FINANCIAL CONSTRAINTS, MISMANAGEMENT AND POOR ELECTRICITY GENERATION ARE THE MAJOR ECONOMIC FLAWS
ISSUE # 35 -----
Sep 1 - Sep 7, 2014

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In Pakistan, services are the biggest sector of the economy and account for 53-percent of total GDP. Within services the most important segments are: public administration and defense (18-percent of total GDP); wholesale and retail trade (17-percent) and transportation (10-percent). Industry accounts for 25 percent of GDP. Within the industry, the manufacturing segment represents 19-percent of GDP and mining and construction accounts for 5-percent. The remaining 22-percent is contributed by livestock (11-percent) and fishing, forestry and agriculture (11-percent)........
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PAGE TOP STORIES

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EXCLUSIVE INTERVIEWS
& PAGE SPECIAL REPORTS

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SUSTAINABLE GDP GROWTH REQUIRES CONTRIBUTION FROM ALL SEGMENTS OF THE ECONOMY

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Apart from huge financial losses running in billions of rupees to the economy due to prevailing political scenario in the country the worst effect of the poorly managed political situation will be on the image of the country, and this ugly situation seems to have emerged only because of personal or party ego of the confronting parties either both ruling or opposition parties. On the domestic front, a large number of industries either forced to become idle or have shutter down their factories due to non-supply of raw material from up country or from Karachi vice versa. Consequently the affected industries suffering badly at the hand of disturbed political disturbance........

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EDUCATION SYSTEM SHOULD BE REVOLUTIONIZED AND MODERNIZED TO MEET THE DEMAND
INTERVIEW WITH JAVARIA HASSAN, COUNTRY MANAGER, CIMA PAKISTAN CHARTERED INSTITUTE OF MANAGEMENT ACCOUNTANTS

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Job market trend is now moving away from experience based profile of a job seeker to a competency based profile. If I bring out a very personal experience I recently faced, I was recently looking for a qualified driver and then came a driver with 28 years of experience of clean driving, but he couldn’t drive an automatic transmission car. This shows that even at the lowest level of employment the competency has been influenced by technology. At upper level in the labor market, technology has had an even greater impact and on the education systems as well...........

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OIL PRICES
OIL WEEKLY BASKET PRICE

 (US Million $)
PERIOD PER BARRELS
June 27, 2014 109.62
July 4, 2014 108.03
July 11, 2014 105.73
July 18, 2014 104.65
July 25, 2014 105.33
Aug 1, 2014 104.45
Aug 8, 2014 102.44
Aug 15, 2014 101.61

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PREVIOUS ISSUES

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PAKISTAN WEATHER
3 DAYS FORECAST

  MIN MAX HUM% FORECAST.
KARACHI
TODAY 27 39 53 sunny
TOMORROW 28 37 49 thunders
DAY AFTER 26 34 65 thunders
LAHORE
TODAY 26 36 53 sunny
TOMORROW 27 35 61 sunny
DAY AFTER 27 35 64 thunders
ISLAMABAD
TODAY 24 34 52 sunny
TOMORROW 23 31 63 sunny
DAY AFTER 24 33 64 sunny

updated: Sun-Tue,Aug 31-Sep 2, 2014

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COVER STORY
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PAKISTAN'S ECONOMY KEEPS STRUGGLING AMID POORER GDP
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Soon after independence, Pakistan economy grew at a fairly astounding rate of 6 percent per annum through the first forty years. Despite being a very poor country in 1947, the growth rate has been better than the global average during the succeeding 50 years, but slowed in the late 1990s. In spite of fast population growth during this period, per capita income doubled, inflation remained low and poverty declined from 46 percent to 18 percent by late 1980s. The satisfactory economic performance was maintained through civilian and military governments in 1950s, 60s, 70s and 80s until the decade of 1990s.......

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COVER STORY
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POWER SHORTAGE, LAW AND ORDER SITUATION REMAIN OBSTACLE TO ECONOMIC REFORM
INTERVIEW WITH MR JOHAR QANDHARI, FORMER CHAIRMAN KORANGI ASSOCIATION OF TRADE & INDUSTRY
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After a period of slack growth during last few years, Pakistan’s economy witnessed higher and broad based economic growth in 2013-14 accompanied by significant recovery in industrial sector and moderate growth in services and agriculture sectors and witnessed over 4 percent GDP growth. In the last year, we were able to make good recovery in economy and strengthen the macroeconomic stability. Pakistan’s success includes: picking up in economic growth, inflation contained at single digit and reduction in fiscal deficit.

Also we must appreciate the non economic activities like auction of long pending 3G and 4G licenses. Additionally, during the mid of year, Rupee strengthened with slight rise in foreign direct investment............

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COVER STORY
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PAKISTAN ENJOYS UNIQUE POSITION AMONG SOUTH ASIAN COUNTRIES
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The term South Asia commonly refers to seven countries namely: Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. These countries are also part of South Asian Association for Regional Cooperation (SAARC), a bloc established in 1985. Afghanistan has been included as 8th member of SAARC in 2006 and China, Iran and Myanmar are also seeking full member status of the bloc.
According to various reports SAARC member countries have millions of acres of cultivable land, reasonably robust agriculture and manufacturing base, but very large percentage of population of these countries lives below the poverty line. Often South Asia is termed the poorest region in the world after Sub-Saharan Africa............

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COVER STORY
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GOAL OF 7PC GROWTH COULD DO WITH BRINGING ECONOMY BACK TO NORMAL
INTERVIEW WITH DR AYUB MEHAR, DIRECTOR GENERAL (R&D) FPCCI
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In the present state of affairs in Pakistan, development planning cannot be much depended on the fiscal policy. In past, fiscal policies have been failed because of the clashes of interests among the vested interest groups. Moreover, no fiscal space is available for development planning by the public sector. Foreign assistance and external debt are also not a feasible or recommendable option. They restrict the political freedom of the country. We suggest that FDI (Particularly investment by ex-patriots) is the most feasible option for development planning.

Financial Liberalisation is required to attract FDIs. It is a soft option for resource mobilisation to develop deteriorated infrastructure. It is notable that India’s faster development since 1990s is primarily based on FDIs, and more than 60 percent of this FDI belong to Indian expatriates...........

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COVER STORIES
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SHIPPING
NEWS

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TANKER MARKET SET TO SHARE FAIR SHARE OF SURPRISES
So far in 2014, most tanker market segments, from Suezmaxes to Aframaxes have enjoyed their fair share of spotlight, as rates have spiked in many occasions so far. But, now, it seems that the market’s heavyweights, the VLCCs are also starting to join the ‘party’. According to the latest weekly report from London-based shipbroker Gibson, "the crude tanker market has been full of surprises this year. Rates across all tanker categories spiked impressively in January, with earnings rising to their highest level in several years. Although the markets have eased since then, volatility has remained............

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COVER STORY
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HABIB UNIVERSITY — THE UNIVERSITY OF LIBERAL ARTS & SCIENCES GOES INTO FIRST ACADEMIC SESSION FROM MID AUGUST 2014

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It was really amazing to have a look at the exciting building and infrastructure of the entire Habib University, its class rooms, libraries, labs and lobbies, cafés and walkways and sports facilities, which are designed so well to give a stand out position to this new edition in the higher education scenario in Pakistan.
However, apart from the impressive buildings and facilities which have eye-catching appeals no doubt yet the real sense of appreciation has yet to come with the arrival of first batch of successful graduates when they accomplish and acquire the much needed treasure of quality education to build up image of the Pakistani society...
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COVER STORY
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TIME TO TAKE BALOCHISTAN'S RESOURCES ON THE PATH FOR ECONOMIC PROGRESS
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Nature has bestowed Balochistan with so many natural resources. Unfortunately, the lacks of industries and infrastructure planning in the province still yet been addressed properly or we can say completely overlooked as there is much potential exist in the province which can directly contribute to the Pakistan’s GDP as it provides the essential resources that throw in to the industry, exports and development of the country’s economy...........

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RESEARCH CORNER

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AGRICULTURE & LIVESTOCK MAKING GREAT HELP IN FINANCIAL FEAT

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In Pakistan, the key objective of agriculture sector is to ensure proper production and availability of food for the citizens and also offers livelihoods to people directly involved in the sector along with the value adding chain.
The achievement of sustainable progress in agriculture sector (contributes over 22 percent to GDP) completes macroeconomic objectives by its forward and backward linkages with the other sectors. Pakistan agriculture and food security concerns remain high on the strategy agenda at national level. During FY14, the overall presentation of agriculture sector recorded a progress of 2.1 percent because of an optimistic progress in agriculture related sub sectors. Livestock rose at 2.9 percent, fishing 1.0 percent, crops 1.2 percent and forestry 1.5 percent......

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CAPITAL MARKETS
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COVER STORY
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POOR ECONOMIC MANAGEMENT MAKES GDP MEANINGLESS
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Pakistan gained independence in 1947 and since has been on the road of development to increase industrial output, encourage growth of businesses, create employment and improve living standards of the population. The pace with which Pakistan has progressed may be questioned in terms of business, economic and political stability which may not only be reflective of Pakistan’s past but may also give a reflection of the challenges which are to be accomplished in the near future........

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COVER STORY
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REASONS BEHIND PAKISTAN’S LOWER GDP
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For the fiscal year 2014, the United Nations Economic and Social Commission for Asia and the Pacific have projected the country’s GDP to pick up to 4.1 percent. A report launched by UNESCAP stated that in the recent months, positive changes had been experienced in the economy of the country which included an improvement in the growth of large scale manufacturing industries; appreciation of the local currency; increase in the foreign exchange reserves along with an increase in the private sector credit.
Pakistan’s economic growth had come down to 3.7 percent in 2013 which had been a decline from 3.8% of the previous year........

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INDIA IN THE NEWS

A sharper-than-expected rebound in economic growth should underpin Indian shares when trading resumes on Monday, and extend an eight-month rally to record peaks into September. Rising foreign interest in Asia’s third-largest economy should also get a boost in the coming week when Japan inks deals to build large infrastructure projects, including help kick-off bullet trains, in India.
The government said on Friday, a festival holiday for markets, GDP grew at an annual rate of 5.7 per cent in April-June, the fastest pace in more than two years and ahead of street estimates of around 5.5 per cent.......

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IN THE NEWS

The GDP growth accelerated to 4.14 percent in 2013-14 against the growth of 3.70 percent registered in the same period last year, Kamal Hayder, research analyst-PAGE said. The growth momentum is broad based and all the 3 key sectors namely agriculture, industry and services have provided support to improve economic growth. The agriculture sector grew at a predicted rate of 2.12 percent against the growth of 2.88 percent in the last year. The industrial sector expanded by 5.84 percent against the growth of 1.37 percent in last year, while large scale manufacturing registered growth of 5.31 percent against the growth of 4.08 percent in last year.......

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GULF NEWS

Dubai: Last week the Dubai Financial Market General Index (DFMGI) ended higher by only 20.67 or 0.42 per cent, closing at 4,928.22. Volume rose to a five-week high but remained in the lower half of weekly volume levels of the past year. There were almost twice as many declining issues as advancing, coming in at 22 to 12, respectively
Although there was technically a bullish breakout of the ascending triangle pattern discussed last week, there was mediocre follow-through. The DFMGI ended the week on a weak note, closing in the bottom quarter of the weekly range, and below the six-week high of 4,935.24. Further, the market rallied on the Sunday breakout day, but spent the following three days going almost nowhere, before dropping last..
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ANNOUNCEMENT

Zong, Pakistan’s first and only Super 3G & 4G telecom network in Pakistan, recently concluded its Mega ‘Zong Lakh Pati’ offer. The campaign has been one of Zong’s most successful VAS campaigns till date as more than 1.1 million Zong customers took part. Till its conclusion, more than 266 lucky customers received prizes. The ‘ZonG Lakh Pati’ offer was a point based game where loyal Zong customers won cash prizes daily and weekly by simply participating via SMS and IVR. The winners were announced on a daily and weekly basis under three categories: Random Lucky Draw Winners, Top Scorers and Surprise Prize Winners..........

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COVER STORY
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DOES HIGH GDP TRANSLATE INTO IMPROVEMENT IN QUALITY OF LIFE?
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Higher GDP in simple word means an increase in aggregate production of all goods and services in the economy. This translates into job creation, expansion of businesses, increase in trade, foreign exchange of the country, taxation which results in betterment of the people. There is an argument that with increase in GDP, unemployment does reduce however wage levels remain at their minimum, which keeps standard of living intact. Rich businessmen become richer where employees earn minimum increment, impact on standard of living being minimum. If we observe Pakistan, the assumption seems to be true. In USA, those earning minimum wage as suggested by the state remains same regardless the growth in the business for which they work. Through it may be true that more people will get jobs, it cannot be said for sure if standard of living improves.........

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EXCHANGE RATES
Pakistan Open Market Rates

BUYING SELLING
US $ 101.5 101.75
UK POUNDS 168 168.25
KUWAITI DINAR 357.75 358
SAUDI RIYAL 26.95 27.2
UAE DIRHAM 27.55 27.8
CANADIAN DOLLAR 92.75 93
EURO 133 133.25
JAPANESE YEN 0.96 0.97

MORE RATES

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COVER STORY
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AGRICULTURE SECTOR CAN GIVE FURTHER BOOST TO ECONOMIC GROWTH
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Pakistan is considered as the 27th largest economy of the world because of more purchasing power albeit an underdeveloped country. The mainstay of Pakistan’s economy is agriculture sector. Pakistan’s major exports comprises on agricultural produce like wheat, rice, cotton, and other main crops. 
Agriculture constitutes the largest sector of our economy. Majority of the population, directly or indirectly dependent on this sector and agriculture sector contributes about 24-percent of Gross Domestic Product (GDP) and accounts for half of employed labor force and is the largest source of foreign exchange earnings..
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15Aug14 22Aug14 29Aug14
NASDAQ

4,453.00

4,532.10

4,557.69

H.SENG

24,954.94

25,112.23

24,712.27

SENSEX

26,103.23

26,408.27

26,638.11

NIKKEI

15,318.34

15,539.19

15,424.59

CAC-40

4,235.28

4,285.55

4,366.04

DAX

9,290.60

9,405.22

9,462.56

FTSE

6,731.91

6,777.85

6,805.80

S&P

1,955.18

1,992.37

1,996.74

DJIA

16,713.58

17,039.49

17,079.57

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As On Aug 29, 2014

TENOR

BID

OFFER

1 Week

9.61

10.11

2 Week

9.71

10.21

1 Month

9.74

10.24

3 Month

9.91

10.16

6 Month

9.93

10.18

9 Month

9.95

10.45

1 Year

9.97

10.47

2 Year

11.76

12.26

3 Year

12.24

12.74

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RESEARCH CORNER
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ADVANTAGE & DISADVANTAGE OF ONLINE BANKING

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Worldwide, governments transfer trillions in cash for salaries, pensions and welfare payments to persons, Pakistan is no exemption. Automating government to Person (G2P) presents tremendous merits. Firstly, the government can save great sums of amount. Secondly, recipients will have advantage from rapid payments with few leakages in the system. Most significantly, a growing body of evidence explains that with suitable delivery replicas, (G2P) payments recipients can be simply brought into the sphere of financial services, which should not to be missed.
Finally, individuals not getting G2P payments, but within the geographic network may taking advantage from spillover effects........

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BUSINESS QUOTATIONS
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There are over 200 million illiterate women in India. This low literacy negatively impacts not just their lives but also their families' and the country's economic development. A girl's lack of education also has a negative impact on the health and well-being of her children.
SACHIN TENDULKAR
We have in this country a federal government that increasingly is engaged in trying to determine which business, which regions, which industries will succeed, which will not through a whole range of economic development, regional development corporate subsidization programs.
STEPHEN HARPER
One of the things that people don't realize is that that natural beauty, those recreational forests, they have an economic development impact for the state as well.
ED RENDELL
If you try to put social and cultural development ahead of economic development, it doesn't work. You have to do it all together.
AGA KHAN IV
Chinese economic development has cost many American workers their jobs. That's the price of progress.
P. J. O'ROURKE
Economic development is what's going to make mountaintop removal palatable.
JOE MANCHIN
The Saudi government's denial of basic rights to women is not only wrong, it hurts Saudi Arabia's economic development, modernization and prosperity.
BARBARA BOXER
Jay Townsend has offered, and I have accepted, his resignation from his position with my campaign. Now let's return to talking about issues that really matter to families: job creation, spending restraint and economic development.
NAN HAYWORTH

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COVER STORY
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INVESTMENT OPPORTUNITIES, CHALLENGES AND THREATS
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Size of Pakistan’s GDP and its growth rate is dismal when compared with the potential. While it is true that smaller size of GDP is due to lack of documentation, the most disappointing fact is that the successive elected governments have opted for policies that could help them in attain ‘political mileage’ rather than introducing policies that could ensure sustained development.

These governments have been following policies dictated by the International Monetary Fund (IMF) and multilateral lenders rather than coming up with ‘home grown’ policies. As a result GDP growth in Pakistan often slipped below 3%, while India managed to achieve up to 10% rate. This murky performance could be attributed to: 1) failure to come up with right policies, 2) policies driven by multilateral lenders and local groups having vested interest and 3) policies discontinued or radically changed with the change of government.........

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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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400,000 PUPILS TO GET RS1.2BN THROUGH ATM, CELLPHONE SERVICE (DAWN NEWS)
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RUSSIAN ROUBLE FALLS TO NEW LOW (BBC NEWS)
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PIA GETS CAA CERTIFICATIONS FOR UPHOLDING HIGH AVIATION STANDARDS (THE NATION)
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PUNJAB GOVERNMENT APPROVES UPLIFT PROJECTS WORTH RS 9940.6 MILLION (BUSINESS RECORDER)
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UAE STOCKS MAKE LITTLE HEADWAY (GULF NEWS)
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POLITICAL CHAOS BADLY HURTING DEVELOPMENT (DAWN NEWS)
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PAKISTAN CAN BECOME HUB OF INTEREST-FREE FINANCING (THE NATION)
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CAPITAL MARKETS
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STOCK MARKET ROUND UP
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Local stock market remained under the influence of political uncertainties, with unfolding political deadlines/deadlocks leading to heightened volatility. Friday’s sharp upsurge post the emergence of the Army Chief as mediator/guarantor in the current political crisis enabled some losses to be recouped with the KSE-100 Index closing at 28,567 points but still lower 1.05%WoW. In addition to political developments, news flow/data influencing the market included 1) the Supreme Court’s decision to uphold the ruling of the Peshawar High Court deeming the imposition of GIDC to be illegal since its inception, 2) NEPRA giving approval to Disco’s to increase tariff by Rs0.43/unit for July and 3).........

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