pakistani rupee to a record low against the dollar on Monday. The country’s central bank, the State Bank of Pakistan, said its reserves fell to $4.7 billion from $5.4 billion previously, representing a little over two months of import cover.

S&P’s downgrade of Pakistan was its second this year, as the country faces the prospect it will default on its debt due to dwindling foreign currency reserves. Foreign investor confidence in the country has also been dented amid worries urgently-needed economic reforms will be delayed in a year plagued by political and security concerns.

S&P on Monday lowered its foreign currency debt rating on the country to CCC-plus from B, just several notches above a level that would indicate default. Pakistan’s local currency debt rating was lowered to B-minus from BB-minus. The ratings agency noted Pakistan will require external assistance in meeting its debt obligations, which includes $500 million in dollar bonds maturing in February, but expressed concern about whether it could count on the help in time.

S&P also noted the uncertain political situation and social tension cast doubt about whether the government would have the ability to adopt the appropriate policy measures. “The rating on Pakistan could be lowered further if the foreign exchange reserve cushion continues to shrink and meaningful economic stabilization measures remain wanting,” S&P warned in its statement.

Rival credit agency Moody’s Investors Service last month cut its outlook on Pakistan’s debt to negative from stable, citing similar reasons, though it maintained its ratings at B2. The cost of protection against a default in Pakistan’s sovereign debt trades at 1,800 basis points, according to its five year credit default swap , a level that indicates investors believe the country is already in or will soon be in default. An investor would thus need to pay $1.8 million annually to insure against $10 million of Pakistan’s sovereign debt.

TOUGH OUTLOOK: Pakistan is in fast need of cash. According to S&P’s estimates, the country’s $4.7 billion in net foreign reserves at the central bank marked a 67 per cent plunge from a year ago. Its current account deficit is also running well ahead of target, reaching $2.5 billion in July and August. That means that in just the first two months of the new fiscal 2009 year, Pakistan’s shortfall reached 1.6 per cent of gross domestic product, or more than a quarter of the government’s full-year target of 6 per cent of GDP.

Though the Asian Development Bank said last week it approved a $500 million loan to help Pakistan, the country will need far more money than that according to analysts. A senior adviser to the government said last month the country would need $7 billion in total to cover its projected current account deficit of $14 billion for the fiscal year, of which it needed $3 to $4 billion upfront.

According to a Citigroup report last week, Pakistan is losing about $1 billion of its foreign exchange reserves a month, at a time when the prospects of raising money whether through asset sales or international bonds have become very difficult in the midst of a global financial crisis.

“At this juncture, Pakistan does not appear to have the financial sources to service its near-term amortizations, including the $500 million maturing Eurobond in February,” the analysts said in the report. Those maturing bonds were trading at 44 cents to the dollar before S&P’s sovereign downgrade.

Offline Farzooq

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Re: Latest News
« Reply #3 on: October 07, 2008, 09:59:15 PM »
pm will announce expansion in cabinet soon

Laooo shaukat tareen finance minister and some hopes for kse
TOP PICKS
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moonnightingale

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Re: Latest News
« Reply #4 on: October 07, 2008, 10:24:43 PM »
When it is expected that Market will recover. As far as my prediction, it will take a year or so. So forget all ur stocks :(

um@ir

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Re: Latest News
« Reply #5 on: October 08, 2008, 10:04:39 AM »
Economists say Pakistan not going to default

RIZWAN BHATTI
KARACHI (October 08 2008): Economists have rejected the impression that Pakistan is going to default, saying that it has the ability to lure huge foreign inflows and pay off its debts. They said that despite the declining trend in the country's foreign reserves, it is expected that country has ability to bring huge foreign inflows from some international financial institutions to meet its requirements.

"Now-a-days rumours of Pakistan's default is on rise due to the balance of payment and liquidity difficulties, many questions have been raised over Pakistan's ability and willingness to honour its upcoming 500 million dollars, Euro bond debt obligation," they said.

They, however, made it clear that there is not a single chance of default and we believed that country is still in a position to fulfil its commitments with the foreign institutions.

On October 6, 2008 Standard & Poors has revised down Pakistan's credit rating from B to CCC+, the second downward revision since January 2008. Rising external vulnerability on the back of a thin liquidity cushion is the primary cause of the rating adjustment.

"We believe the recent 500 million dollars disbursement from ADB, encouraging statements from the World Bank, and the formation of the Friends of Pakistan consortium led by G-7, China and Middle-Eastern countries will at least help Pakistan to honour upcoming debt obligations and the balance of payment financing crisis," said Muzamil Aslam, an economist.

He said that still the IMF also has not closed its doors on Pakistan for financial assistance and a risk to this exceptional financing is Pakistan's relationship with the US, which has been under some strain recently. A rating downgrade reduces a country's ability to tap money through remittance securitization bonds, slowing down the rate of foreign investment and privatisation, Muzamil said. He said that S&P step could further raise concerns over external liability and prompt dollarization and speculation in the forex market.

um@ir

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Re: Latest News
« Reply #6 on: October 08, 2008, 10:35:41 AM »
Iran ready to provide electricity: joint shipping company proposed

RECORDER REPORT
ISLAMABAD (October 08 2008): Iranian Ambassador Mashallah Shakiri said that his country was ready to provide electricity to Pakistan and the Iranian government had adequate capacity to carry out development projects. Shakiri also proposed to establish Pak-Iran Joint Shipping Company that would enhance connectivity leading to increase in bilateral trade.

He said this during a meeting with Deputy Chairman Planning Commission (PC), Salman Faruqui. The two sides agreed that bilateral co-operation in various sectors of economy like energy, railways, roads and trade would be enhanced.

The Iranian envoy apprised that Iran was already working on Sahara hydel power project on the river Chenab and had raised its capacity from initially proposed generation capacity of 65 mega watts to 130 MW through Independent Power Producers (IPPs). He said that the present volume of trade between the two countries showed that the bilateral trade potential was untapped. The volume of trade between Iran and other regional countries is significantly higher than trade between Pakistan and Iran.

According to him, one of the main problems was lack of physical as well as institutional connectivity between the two countries. He also showed his country's interest in enhancing the co-operation in banking sector by opening up branches of banks in each other's countries on reciprocal basis.

Deputy Chairman PC said that Pakistan was interested in importing electricity from Iran as Pakistan was currently facing power shortage. He suggested bilateral negotiations to work out the modalities related to pricing and transmission. He appreciated the proposal to establish a Joint Shipping Company to boost maritime co-operation and mutual trade and promised to examine the proposal. Pakistan National Shipping Company (PNSC) would be asked to look into this matter, he further said.

Faruqui also underlined the importance of modern railroad between Quetta and Taftan. For this purpose, he said that funds could be raised together with Iran and by using the forum of Economic Co-operation Organisation (ECO) or Islamic Bank. Both the sides agreed to increase co-operation in health services and pharmaceutical sector as well. Faruqui informed Shakiri that PC had good mutual relationships with its Indian and Chinese counterparts and it wanted the same level of institutional interaction with its Iranian counterpart.

Shikri appreciated this proposal and assured that Iran would welcome this institutional linkage that would further enhance business to business contacts for regional development.

Offline Admin

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Re: Latest News
« Reply #7 on: October 08, 2008, 02:15:25 PM »
SBP injects $100 million in market
  Updated at: 1355 PST, Wednesday, October 08, 2008   
   KARACHI: The State Bank of Pakistan (SBP) has injected U.S. $100 million in inter-bank market to stabilize value of rupee against dollar.

SBP spokesman, Syed Waseem Uddin told Geo News that central bank intervened in inter-bank market to stabilize the value of rupee against dollar. He, however, declined to comment on value of dollars injected in inter-bank market.

According to Forex market sources, the dollar was being traded at Rs78.50 in the inter-bank and at one point its value hit Rs80. In result, the central bank injected $100 millions in the market.

The dollar is now being traded at Rs79.55 after the central bank’s intervention. 

Offline Honda 125

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Re: Latest News
« Reply #8 on: October 09, 2008, 09:36:04 AM »
No let-up in rupee slide
 
 
 
Thursday, October 09, 2008
By Shahzad Anwar

KARACHI: The rupee slid-down to a record low of Rs80.30 to US dollar in interbank market on Wednesday due to continued pressure from import payments amid multiple problems that shacking economic confidence.

Market sources said that after State Bank of Pakistan (SBP) intervention sentiments driven forex market slightly calmed-down. However, SBP remained tight-lipped regarding fresh volume of dollars it sold in interbank market. Banking sources said that SBP might sell $100 million in interbank market, which helped rupee to recover some grounds before trade closed.

After depreciating almost 2 percent as compared to Rs78.69 on Tuesday rupee finally closed at Rs79.55 at buying and Rs79.65 on selling counters in interbank market. National currency has lost almost 23.3 percent so far this year.

The shortage of dollars in the kerb market was even more acute as the rupee-dollar exchange rates plunged to Rs80.30 at buying and Rs80.50 on selling before day trade closed.

In order to stabilize forex trade the central bank has been intervening in forex market periodically since last few months but failed to control steady fall in rupee amid insufficient forex reserves.

The State Bank, with less than $5 billion, has just enough foreign currency to cover two months of imports.

In a same move SBP in a meeting with heads of exchange companies on Wednesday advised them to ensure uninterrupted supply of cash foreign currency to their customers. Besides SBP also assured exchange companies of its support in case of any liquidity requirement.

The market remained under grip of rumours, however, SBP also categorically denied rumours regarding the freezing of foreign currency accounts and sealing of lockers at banks. In a bid to restore confidence, State Bank of Pakistan Governor Shamshad Akhtar said in a statement late on Tuesday that the country’s banking system was resilient enough to withstand market shocks and the adverse macroeconomic situation.

“There should not be any cause for concern about the stability of the banking system in the coming days,” she said, adding that capital adequacy was well above the minimum required.

Despite her reassurance, call rates went hit 38 percent on Wednesday, partly due to depositors’ withdrawals ahead of last week’s Eid ul-Fitr festival.

Dollar vanishes from Lahore: The US dollar disappeared in open market on Wednesday amid storm of rumours, our Lahore correspondent adds.

The greenback was in short supply in Lahore’s open currency market from the start of trading but was completely unavailable after rumours of financial institutions and country defaults.

The dollar opened Rs79.40 and 79.80 on buying and selling counters and continued to move upwards and finally closed at Rs80.00 and Rs80.50 on buying and selling counter after registering an increase of 70 and 85 paisa respectively.

Offline Honda 125

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Re: Latest News
« Reply #9 on: October 09, 2008, 09:37:21 AM »
Default rumours shake country
 
 
 
Thursday, October 09, 2008
By our correspondent

LAHORE: The country on Wednesday was in grip of rumours of default of few top financial institutions on Wednesday.

The rumours were so strong that even the people directly related with the banking and insurance were trying to get information.

The rumours were active that United Bank Limited, Bank Alfalah, International General Insurance (IGI) have defaulted after the US and European financial crisis.

Financial experts said that rumours of banks’ and insurance companies’ default is the result of the strict monetary policy of State Bank of Pakistan (SBP).

They said that increase in the mandatory Cash Reserve Ratio (CRR) and Statutory Liquidity Requirement (SLR) is playing vital role in the liquidity crunch faced by the banks.

Compelled to keep CRR and SLR limits to intact cash strapped banks were heavily relying on overnight lending.

The rates banks charged each other for overnight lending used to be near or less than SBP’s discount rate of 13 per cent that shot past 50 percent this week and simmered down to 15-20 per cent on central bank intervention.

They said that current Pakistan’s stock market crisis is also due to the increase in the rate of interest by the SBP. They said that if the central bank will not relax monetary policy liquidity crunch in the financial sector would further worsen.

Another rumour was also active that the SBP has frozen the foreign currency accounts on the instructions of the federal government. The rumour was strengthened with an argument that country foreign reserves are depleting quickly and capital flight continues, thus the federal government has made the decision of freezing foreign currency accounts in order to prevent the capital flight and maintain its foreign currency reserves.

Following the rumours of freezing the lockers and bank defaults, the people withdrew huge amount from their accounts.

The great rush of account holders was witnessed in the branches of two banks where long queues of accountholders were seen. Cash shortage reports were also received in some branches of Bank Alfalah in Lahore where branch mangers had refused to clear cheques.

The banking sector people were more worried than the general public. They feared that if these financial institutions defaulted they would be unemployed.

Shockwaves were running across Pakistan’s banking, insurance and the corporate sector.

People working in these three institutions contacted their head offices to confirm about the status. Employees working in other insurance companies and banks also contacted their friends working in these three institutions to confirm the rumours.

People also contacted central bank officials to get fresh information about the status of the banks. The SBP as regulating authority of banking industry has the final say in banks’ defaults.

On the other hand the general public called newspapers and TV channels offices to confirm the rumours of financial institutions defaults.

Offline Honda 125

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Re: Latest News
« Reply #10 on: October 09, 2008, 09:40:03 AM »
Rs161bn withdrawal from banks sparks dollar demand
 
 
 
Thursday, October 09, 2008
By Mehtab Haider

ISLAMABAD: A huge cash withdrawal of Rs161 billion from depositors’ accounts of commercial banks from July 1 to September 20 has pushed up dollar demand and sparked capital flight estimated to be worth $500 million to $1 billion. This has worsened economic crisis, resulting in a fall of the rupee against the dollar, it is learnt.

The rupee ended at Rs79.80 against the dollar on Wednesday after recording a record low of over Rs81 in the open market.

State Bank of Pakistan (SBP) reportedly injected $100 million in order to ease the demand of dollar, which resulted in a slight recovery of the rupee. But market sources say that the central bank did not inject up to $100 million and it intervened by injecting only $20 to $30 million, which helped the rupee recover slightly at the end of the day in the inter-bank market. The buying of dollar was at Rs79.70 while selling was at Rs79.80 at the end of day.

“We expect that the SBP will continue to intervene in the market on Thursday in order to meet dollar demand,” a market source said and added that the central bank wanted to keep rupee-dollar parity within the range of Rs80 in the open market.

Referring to the pressure on money market rates, governor State Bank of Pakistan said in a statement on Tuesday that these mainly pertain to seasonal factor of cash withdrawal for Eid festival. In order to meet their expenditure requirements for Eid preparation, the depositors tend to withdraw large sums from the banking system, creating a liquidity crunch for a few days after Eid. This situation, however, reverses in due course after Eid as the withdrawn funds ultimately retract to the banking system.

When an SBP spokesman was contacted for seeking his comments on withdrawal of Rs161 billion from depositors’ accounts in two months and 20 days, he refused to share any further information in that regard. When he was asked how much money was withdrawn from depositors’ accounts in the same period of the previous fiscal year in order to do comparison, he said, “you will have to rely upon the statement of the governor SBP which was issued yesterday and nothing more can be shared in this regard.”

However, another official who is affiliated with the SBP said that there was pressure on cash withdrawal from depositors’ accounts and this situation would normalise in the next 15 days. “There is nothing unusual in this regard,” he said and added that one should keep in mind the monetary growth while making any analysis.

Sources said capital flight continues unabated especially to the Gulf region in the housing sector and around $50 million are being invested every week.

Talking to this correspondent, a Planning Commission high-up said that he proposed to the government to offer higher rates of dollar to those who are holding it in their individual capacity in order to replenish dried dollar reserves. “We can ask people to submit their dollars and get rupees at higher rates,” he said and added that he was fully confident that the government could generate $1 to $3 billion easily.

Offline Honda 125

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Re: Latest News
« Reply #11 on: October 09, 2008, 09:41:01 AM »
IMF says Pakistan’s economic situation is fragile
 
 
 
Thursday, October 09, 2008
By Mehtab Haider

ISLAMABAD: Estimating Pakistan’s financing gap at $7 billion in the current fiscal year, the International Monetary Fund (IMF) has said the country’s macroeconomic situation is very fragile and further significant losses in reserves would make it vulnerable to a crisis.

IMF Macroeconomic Assessment Letter about financial health of the country’s economy given to the Asian Development Bank on September 28, which paved the way for the release of $500 million, states that IMF’s staff preliminary projection for 2008-09 based on a continuation of the prevailing monetary policy stance, expected external financing and revised oil prices, saw external current account deficit of $14 billion (7.7 per cent of GDP).

With capital inflows of about $7 billion, the IMF staff estimates external financing gap of $7 billion. “Given the difficulties involved in forecasting capital inflow in an unsettled macroeconomic environment, this financing gap is subject to a high degree of uncertainty,” the fund further states.

The fund staff believes that tax revenues should be increased by at least 3-4 per cent of GDP over the medium term (from 10pc of GDP in 2007-08) by broadening the base of the general sales tax to services, taxing commercial agriculture under the income tax, eliminating other tax exemptions and significantly strengthening tax enforcement. On prospects of real GDP growth for 2008-09, the IMF says that GDP growth is expected to slow further to about 4.5 to 5pc in the current fiscal year while average inflation is projected to increase to 16 to 17pc owing in part to the envisaged pass through higher international prices of energy and food.

The country has set inflation target at 12pc for 2008-09. Recently, the country’s authorities specified their policy plans for the current fiscal year and stressed their commitment to addressing macroeconomic imbalances and putting the economy back on a sustained path.

Moreover, following the recent increases in the discount rate and the adoption of policy of greater exchange rate flexibility, the authorities indicated that the SBP stood ready to take further actions in this direction, as needed. The authorities also committed to meeting the government’s domestic financing needs through market based instruments and ensuring that both borrowing from the SBP is zero on a net basis at the end of each quarter, the IMF noted.

The authorities have taken some measures to by adjusting fuel and electricity prices as well as slowing down the development spending, further measures are required to achieve the target of reducing the fiscal deficit to 4.7pc of the GDP.

On the expenditure side, the IMF says, the authorities need to move ahead with planned increase in electricity tariff and with larger than budgeted reduction in other outlays to offset the impact of potentially higher interest rates on the government’s debt servicing.

This will require removing other subsidies, containing other non-interest current expenditures and carefully prioritizing development spending, said the IMF.

The authorities should also ensure the implementation of targeted social protection mechanism to cushion the impact of lower subsidies on vulnerable groups.

Regarding revenue generation, the IMF says a stronger than envisaged effort is needed to broaden the tax base by eliminating some tax exemptions.

On the monetary side, the IMF mentioned the recent increases in interest rates have been insufficient to stem reserve losses and eliminate the central bank financing of the government.

If the SBP follows guidelines outlined by the IMF, rupee will further depreciate against dollar in coming days, said market analysts. The IMF says looking beyond 2008-09, a further fiscal effort, together with continuation of tight monetary policy and exchange rate flexibility, will be required to notch a sustainable current account position and bring down inflation.

In particular, strong tax and policy administration measures will be necessary to further reduce the fiscal deficit.

Offline Honda 125

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Re: Latest News
« Reply #12 on: October 09, 2008, 09:43:47 AM »
Economists unhappy with finance adviser
 
 
 
Thursday, October 09, 2008
By Mansoor Ahmad

LAHORE: Pakistan peoples Party has followed the footsteps of Gen (R) Musharaf by appointing a banker as Pakistan’s finance manager to clean the highly infected balance sheet of the economy.

Shaukat Tareen who, as adviser to Prime Minister on Finance, would act as de facto Finance Minister of the country would be the second economic head of Pakistan who in the past was associated with the CitiBank group.

Though most of the economists have reservations about the economic policies pursued by former finance minister and prime minister Shaukat Aziz but it seems that even then the ruling party has decided to give chance to another banker.

Some experts sympathize with the ruling party that seems to have no one among its ranks to look after the sickly economy.

They said with such dearth of talent Tareen as a technocrat seems to be a better choice than the incumbent Finance Minister Naveed Qamar. They however warned that the new finance minister should not try to run the country as a corporate entity. They said managing economy of a country is a cumbersome job particularly when all the macro-economic indicators are on sharp decline.

They said bankers usually try to clean the balance sheet and are ruthless in this regard.

The banking spread in the country increased at a time when the economy of the country is on decline. Banks in fact are perhaps the only high profit-making entities in the corporate sector. Senior economist Naveed Anwar Khan warned that finances of the country can not be run like a corporate entity. There are vulnerable groups that have to be taken care of. He said the present economic situation demands painful decisions.

He said the balance sheet of the country could be cleaned either by increasing indirect taxes or by bringing the tax evaders into tax net. He said levying indirect taxes would be an easy option and any banker would jump for it. However, he enunciated this is an inhumane option as well.

He said the present regime has been exactly doing the same. This, he said, is evident from the fact that federal taxes have shown growth of over 23 per cent in the first quarter of this fiscal. The economic woes have continued unabated.

He said poorer segment of the society has become poorer while rich are adding more wealth.

Khan said the other option of bringing tax evaders into tax net needs strong political will because many in the ruling party would also be trapped. He said a banker would like to go for an easy option that could clean the balance sheet quickly while a prudent economic manager would be more humane and go for a lengthy path to ensure sustainable growth. 

um@ir

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Re: Latest News
« Reply #13 on: October 09, 2008, 01:32:48 PM »
Pakistan’s rich invest $100m in Dubai show


By Sabihuddin Ghausi


KARACHI, Oct 8: More than 100 Pakistan’s super rich persons — stock brokers, bankers, textile tycoons, cement barons, builders and developers, retired civil and military bureaucrats and practicing professionals (doctors, chartered accountants and lawyers) — are said to have invested more than 100 million dollars (Rs7.5 billion) in booking construction projects during the last two days in the UAE Cityscape exhibition being held in Dubai.

This report of outflow of capital from Pakistan to Dubai construction business is being brought by a few businessmen who participated and visited the Cityscape being held at Dubai International Exhibition Centre from Oct 6 to 9.

Cityscape is said to be the biggest exhibition event of construction business anywhere in the world and attracts investors from all corners.

“More than 40,000 visitors from all around the world, including a good number of Pakistanis, thronged the exhibition place in the last two days and booked their investment for projects in the offices of the construction companies,’’ a top Pakistani builder who is a regular visitor for the last seven years said on Wednesday.

The exhibition was initially scheduled to close on Wednesday but has been extended till Thursday because of big response from investors from all around the world.

Over one billion dollars investment is said to have been made in the last two days in booking of construction projects.

The returning visitors from UAE Cityscape exhibition to Karachi estimate the final investment figures will exceed $2.5bn, of which “at least 10 per cent will be from our Pakistani investors.”

Sponsors of the UAE exhibition include over a dozen world’s top construction companies that operate on global level. One of these companies was given a contract for development of 4,000 acres of sea front in Karachi which evoked a considerable protest from human right activists as project involved dislocation of thousands of poor fishermen and other people from coastal areas.

A well known high profile stock broker from Karachi announced the launching of 16 towers construction project in the exhibition in the name of his close relative.

The outflow of capital from Pakistani goes on unabated for the last several months amid reports of deepening crisis of financial sector and wild rumours on viability of few banks in the country.

“It is yet to be seen if the statement given on Tuesday by the Governor of State Bank of Pakistan is able to revive sagging confidence of people in banks and financial sector,’’ the businessman said.

Estimates of capital outflow from Pakistan, mostly to Dubai, in the last 10 to 11 months after Nov 3, 2007, emergency promulgation varies from $30 billion to $4 and 5 billion.

A top builder is convinced of massive outflow of $30 billion which is almost 20 per cent of Pakistan’s total economy.

A few economists hold stock brokers from taking out hot money which in any case should not be more than four or five billion dollars.

Businessmen say whatever is the amount of capital outflow from Pakistan in the last 11 months, the main reason for this financial haemorrhage is government’s inability to create a sense of security among its citizens and investors.

“In the last eight years, we had Shaukat Aziz as finance minister and prime minister,’’ the builder said who pointed out that after ceasing to hold any office of authority Mr Shaukat Aziz is no more in Pakistan.

He never brought back his assets in Pakistan. Even the present elected leaders have their property in Dubai, London and New York and may be in many other parts of the world.

Let these leaders bring back their assets to Pakistan where they rule and command people to create confidence in businessmen.

“Such a gesture from elected leaders will be more convincing and effective rather than a statement from Governor of State Bank of Pakistan or any state functionary,’’ he declared.

Many top Pakistani business houses have shifted their offices in Dubai and are involved in roaring cross-country trade.

A few Pakistani businessmen are jointly working with Indians in business and making good money. Back home in Pakistan, there are many hurdles in doing business with India and with Indians.

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Re: Latest News
« Reply #14 on: October 09, 2008, 10:28:28 PM »
Jaadu: The First iPhone App From A Pakistani Developer



Here’s an opportunity one doesn’t get often. Meet brilliant young Jahanzeb Sherwani, the first developer from Pakistan whose application has been accepted into Apple’s iPhone App store! Yup that’s right - I did say Apple’s iPhone App store. Where are those cynics who continue to claim that there is nothing innovative coming out of Pakistan?
T2F promises that this will be a magical and exciting evening devoted to developing applications for the iPhone. Wow! All you budding developers out there - or even those experienced ones who have been looking at developing for the iPhone - this is certainly an opportunity  not be missed.
Jaadu is a groundbreaking application for the iPhone and iPod touch that lets you control your computer from wherever you are in the world.

Jahanzeb is not only going to show us how Jaadu works, he will talk about life as an indie iPhone developer and his experience in selling applications through the App Store. He has  especially expresed a desire to guide other budding developers and entrepreneurs who are interested in pursuing similar opportunities.  Does it sound like a dream come true? Well, I think it is and so should you.

Jahanzeb is a final year PhD student at Carnegie Mellon University and is working on speech interfaces for emerging markets in South Asia. He believes speech interfaces can be a revolutionary medium of interaction for a massive cell-phone consumer base that has, for the most part, not been able to tap into the digital revolution.
Over the past year, he has worked with HANDS (a Pakistani NGO) to design, develop and test a telephone-based spoken interface in Sindhi for health information access by low-literate community health workers. This should inspire many who are interested in the use of technology for development.
Jahanzeb received his undergraduate degree from LUMS, where he studied computer science and social sciences, and also co-founded the LUMS Music Society. Those who are regulars at T2F might have caught him there playing John Lennon’s “Imagine” on his guitar. A truly multi-faceted, multi-talented young man. Let us go meet him at T2F.

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Re: Latest News
« Reply #15 on: October 10, 2008, 08:59:47 AM »
Islamabad to withdraw power subsidy, eliminate circular debt, restructure PASSCO, enact new SBP Act by 2010

Friday, October 10, 2008
By Mehtab Haider

ISLAMABAD: Pakistan and the ADB have signed official documents for loan facility of $1.8 to $2 billion over next two years under which Islamabad will have to withdraw power sector subsidy by passing on whole burden to consumers, elimination of circular debt of power sector, raising support and procurement price of wheat to market level and enactment of new SBP Act till June 2010.

The Asian Development Bank (ADB) has recently released a tranche of $500 million to cash-starved Pakistan under the Accelerated Economic Transformation Program. The Finance Minister of Pakistan and the President of ADB signed the agreement. A copy of the 114- page document is exclusively available with The News.

According to official document Pakistan has accepted the ADB’s condition to put in place market based wheat pricing and efficient reserves management by increasing support price to at least 80 per cent of import parity level by June 2009 and support and issue price of wheat be raised to market level till June 2010.

Pakistan and ADB also agreed that wheat reserves be set at three months of national annual average consumption requirements; and pursuant to this, administrative restrictions on domestic movement of wheat eliminated.

It was also agreed between both sides that the operational reserves for wheat should be eliminated and the strategic reserves capped at two months of annual average national consumption requirements as well as restructuring of PASSCO and the provincial food departments and directorates completed till June 2010.

The document states that the PPP government obtained Parliamentary approval to reduce electricity subsidies through: (i) elimination of generalized sales tax subsidies for all domestic consumers and up to 500 units for commercial consumers; (ii) introduction of automatic monthly fuel price adjustments through a surcharge; and (iii) introduction of an additional surcharge to be levied on all consumers to reduce the gap between determined and notified tariffs.

Work on estimating power sector debt overhang and circular debt has been initiated. Pakistan accepted that the circular debt in the power sector should be eliminated and the overall debt liabilities adequately settled while differential between the determined and notified tariff eliminated to reflect the actual cost of supply of power to end consumers (except lifeline households).

The document states that all past electricity subsidy payments worth Rs133 billion for financial year 2008 was fully settled, and Rs88 billion allocated in the FY2009 budget to partially cover the difference between determined and notified tariffs [for FY 2009].

The State Bank of Pakistan (SBP) has launched work on a new Central Bank Law that provides for greater autonomy and accountability of SBP in its monetary and financial policies, effective regulation and supervision of financial institutions under its oversight, and clarity in the role of SBP in financial safety net and lender of last resort functions. Both the ADB and Pakistan agreed that new SBP act enacted and key provision implemented by June 2009.

Payments Systems and Electronic Funds Transfer Act (2007) enacted, Real-Time Gross Settlement (RTGS) system launched and Centralized online system for retail payment systems established. Both sides agreed that RTGS fully rolled out and retail payment systems being implemented. Consumer Protection Department established in SBP and work launched on a Consumer Protection Law and it would be enacted by June 2009. Deposits Protection Scheme would be launched by June 2010.

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Re: Latest News
« Reply #16 on: October 10, 2008, 09:00:34 AM »
SECP notifies rules for takeover of companies
 
 
 
Friday, October 10, 2008
By our correspondent

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has notified Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations 2008 to further strengthen the legal framework pertaining to takeovers of listed companies and minimise price manipulation and insider trading.

According to an SECP news statement issued here on Thursday, the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations 2008 (or Takeover Regulations) have been framed under Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance 2002.

The takeover regulations are an endeavour to minimise price manipulation and insider trading and require disclosures by the target company on possibilities of its acquisition to the stock exchange. Similarly, the takeover regulations specify the timing of public announcement of intention to purchase shares of the target company beyond the specified threshold.

In addition, the takeover regulations also prescribe the circumstances and procedures for withdrawal of public announcement of intention and of offer for purchase of shares.It also stipulates the size of offer, mode of payment to shareholders on acquisition of shares and form/nature of security for performance of obligation under the public offer.

Further, guidelines have been provided to the acquirer, the target company and the manager to the offer on the contents and form of various statutory documents such as public announcement, public offer, offer timetable, etc required under the Takeover Ordinance and Regulations through the various schedules attached to the Takeover Regulations.

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« Reply #17 on: October 10, 2008, 09:01:53 AM »
KSE’s floor future linked to Tareen’s US trip
 
 
 
Friday, October 10, 2008
By Salman Siddiqui

KARACHI: Karachi Stock Exchange (KSE) has postponed its Board of Directors meeting, which was scheduled for Friday, Oct 10. The meeting was supposed to announce an advance date for removing floor or the shares price-freeze from the market.

One of directors told The News that KSE would wait for Shaukat Tarin, the newly appointed advisor to Finance Minister, who left for US on Wednesday night. And the new date for Board meeting also depends on his 10 days visit.

KSE Board of Directors is likely to meet after Tarin’s return or they might meet if Tarin gives some hints to KSE management as to what would be the likely outcome of his visit and what KSE should do under current circumstances, director explained.

Tarin, who had said that putting floor at KSE was a wrong decision of Exchange and wished to remove it as soon as possible, has given a new hope to the nation. He, before his departure for US, gave an emotional talk to media about reviving the country’s falling economy in the days to come.

Another director questioned that why should they hold the Board meeting when they had no agenda for. They were still making efforts to take some concrete measures before the floor was removed, he added.

Also, no formal or informal General Body meeting of KSE members took place, which was scheduled for Thursday, Oct 09. Some 15 to 20 members assembled at Exchange premises, but returned to their homes without forwarding any recommendation to the Board, directors added. But linking new date for Board meeting with Tarin’s US visit was the outcome of 15 to 20 members informal meeting perhaps.

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« Reply #18 on: October 10, 2008, 09:14:13 AM »
Suspected US missile strike reported in Pakistan By ISHTIAQ

MAHSUD, Associated Press Writer
1 hour, 56 minutes ago
 
DERA ISMAIL KHAN, Pakistan - A suspected U.S. missile strike targeted two areas in a Pakistani tribal region near the Afghanistan border on Thursday, killing at least nine people, Pakistani intelligence officials said.

Also Thursday, bombings targeting police killed 10 people and wounded 14 in Pakistan's volatile northwest and the capital — reminders of the challenge facing the country as its lawmakers pursue a national anti-terror consensus.

The alleged missile strikes appeared to be part of a surge in U.S. cross border assaults from Afghanistan on alleged militant targets in Pakistan, which have strained ties between the two anti-terror allies.

One missile strike occurred at a house in Tappi village in North Waziristan tribal region. Some of those killed were believed to be foreigners, said two local Pakistani intelligence officials, citing reports from informants and agents.

A local tribesman, Shoaib Dawar, said Taliban militants surrounded the house. He said drones were heard in the area before the strike.

A second alleged strike was reported at a house in the village of Dande Darpa Khel. The site was near a seminary of veteran Taliban commander Jalaluddin Haqqani, considered an archenemy of the U.S. No casualties were immediately reported.

The intelligence officials requested anonymity because they were not authorized to speak to the media. The army could not immediately be reached for comment.

U.S. Defense Department spokeswoman Eileen Lainez said "I have no information on any alleged strike."

Al-Qaida and Taliban militants have used Pakistan's tribal areas as bases from which to attack U.S. and NATO forces in Afghanistan, spurring U.S. frustration with Pakistan. The tribal regions also are considered potential hiding places for al-Qaida leader Osama bin Laden and his deputy Ayman al-Zawahri.

Pakistani officials have protested that such strikes violate the nation's sovereignty. The U.S. rarely acknowledges such missile strikes. Some of the strikes are believed to be carried out by the CIA, which is said to use Predator drones.

In the bombings Thursday, one attack, an apparent suicide car bombing, occurred in a police complex in Islamabad. It wrecked an anti-terror squad building and wounded at least four police.

Meanwhile, a roadside bomb struck a prisoners' vehicle in the Dir region near Afghanistan and killed two police, four inmates and four children. Ten people were wounded, said Sher Bahadur Khan, a senior government official.

Pakistan's northwest region bears the brunt of the violence in the country. But in recent weeks, the militants have repeatedly demonstrated their reach extends farther.

In September, a suicide truck bombing of an Islamabad hotel killed 54 people. Security has been beefed up since in the capital, and it was especially high Thursday for a parliament session on finding a national anti-terror strategy.

State media reported that Prime Minister Yousuf Raza Gilani and President Asif Ali Zardari insisted attacks like those Thursday would not deter Pakistan from battling extremists.

But many citizens believe Pakistan's support of the U.S.-led war on terror is what's spurring the violence. The fledgling civilian government has urged Pakistanis to take ownership of the war on terror.

After the parliament session adjourned Thursday, some politicians said they wanted more details on social, economic and other aspects of the extremist threat, not just military operations.

Some complained that much of the data shared had already been released in the media.

The session was set to resume Monday