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PAK-CHINA COOPERATION IN INFRASTRUCTURE PROJECTS
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ISSUE # 9 ----- Mar 2 - Mar 8, 2015

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The name ‘Corridor’ suggests a gateway or a passage that connects the two countries, continents or regions. This ‘economic corridor’ will not be the first in history. The use of sea and land routes has assisted in the globalization process of opening Asia, as early as the 19th century. Suez Canal, opened in 1869, acted to aid the empires of great powers during the time. The canal through the Sinai Peninsula made trade and empire faster but also economical. The world’s superpower of the time, Great Britain, made great strategic use of it, by transport of goods, officials and soldiers to Bombay (now Mumbai) and other key colonial hubs in an easier and affordable manner. Similarly, Pakistan and China’s economic corridor sets out to achieve the same goals in a cooperative and democratic manner............

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PAGE TOP STORIES

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EXCLUSIVE INTERVIEWS
& PAGE SPECIAL REPORTS

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MORE EXTENSIVE INPUT OF STAKEHOLDERS NEEDED TO OVERCOME INSURANCE DILEMMA
AN EXCLUSIVE INTERVIEW WITH MAHMOOD LOTIA OF EFU GENERAL INSURANCE
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The major driver to improve insurance penetration is life insurance which is mostly confined to public sector that controls about 60% of the market share. It is only because of entry of private sector in the late 1990s that this segment is growing at a faster pace. As regards non-life insurance there is very little involvement on personal insurance, which is mainly due to lower disposable income. Awareness is also a major issue that requires major spending on publicity and creating an enabling environment through education. It must be appreciated that low insurance penetration is not due to lack of willingness on the part of private sector insurance companies......

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GULF FOOD CREATES A MARKET FOR FOOD EXPORTERS
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The massive Gulfood Exhibition 2015 that recently concluded in Dubai was participated by a large number of Pakistani food brands besides other local and foreign participants making an international food event boom in the real sense.
The biennial exhibition marked its landmark 20th edition and attracted over 4,800 exhibitors from 120 countries and more than 85,000 visitors from over 170 countries. To accommodate the meteoric growth and tens of thousands of participating brands, Gulfood Exhibition 2015 spanned over 127,000 meters of exhibition space including a purpose-built 23,000 square meter temporary structure is the largest of its type regionally....

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OIL PRICES
OIL WEEKLY BASKET PRICE

 (US Million $)
PERIOD PER BARRELS
Feb 27, 2015 54.38
Feb 20, 2015 56.56
Feb 13, 2015 53.55
Feb 6, 2015 51.27
Jan 30, 2015 43.79
Jan 23, 2015 43.38
Jan 16, 2015 42.65
Jan 9, 2015 46.22
Jan 2, 2015 52.65
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PREVIOUS ISSUES

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PAKISTAN WEATHER
3 DAYS FORECAST

  MIN MAX HUM% FORECAST.
KARACHI
TODAY 12 23 45 cloudy
TOMORROW 17 26 45 cloudy
DAY AFTER 17 27 50 sunny
LAHORE
TODAY 14 16 92 rain
TOMORROW 11 17 96 rain
DAY AFTER 9 18 87 rain
ISLAMABAD
TODAY 9 16 73 rain
TOMORROW 9 14 99 rain
DAY AFTER 7 14 93 rain

updated: Sun-Tue, Mar 1 - 3, 2015

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COVER STORY

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FAST TRACK MOVEMENT ON ENERGY FRONT IN PAKISTAN
THAR COAL KEY TO RESOLVE FUTURE ENERGY NEEDS OF THE COUNTRY
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Realizing the pinch of acute energy shortages, the present government has assigned top priority to different energy projects both in the public and private sector under Pakistan-China Economic Corridor package.
Responding to the government policy, Engro Powergen Limited (EPL) signed a joint venture agreement with China Machinery Engineering Corporation (CMEC) for development of 2 x 330 MW coal based power plant in Thar Block II, last week. This joint venture company, Engro Powergen Thar Limited (EPTL) will enter into a coal supply agreement with Sindh Engro Coal Mining Company (SECMC) for purchase of 3.8 metric tons per annum coal, which will be used for power generation.......

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COVER STORY
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TRADE EXHIBITIONS
EXPO PAKISTAN TO GENERATE BUSINESS AND INCREASE EXPORT AND INVESTMENT
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Pakistan Expo 2015, A four-day international exhibition held at Expo Center Karachi last week provided an opportunity to the local industry to showcase its quality products to a large number of foreign delegates and buyers participated in this grand exhibition, which was inaugurated by Prime Minister Mohammad Nawaz Sharif accompanied by his senior cabinet members including Finance Minister Ishaq Dar.

This annual feature is in fact an important event for Pakistan’s economy, which not only generate business worth over $1 billion but also help improve perception of Pakistan as the exhibition was held in the commercial hub of Pakistan, Karachi, which is generally targeted by foreign media as a volatile city. However over 800 foreign delegates enjoyed the visit with a pleasant surprise that the ground reality was quite different from what it being propagated by foreign media about law and order situation in Karachi, a city of over 20 million plus population........

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COVER STORY
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CHINA SET TO PROVIDE MORE FAVORABLE CONCESSIONS UNDER FTA

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Pakistan’s major imports from China are machinery, chemicals, garments and other textile products, construction material, tiles, sanitary wares and crockery. Pakistan enjoys huge export potential to China due to its advantages in agriculture, minerals, chemical, textile and leather products. Besides Pakistan has comparative advantage of oil seeds, fruits, base metals, plastic goods and perfumery etc.

 

A large number of Chinese companies are working in Pakistan in oil and gas, IT and telecom, power generation, engineering, automobiles, infrastructure and mining sector. Unfortunately, too much of affection and pride in our alliance with China is not working in our interest particularly relating to trade. The increase to the FTA no doubt, has made China the second-largest country destination for Pakistani exports after the United States.......

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SOCIETY
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HONORING THE MEMORY OF M. RAFI BUTT
ONE CROWDED HOUR OF GLORIOUS LIFE IS WORTH AN AGE WITHOUT A NAME
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We owe the creation of Pakistan to the Quaid-e-Azam Muhammad Ali Jinnah and the stalwarts who stood by him. Those were the men who responded with one voice to the call of their great leader and rallied round the flag of the Muslim League. They carried his message to the four corners of the subcontinent and mobilized the Muslim masses in favor of the demand for a separate homeland.

They were the real crusaders, the real soldiers in the vanguard of the freedom struggle. Inspired with a sense of selflessness and social commitment, they considered no sacrifice for the great achievement of their mission. Among this committed group was a young industrialist from Lahore. His name was M. Rafi Butt.

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COVER STORIES
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SHIPPING
NEWS

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DRY BULK MARKET SEES POSITIVE MOMENTUM
As the Baltic Dry Index (BDI) inched a bit higher over the past couple of sessions and the Chinese are returning to the market after a week long hiatus, most market delegates are looking to see if the market will bounce back.
According to the latest weekly report from shipbroker Allied Shipbroking, "the truth is that commodity prices have still remained at relatively low levels despite a slight uptick these past couple of weeks. Both Iron ore and coal have noted an improvement compared to where they stood in early February, while iron ore inventories at China’s main ports are reported to be sloping down to 96 million dry tonnes with increased momentum"...
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COVER STORY
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POWER PROJECTS OF 10,400 MW TO ACHIEVE FINANCIAL CLOSE WITH CHINESE LENDERS IN MARCH
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While the Chinese government and banks are ready to finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years, the Chinese companies are going to operate the projects as profit-making entities.
Power projects of 10,400 megawatts under the Pak-China Economic Corridor (PCEC) are expected to achieve financial close with a consortium of Chinese lenders next month, sources said.
China has committed to invest around $33.8 billion in energy projects and $11.8 billion in infrastructure development. The Chinese government and banks, including China Development Bank and the Industrial and Commercial Bank of China Ltd are likely to loan funds to Chinese companies for the planned PCEC..........

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COVER STORY
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CHINA’S ACHIEVEMENTS SOURCE OF PRIDE AND INSPIRATION FOR PAKISTAN, REGION
INTERVIEW WITH MR MEHTAB UDDIN CHAWLA, CHIEF PATRON, PAK-CHINA CLUB
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China is Pakistan's neighbor, friend and ally and both countries are linked via the 8th wonder of the world, The Karakoram Highway, rivers and mountain ranges. The phrase "higher than the mountains and deeper than the oceans" fits best when defining the political, financial, economical and cultural friendship that exists between the two neighbors. With approximately similar birth dates, Pakistan and China set a global example of how good neighbors can partner, trust, develop and nurture to each others’ needs and growth to provide the best living standards to the citizens of their countries....

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RESEARCH CORNER

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GWADAR PORT TO BE FULLY OPERATIONAL BY APRIL

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Commercial activities at the Gwadar deep seaport would start from April-2015 as the concerned authorities have acquired possession of 2,231 acres of land from Pakistan Coast Guard and Pakistan Navy for organizing free-trade zones. Gwadar Port Authority’s (GPA) goal is to make the port fully functional in April and by that time the first commercial ship would dock at the port and a fresh ship lane would be operational thereafter. GPA mentioned that infrastructure progress at the port was in last stages while work was in full swing to organize free-trade zones, where a huge number of nationwide and worldwide firms have begun organizing display and business centers.....

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CAPITAL MARKETS
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FINANCE
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DISREGARDING THE DEBT LIMITATIONS
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The government has long been breaking the debt limits set in the 2005 Fiscal Responsibility and Debt Limitation Act. Analysts from the State Bank of Pakistan are grateful to the government’s frankness in at least admitting its weakness this time. The government’s failure to prevent the debt-to-GDP ratio from exceeding the 60 percent benchmark shows the sign that government's lack fiscal discipline. In Pakistan’s less tax collection rates and overwhelmed debt-financed budget deficits every year look frightening. Government, particularly Finance Minister Ishaq Dar, does not appear to be interested in punishing tax evaders, the root cause of Pakistan’s high and growing debt. By all standard growth in revenue collection has fallen to the single digit........

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BANKING
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GROWTH CHALLENGES FOR BANKING SECTOR IN BALOCHISTAN
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The deficiency of resources is the root cause of underdevelopment in Balochistan. Lack of capital, low investment and low productivity has led to the low income of the province, and hence it is caught up in the vicious circle of poverty. The province’s human and material resources remained unutilized or underutilized. The people are technologically backward. Illiteracy is higher and hence the people lack the initiative and entrepreneurial ability. The province lacks the skilled and trained labor to utilize its natural resources. Resultantly, its resource potential remained untapped and the province has been caught up in underdevelopment trap.....

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INDIA IN THE NEWS

NEW DELHI: The Railway Budget 2015-16, that left passenger and some freight fares untouched, envisages an investment of Rs 8, 50,000 crore over the next five years - mostly directed towards modernizing existing tracks and introducing faster trains.
Railway minister Suresh Prabhu told the Lok Sabha that the proportion of rail revenue available for investments would rise to 11.5 per cent in the next fiscal - up from 8.2 percent in the current fiscal. The latest rail budget comes at a time when its finances and efficiency are, perhaps, at their worst - as measured by a common parameter, the operating ratio.....

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IN THE NEWS

The government has decided to maintain the petroleum prices in March (this month), and proposed increase in prices by Oil and Gas Regulatory Authority (OGRA) would be adjusted by reducing GST from existing 27 percent to 18 percent. Addressing a news conference on Friday, Finance Minister Ishaq Dar said that as per directives of Prime Minister Nawaz Sharif sales tax rate would be changed to minimize the increase in petroleum prices. He added that additional impact would be adjusted through Petroleum Levy to maintain the current prices in this month. ........

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GULF NEWS

TEHRAN - The 7th International Energy Saving, Renewable Energy, and Energy Efficiency Exhibition of Iran opened on Saturday at the Tehran Permanent International Fairgrounds. Latest products and achievements related to energy saving, renewable energy, and energy efficiency are on display in the exhibition. In November 2014, Iranian Energy Minister Hamid Chitchian outlined plans to develop the national electricity industry, placing the priority on the expansion of solar and wind power plants. He also said that Iran’s old and low-efficiency power plants should be decommissioned and the gas-fired power plants should be converted into combined-cycle plants......

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ANNOUNCEMENT

Pakistan saw one of the biggest mobile phone launch of the year on Sunday, 15th February at the Lahore Expo Center. Rivo mobile paired with Advance Telecom launched its complete range of smartphones and feature phones. Rivo Mobile is said to be first mobile phone company that is being designed in Hungary which gives it a huge edge over the competition. Rivo has introduced its smartphone range called Phantom, which is top of the line, followed by Rhythm which is focused towards youth. The feature phone range includes; Classic, Advance, Neo, Jaguar, Sapphire and there is more to come in the year ahead....

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FERTILIZER
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THRIVING FERTILIZER SECTOR
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Having gained 15.7%CY15TD as compared to 18.9% return in CY14, the Fertilizer sector has clearly attracted investor attention in 2015. This is partly a function of an encouraging start to the year with cumulative fertilizer offtake of the country improving by 6%YoY to 765,800 tons during January 2015 as opposed to 724,200 tons during January 2014.
In this regard, total urea offtake in January 2015 stood at 628,800 tons as compared to 619,200 tons in January 2014, growth of 2% YoY appears muted but is encouraging that it reversed previous 4 million trend of consistent YoY declines......

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EXCHANGE RATES
Pakistan Open Market Rates

BUYING SELLING
US $ 101.9 102.15
UK POUNDS 156.5 156.75
KUWAITI DINAR 344 344.25
SAUDI RIYAL 27 27.25
UAE DIRHAM 27.65 27.9
CANADIAN DOLLAR 81 81.25
EURO 114 114.25
JAPANESE YEN 0.85 0.87

MORE RATES

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AVIATION
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NOT EASY TO STAY IN AIRLINE BUSINESS
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It’s getting tougher to stay in one of the most competitive businesses -- air passengers trafficking. It’s a combination of high management skills, acquisition and maintenance of state-of-the-art fleet, expert financial management, and above all, a delicate marketing approach aimed at passenger comfort. A recent AFP Tokyo news article appearing in Gulf Times reports ANA’s joining others in a bid to rescue bankrupt Skymark. The news article opens with the following lines: ‘Japan’s All Nippon Airways yesterday announced plans to help turn around bankrupt Skymark Airlines.....

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COVER STORY
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GROWING CHINESE STAKES IN GWADAR
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A fully operational seaport at Gwadar will revolutionize the communication sector of Balochistan. It will entail a multi-directional network of road communication not only in Pakistan but the whole region. The development of road links between Gwadar and the Central Asian States and also China's Xinjiang province will give distinction to the port of becoming the nearest mother port in the region. Establishment of railway link with Gwadar to Taftan in Iran via Saindak has been planned......

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13Feb15 20Feb15 27Feb15
NASDAQ

4,857.61

4,924.70

4,981.83

H.SENG

24,682.54

24,832.08

29,220.12

SENSEX

29,094.93

29,231.41

28,842.37

NIKKEI

17,913.36

18,332.30

18,797.94

CAC-40

4,761.46

4,810.39

4,951.48

DAX

10,979.27

10,958.27

11,401.66

FTSE

6,883.02

6,903.98

6,946.66

S&P

2,088.48

2,097.45

2,111.62

DJIA

17,972.38

17,985.77

18,195.67

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As On Feb 27, 2015

TENOR

BID

OFFER

1 Week

7.90

8.40

2 Week

7.97 8.47

1 Month

8.00 8.50

3 Month

8.19 8.44

6 Month

8.19 8.44

9 Month

8.20 8.70

1 Year

8.18 8.68

2 Year

8.26 8.76

3 Year

8.34 8.84
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RESEARCH CORNER
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PAKISTAN LOSES SECOND MATCH OF WORLD CUP 2015
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World is richer than ever before. The number of people living in severe poverty cut by half in present years, car ownership has increased, so as the cell phones. Three in every four households now own a fridge. But a richer world is not an equal one; the richest 85 people have as much as the poorest 3.5 billion. In some developing states like Pakistan, it has been recorded a wide gap – or in some cases – widening gap between poor and rich, and between those who can and cannot access opportunities. It means that access to good schools, electricity, healthcare, pure water and other critical services remains elusive for various people who live in developing economies. Other issues, like economic shocks, climate change and food insecurity threaten to undermine the development made in present years........

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BUSINESS QUOTATIONS
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Trade wars aren't started by countries appealing to respected, independent trade authorities. Rather, trade wars begin when one country decides to violate international trade rules to undercut another country's industries.
RON WYDEN
Dover's cliffs call to mind the Roman invasion; the Battle of Britain; our proximity to, yet difference from, mainland Europe; and international trade and exploration, both fair and exploitative.
JULIAN BAGGINI
It is usually people in the money business, finance, and international trade that are really rich.
ROBIN LEACH
After 16 months of teaching, consulting, fellowship, and special project activities on matters ranging from conservation to healthcare to international trade, Gov. Ventura appointed me to the Minnesota Court of Appeals.
DAVID MINGE
As far as the Russians were concerned, I felt the reverse; they had adequate gold, if they wanted to buy, and they weren't dependent upon international trade. I felt they were more self-sufficient.
W. AVERELL HARRIMAN
When diamonds' role in fuelling violent conflict in Africa gained worldwide attention, the diamond industry established the Kimberley process in order to keep "blood diamonds" out of international trade.
PETER SINGER
As an economist specializing in the global economy, international trade and debt, I have spent most of my career helping others make big decisions - prime ministers, presidents and chief executives - and so I'm all too aware of the risks and dangers of poor choices in the public as well as the private sphere.
NOREENA HERTZ

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COVER STORY
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PAK-CHINA COOPERATION IN INFRASTRUCTURE PROJECTS

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Pakistan-China Economic Corridor is strategically important for both China and Pakistan keeping in view the growing regional trade and investment collaboration. It is a win-win opportunity for Pakistan and China and the agreements of early harvest projects during Prime Minister Nawaz Sharif visit to China have great significance. These projects would be completed within a span of two to three years time and these include rail, road network besides several long and short term energy projects.

Pakistan is the first South Asian country to sign a free trade agreement and currency swap agreement with China and is also the largest destination of Chinese investment in South Asia. China is Pakistan’s second largest trading partner and fourth largest export market. China-Pakistan Economic Corridor has the potential to turn Pakistan into a hub of regional cooperation. If Pakistan uses this opportunity wisely and is able to reap the economic benefits this corridor has to offer, it can greatly enhance its regional power and prestige and prove a more valuable long-term ally for Beijing.........

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CURRENCY CONVERTER
(Open Market)

 EURO:

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 CANADIAN DOLLARS:

 PAKISTANI RUPEES:

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THIS WEEK TOP STORIES

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ADB APPROVES $30M LOAN FOR LNG TERMINAL (DAWN NEWS)
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INDIA BUDGET TO BOOST INVESTMENT (BBC NEWS)
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POULTRY SECTOR DEMANDS RELIEF PACKAGE AS DAILY LOSS RISES TO RS300M (THE NATION)
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KP ORGANISES FIRST INVESTMENT ROAD-SHOW: FOREIGN FIRMS MAY INVEST $1.2 BILLION IN DIFFERENT SECTORS (BUSINESS RECORDER)
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UAE MARKETS CONTINUE TO CONSOLIDATE (GULF NEWS)
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OVER 100 US FIRMS TO ATTEND ‘BUSINESS OPPORTUNITY’ CONFERENCE (DAWN NEWS)
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GOVT TO SUPPORT RURAL YOUTH FOR SETTING UP AGRO-BASED BUSINESSES (THE NATION)
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CAPITAL MARKETS
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STOCK MARKET ROUND UP
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Fertilizer sector gaining more than 15% CYTD as existing investors opt for sector rotation. News flow impacting the market in the outgoing week included: 1) approval of the amended GIDC Bill, 2014 to cover the target collection Rs95 billion, 2) following the relative bottoming out of global oil prices, retail fuel prices in Pakistan expected to be increased by 2.9% in the coming month coupled with possible imposition of regulatory duty on import of petrol and diesel worst being 5% regulatory duty imposed on furnace oil and 3) foreign reserves for the week ended 20th February slipped 1% to less than US$16 billion mounting pressure on the exchange rate as a dollar crossed Rs102 in the open-market. Some of the gainers included INDU (+8.7%WoW on account of highest ever monthly sales in January),.....

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