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CHINA’S INVESTMENTS IN PAKISTAN’S ENERGY SECTOR -- A SIGNIFICANT MOVE
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ISSUE # 21 ----- May 25 - May 31, 2015

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Pakistan faces chronic power shortages due to rapid growth in demand for electricity. Power outages increased significantly due to the widening gap between supply and demand over the past three years. It has adversely affected the industrial output and economic growth of the country. The energy statistics of Pakistan shows that around 50 percent of the need is met by the indigenous gas production and 29 percent by domestic and imported oil and 11 percent by hydro-electricity. The country's annual energy requirements are expected to more than double to 177 million tons of oil equivalent by the year 2020. The country’s indigenous energy resources are still untapped and not helping the country to meet its pressing energy needs........

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PAGE TOP STORIES

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EXCLUSIVE INTERVIEWS
& PAGE SPECIAL REPORTS

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NAYA JEEVAN COMMITTED TO CATALYZE NATIONAL HEALTH INSURANCE, LOW-INCOME SEGMENT TO BENEFIT
INTERVIEW WITH DR ASHER HASAN, CEO & FOUNDER OF NAYA JEEVAN
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Naya Jeevan is Pakistan’s first high-quality ‘health plan for the marginalized’, benefiting communities that have traditionally been deprived of access to affordable, quality healthcare including informal domestic workers (maids, drivers, guards, cooks, etc), factory workers, workers in corporate value chains (suppliers, distributors, SME retailers and micro-retailers).
At Naya Jeevan, our belief is that ‘prevention is better than cure’; therefore our health plan has a huge emphasis on preventive/promotive health services......

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THE IMPORTANCE OF RESPONSIVE WEBSITE DESIGN IN TODAY’S WORLD
INTERVIEW WITH AMMAR MAQSOOD -- CEO DESTIN SOLUTIONS
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Mobile users have different objectives than desktop users and typically this means they want information in quick, easily digestible bites. Customers report that their mobile purchases are often impulse buys and some statistics show that mobile users spend more money per purchase than customers do on desktop websites.
This underscores the importance of optimizing your mobile experience to match a visitor's needs and behaviors in the context of how they will most likely be browsing your website.....

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OIL PRICES
OIL WEEKLY BASKET PRICE

 (US Million $)
PERIOD PER BARRELS
May 22, 2015 61.72
May 15, 2015 62.83
May 11, 2015 63.03
May 8, 2015 63.57
May 1, 2015 61.37
Apr 24, 2015 59.30
Apr 17, 2015 57.44
Apr 10, 2015 53.93
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PREVIOUS ISSUES

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PAKISTAN WEATHER
3 DAYS FORECAST

  MIN MAX HUM% FORECAST.
KARACHI
SUNDAY 28 36 62 sunny
MONDAY 28 35 64 sunny
TUESDAY 28 36 65 cloudy
LAHORE
SUNDAY 27 44 18 sunny
MONDAY 27 44 16 sunny
TUESDAY 25 43 12 sunny
ISLAMABAD
SUNDAY 22 36 31 cloudy
MONDAY 18 36 29 sunny
TUESDAY 20 37 23 sunny

updated: Sun-Tue, May 24 - 26, 2015

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COVER STORY

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CHINESE INVESTMENT IN NUCLEAR POWER PLANTS K2 & K3 TO ADD 2200MW TO NATIONAL GRID
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Over 35 percent of the total energy produced in Pakistan is generated through oil-fired system, which is the most expensive mode of power generation in terms of money while emitting carbon dioxide to damage the environment means that we are burning our candle from both ends. On one hand we are spending over $16 billion on import of oil for power generation to produce power at an unaffordable price, which if continued will never allow us to get rid of nasty issue of circular debt besides rendering out exportable products uncompetitive in the world market due to excessive cost of input...

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COVER STORY
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PAKISTAN’S PHARMA SECTOR GROWING HANDSOMELY BUT HEALTH SEVERELY UNDERPERFORMING
INTERVIEW WITH MR SAEED ALLAWALA -- CHAIRMAN PAKISTAN PHARMACEUTICAL MANUFACTURERS ASSOCIATION (PPMA)
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Health indicators in our country are quite poor. Pakistan ranks among the countries with the worst health indicators, since our total expenditure on health as a percentage of the GDP remains amongst one of the lowest in the world that is less than 1.0% as compared to 5-14% in the developed countries. The effectiveness of any country's health sector depends upon the budget owed to it. However, Pakistan only spent less than 1% of its gross national product (GNP) and less than 4% of its gross domestic product (GDP) on health sector.

Besides many loop holes in our health sector, there is still a ray of hope about the future outcome of the current programs, which are running with the collaboration of World Health Organization to improve the health conditions in Pakistan. However, there is a great need of dedication and commitment from the government to take a step forward and make it sustainable. Clear long term vision for health sector can prosper our country's future in health development......

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COVER STORY
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INTEREST RATE DROPS TO HISTORIC LOW AT 7 PERCENT
MONETARY POLICY REVIEW REDUCES POLICY RATE BY 100BPS

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A dramatic cut of 100bps in policy rate for the banking industry bringing the interest discount rate from 8 percent to 7 percent indicates the firm resolve of the government to give a jump start to the economy and also an effort to become the first in financial history by reducing the rate to a historic low in Pakistan.

 

The trade and industry, however, has welcomed the bold decision of reducing the interest rate as the trade and industry has always pleaded a growth based policy rate if the country has to catch up the growth rate of other economies in the region and to achieve the target of 7 percent GDP growth rate in Pakistan......

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COVER STORY
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HUBCO’S SIGNIFICANT PROJECTS, ROLE TO OVERCOME ENERGY CRISIS
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The Hub Power Company is the largest Independent Power Producer (IPP) in the country with a combined power generation capacity of over 1,600MW. The company generates approximately 10 percent of the country’s electricity and is playing an important role in addressing the energy crisis.

It is situated at Mouza Kund, Hub in Balochistan and is one of the most efficient steam turbine-based thermal power plants in Pakistan. It supplies reliable and uninterrupted electricity to the national grid. The company also holds 75 percent controlling interest in Laraib Energy Limited, which owns and operates an 84MW run off the river hydel power plant near the New Bong Escape, 8 km downstream of Mangla Dam in Azad Kashmir.....

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COVER STORIES
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SHIPPING
NEWS

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GIANT CHINESE FIRM TO OPEN NEW SUEZ CANAL WATERWAY
A giant Chinese shipping company is looking forward to the opening of Egypt’s new Suez Canal waterway as it will enhance world trade.
"The new canal will save both time and money," Qin Haipin, liner manager of China Shipping Container Lines (CSCL) in Egypt, quoted as saying last week.
Qin said the geographical position of the Suez Canal makes it the shortest route between East and West.
"This saves time, fuel consumption and ship operating costs and gives us some flexibility in managing capacity," said Qin, whose company has six offices in Egypt........

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PORTS & SHIPPING
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GWADAR PORT: THE ESSENTIAL AND VIABLE PART OF CHINA-PAKISTAN ECONOMIC CORRIDOR
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Gwadar Port, an essential part of the larger economic corridor project, will ultimately link China to the Arabian Sea. Gwadar-Kashgar connectivity through road and rail projects and related activities including trade transactions, goods transportation and storage facilities are likely to develop closer trade and business links among regional states. The CPEC project has implications for whole region including the Gulf countries. The proposed economic corridor will not only enhance trade between the GCC group of nations and southwest Asia, but it will also enable China to secure energy routes through Gwadar, a strategic seaport located in southwestern Balochistan province, near Strait of Hormuz and close to Middle East......

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COVER STORY
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RESOLUTION FOR ENERGY CRISIS IN PAKISTAN
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Energy is the basic necessity of every citizen of the county. It is unfortunate that power outage has become a norm not only for the people but businesses alike. Production is lost due to energy shortage resulting in plants operating below capacity. The power crisis has resulted in protests and revolts by people who reach the streets to voice their concerns. Urban localities can witness power outage upto 8 hours per day whereas rural areas witness power outage upto 12 hours being a norm. Running day to day chores and managing the household becomes a daily challenge......

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RESEARCH CORNER

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LNG IMPORT CONTRACT WITH QATAR SET TO BE FINALIZED SHORTLY

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Global LNG demand through 2030 could, however, be approximately twice that of the predicted 2012 level of about 250 million metric tons. Japan, South Korea and Taiwan (collectively, JKT) have been in the top business and are predicted to remain the backbone of the worldwide LNG market, while India and China are predicted to be the largest sources of extra LNG demand. Between 2000 and 2012, liquefaction capability greater than doubled, driven mainly by the series of huge LNG expansions in Qatar and the early Australian expansions. The first wave was dominated by Malaysia, Indonesia and Algeria, which still jointly accounted for greater than 60 percent of total LNG capability as presently as 10-year ago, but which are predicted to drop to about 20 percent of total capability through 2020.......

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CAPITAL MARKETS
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COVER STORY
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ALTERNATIVE ENERGY PROJECTS IN PAKISTAN SUGGESTING THE POTENTIAL OF THE NATION
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A number of crises are still being faced by the country. Lack of clean water, poverty, illiteracy and lack of energy are only some of the problems, which Pakistan faces to this day. Such problems are unfortunately the kind which the common masses have to deal with which doesn’t make life very easy for them.
The consumption of energy in Pakistan is dependent upon conventional fuels, which are items of import and with the increase in the international oil prices; fuel for Pakistan too becomes expensive. With the volatile nature of oil prices in the international market as well as the depletion of the country’s natural gas resources, questions are raised regarding the availability of energy in the country and how secure we are as a nation in this regard.
...

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IN THE NEWS

The consumers and producers are bound to feel the heat as the revenue-conscious federal government is planning to convert the existing zero-rated regime on the supply of dairy products into sales tax exemption in the budget 2015-16. Due to hit the floor of National Assembly on the 5th of June, the new federal budget, if passed into law, would see the dairy items incorporating in the Fifth Schedule of Sales Tax Act 1990 through the last fiscal budget, placed in the Sixth Schedule (exempt category)........

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INDIA IN THE NEWS

MUMBAI: Japan's telecoms and internet giant Soft Bank Corp has held talks with Oyo Rooms, a branded budget hotel marketplace, for leading a massive $100 million or Rs 630 crore financing round in the company, people familiar with the matter told TOI. If it goes through, this would be the third institutional fund-raise for Oyo Rooms which has emerged as the largest player in the fast-growing online hotel booking space. Softbank, an existing investor in e-tailer Snapdeal, taxi-hailing service Ola and realty portal Housing, is looking to pick up a 25-30% stake in the startup founded by Ritesh Agarwal, 21, a college dropout, as Oravel Stays three years ago..........

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GULF NEWS

"Dubai Parks and Resorts may hit a new target of Dh1.15 by next week, but it is a risky stock to get in," Al Ashri said. Dubai Parks and Resorts continued its gaining streak for another session to be 2.91 per cent higher at Dh1.06. Deyaar Properties may hit a new resistance of Dh0.97.
Aldar Properties would act as a good support to ADX index to go higher. Aldar Properties may hit a resistance level of Dh3.17/3.44 within few weeks, Al Ashri said. Saudi’s Tadawul ended 0.38 per cent higher at 9,768.09. Tadawul index may hit a new target of 10,144 by next few weeks, Al Ashri said.....

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ANNOUNCEMENT

FAKT Exhibitions (PVT) Ltd. extends its signified portfolio of successive events by organizing the 4th International Energy, Oil, Gas and Power Exhibition and Conference – EGO Pakistan 2015 incorporating Solar Pakistan 2015. The event is scheduled from 29th – 31st May 2015 at Expo Centre, Lahore.
Not long from now the display is required to have about 100 exhibitors from 14 countries and went to by in excess of 10,000 quality guests. The show has effectively affirmed real interest from various international countries. EGO Pakistan 2015 is highly informative, rewarding and provides lucrative business solutions to the associated industry leads......

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COVER STORY
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KE’S OPERATION BURQ – DIFFERENT COMMERCIAL AND RESIDENTIAL USERS
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The power utilities are confronted with a serious issue of power theft as according to a survey at least 35-40 percent of power distributed by the utilities including K-Electric, DISCOS under WAPDA management have to face this huge transmission loss due to illegal connections across the country.
However, one of the major reasons behind this social crime is the high power tariffs, which are loaded with huge taxation taking the price of electricity beyond affordability of the middle income groups. But surprisingly even well off segment of the society as well as some industrial consumers are also involved in this crime, which need to be addressed amicably and not through policing, which also creates a bad impression of governance.
.......

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EXCHANGE RATES
Pakistan Open Market Rates

BUYING SELLING
US $ 103.3 103.55
UK POUNDS 159 159.25
KUWAITI DINAR 337.25 337.5
SAUDI RIYAL 27.4 27.65
UAE DIRHAM 28.15 28.4
CANADIAN DOLLAR 83.5 83.75
EURO 113 113.25
JAPANESE YEN 0.85 0.89

MORE RATES

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COVER STORY
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WIND POWER PROJECTS – ENCOURAGING, HOWEVER A QUESTION IN WAKE OF LNG?
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As per plan, Pakistan is developing wind power plants belts located in Southern Pakistan identified as corridors for wind power plants. The initiative is to provide power to Sindh and Balochistan. Areas identified for the power plants include Jhimpir, Gharo, Keti Bandar and Bin Qasim. One such initiative of the government is China-Pakistan Economic Corridor (CPEC), which will connect Xinjiang with Gwadar Port through road, rail, pipeline whereas the project is estimated at USD 46 billion. Under the CPEC agreement USD 15.5 billion worth of coal, wind, solar and hydro energy projects will add 10,400MW of energy to the national grid of Pakistan.......

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8May15 15May15 22May15
NASDAQ

4,945.54

5,050.79

5,090.79

H.SENG

27,587.36

27,865.17

27,992.83

SENSEX

27,067.55

27,358.75

27,958.76

NIKKEI

19,379.19

19,732.92

20,264.41

CAC-40

4,988.75

5,029.31

5,132.93

DAX

11,460.79

11,559.82

11,835.46

FTSE

6,997.51

6,973.04

7,041.63

S&P

2,088.00

2,121.10

2,130.82

DJIA

17,924.06

18,252.24

18,285.74

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As On May 22, 2015

TENOR

BID

OFFER

1 Week

7.18

7.68

2 Week

6.99

7.49

1 Month

6.91

7.41

3 Month

6.85

7.10

6 Month

6.83

7.08

9 Month

6.82

7.32

1 Year

6.81

7.31

2 Year

6.98

7.48

3 Year

7.18

7.68

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RESEARCH CORNER
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SOLAR ENERGY TECHNOLOGY: A LONG LASTING MOVE TO CHANGE FATE OF CITIZENS
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The power shortfall has been discussed month after month, year after year. What people need desperately are positive results, and it is encouraging to see the present government moving towards these measures and making efforts to overcome all. Economic experts say that the Government of Punjab would conquer loadshedding and the electricity crisis till 2018 for which solar and other energy plants are being constructed and under construction in the province whereas the formal work has been started at Quaid-e-Azam Solar Park and its production would improve to gain 1000MW of power during the next year. Moreover, Punjab government would provide 10 lakh job opportunities yearly for poverty alleviation and for the growth of the living standard of citizens vocational training would be imparted to 20 lakh graduates till 2018.

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BUSINESS QUOTATIONS
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I do believe we're all connected. I do believe in positive energy. I do believe in the power of prayer. I do believe in putting good out into the world. And I believe in taking care of each other.
HARVEY FIERSTEIN
POSITIVE, GOOD, POWER

It is only through labor and painful effort, by grim energy and resolute courage, that we move on to better things.
Moving On, Courage, Labor The energy of the mind is the essence of life.
ARISTOTLE
LIFE, MIND, ESSENCE

I would like nuclear fusion to become a practical power source. It would provide an inexhaustible supply of energy, without pollution or global warming.
STEPHEN HAWKING
When you are enthusiastic about what you do, you feel this positive energy. It's very simple.
PAULO COELHO
POSITIVE, SIMPLE
I think it's healthy for a person to be nervous. It means you care - that you work hard and want to give a great performance. You just have to channel that nervous energy into the show.
BEYONCE KNOWLES
In times of great stress or adversity, it's always best to keep busy, to plow your anger and your energy into something positive.
LEE IACOCCA
It is wonderful how much time good people spend fighting the devil. If they would only expend the same amount of energy loving their fellow men, the devil would die in his own tracks of ennui.
HELEN KELLER
Every dollar spent on nuclear is one less dollar spent on clean renewable energy and one more dollar spent on making the world a comparatively dirtier and a more dangerous place, because nuclear power and nuclear weapons go hand in hand.
MARK Z. JACOBSON

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COVER STORY
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HBL-NBP READY TO FINANCE RS84 BILLION FOR SHEIKHUPURA POWER PLANT

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Presidents of Habib Bank Limited (HBL) and National Bank of Pakistan (NBP) in a meeting with Chief Minister Punjab Muhammad Shahbaz Sharif presented an offer to countersign the project financing amounting to Rs84 billion to set up 1,200 megawatts LNG-based power plant at Bhikki Sheikhupura, which would be the first of its kind project and the biggest project financing portfolio arranged by local banks in the history of the country.

The planned financing by the banks is the single largest financing for an energy project raised domestically. Both the HBL and NBP expressed full confidence in the commercial and economic viability of the 1,200 megawatts LNG-based power plant at Bhikki Sheikhupura and called it an important initiative towards alleviation of energy crisis. The plant will be operated on imported LNG and is scheduled to start operation in 2017.....

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CURRENCY CONVERTER
(Open Market)

 EURO:

 US DOLLARS:

 UK POUNDS:

 Japanese YEN:

 SAUDI RIYAL:

 UAE DIRHAM:

 KUWAITI DINAR:

 CANADIAN DOLLARS:

 PAKISTANI RUPEES:

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THIS WEEK TOP STORIES

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CAPITAL MARKET
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KSE –MARKET REVIEW
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The market continued its downtrend this week, witnessing another 1.3% WoW dip to close at 32,606 points. Investor sentiment was further dampened by the passage of the GIDC Bill, with volumes witnessing constant decline. Average daily value traded dwindled by 47% WoW to US$51mn whereas ADTO shed 43% WoW to a meager 109mn shares. FIPI for the week clocked in at US$3.5mn, down 43% WoW. The market remained jittery amid negative expectations surrounding the upcoming Budget. The passage of the GIDC Bill, early in the week, was another fuel to the fire. Even though it is not expected to affect corporate earnings significantly and it indicates progress on reforms, the market reacted negatively after all. Volumes dwindled largely due to lack of triggers (partly, a pre-Budget phenomenon).......

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