Inflation has been a
perpetual challenge for Pakistan. We have seen in the past
that inflation figures have been forged in order to comply
with IMF directives. It is also said that inflation numbers
released is not the true indication of the economy. A senior
economist once said whatever inflation number is announced by
the government, one should multiply the number by 1.6 to reach
the exact figure. It is also said that if you can afford fuel
for your car, inflation is not for you. The government does
not have inflation at its utmost priority since politicians
lifestyle would never make them realize what the common man
goes through in their daily lives. Since announcing actual
inflation figures would result in country wide uproar and
backlash from IMF, true numbers are never made public.......
PAGE TOP STORIES
& PAGE SPECIAL REPORTS
INTERVIEW WITH MR MUHAMMAD AZAM KHAN, CEO SUNRISE CAPITAL (PVT)
Current economic dynamics give very bleak picture as economic
deterioration, worsening law & order situation, extremism and
energy crisis are denting potential capacity of my country. By
every passing day, our foreign exchange reserves are depleting
which has raised concerns of multilateral donor agencies and
foreign investors. State Bank of Pakistan reserves touched to
13-year low to $3.46 billion which is not enough even for one
month import of Pakistan and Pak rupee depreciated by almost
10% since FY14TD. It is an alarming situation where continued
depletion of reserves may lead to default like situation,
hurting macro economy and masses. However, I am still hopeful
that Pakistan has tremendous potential and can revive faster
with effective planning and concrete macro management........
INTERVIEW WITH MR KAMRAN AHMED HASHMI, GROUP
CFO & COMPANY SECRETARY
Pakistan's banking sector has remained remarkably strong and
resilient during the global financial crisis in 2008Ė09, a
feature which has served to attract a substantial amount of FDI in the sector. Owing to the large population not being
interest rate savvy, a large chunk of the deposit base is
maintained in the form of low cost deposits resulting in
higher spreads for the banking system. Additionally, most
banks are holding risk-free government securities, and hence
their balance sheets may have concentration risk but little
credit risk. Large fiscal deficits and high inflation has also
kept interest rates high resulting in high earnings for the
banks. Although the above factors have resulted in the banking
sector reaping in good profits over the years this has
resulted in a number of banks becoming inefficient.........
PIA EXPECTED TO MOVE ON THE RIGHT TRACK -- PIA CHAIRMANíS
Pakistan International Airline despite heavily indebted on the
back of massive liabilities is struggling hard to survive with
the support of the government, which has always comes to
rescue this prestigious national asset.
The bulging financial liabilities faced by the national
carrier have multiplied to such an extent that the airline has
to pay at least Rs1 billion per month under its debt servicing
liabilities, which indicates that radical corrective measures
are needed to put the airline on the right track......
PAKISTAN A THIRD LARGEST BUYER OF MALAYSIAN PALM OIL
INTERVIEW: FAISAL IQBAL, REGIONAL MANAGER
FOR PAKISTAN, AFGHANISTAN AND CENTRAL ASIAN REPUBLICS FOR
MALAYSIAN PALM OIL COUNCIL
There was an attempt
to produce palm oil in Pakistan and pilot project was set up
at Thatta over 1000 acres of land under the supervision of
Malaysian experts with the assistance of Malaysian Palm Oil
Board, however, the climatical support lacks because palm oil
plant need moisture and sun both everyday, which is possible
only in tropical climate. Although the plants are still there
in Thatta but the project was shelved due to lack of follow
up. The irony with that project was we did not have the
crushing plants to extract oil from the fruits.
The pilot project had started producing fruits but
we did not have any mill for further process. It
was unfortunate that the project was left without
technical support of installing mills to process
the fruits for producing oil, although the plants
had started yielding fruits but only fruits cannot
not be put to good use unless they are processed
through mills, it was unfortunate.......
PAKISTAN AND THE IMF
government goes to the IMF for breaking out of balance of
payment crisis since it provides a natural solution to the
problem. However, opposition parties raises hue and cry to
attain political mileage out of it. The interesting phrases to
score politically are "begging bowl" and "slavery". They
forget that capitalist system is based on debt and the IMF and
other multilateral institutions provide debt to promote and
nurture the capitalist system.
However, the problem partly lies in the public policy failure
of successive governments and partly on the conditionality
clause of the IMF. There is an urgent need to realize and
recognize the mistakes which both parties (the governments;
the IMF) are repeating........
TRANSMISSION MECHANISM OF MONETARY POLICY
The central bank of
any country provides funds to the banking system and charges
interest. Given its monopoly power over the issuing of money,
the central bank can fully determine this interest rate. The
State Bank of Pakistan provides funds to banking system by
charging three days reverse repo rate (also known as policy
rate or discount rate) or in other words this is a rate at
which banks in Pakistan borrow from SBP on an overnight basis.
Recently, this rate has been revised and increased from 9.5 percent to 10.0
percent with a view to controlling inflation over the medium-term.......
EU SANCTIONS ON
IRANíS OIL SHIPPING INSURANCE LIFTED EU
sanctions on Iranian oil shipping insurance
have been lifted after the nuclear deal
between Iran and six world powers, member of
Iran's Chamber of Commerce, Industry and
Mines, Masoud Daneshmand said, IRNA news
Previously, Iranian and international
shipping companies were unable to carry
Iran's oil due to sanctions, he added.
Iran and six world powers reached a
breakthrough deal early last week on
Tehran's nuclear program. The two sides have
signed a joint plan of action. The deal
signed in Geneva suggests some softening on
sanctions against Iran.
Insurance on oil shipments are included in
SUPREME COURTíS LANDMARK JUDGEMENT IN NICL
CORRUPTION SCAM ANNOUNCED
The Supreme Court of
Pakistan, on Friday last announced its historic judgement
relating to high-level corruption involving billion of rupees
in the National Insurance Corporation Limited (NICL) initiated
on the complaint of the Transparency International (Pakistan
Chapter) in 2010. The Chief Justice of Pakistan, Justice
Iftikhar Muhammad Chaudhry who presided the Bench, which heard
the case, authored the 15,000 word verdict and held
responsible several senior bureaucrats including the incumbent
NAB Chairman who was then Additional Secretary Interior and
others for the fraud and foe abetting the crime.........
DEVELOPING WATER RESOURCES TO DEVELOP AGRICULTURE IN
government led by Chief Minister Abdul Malik Baloch needs to
focus on development of water resources, which is the key to
maximize crop production in a water-starved
province. This can be done through increasing surface water
supplies and conserving water using the latest technologies
and protecting land and infrastructure from water logging,
salinity, floods and soil erosion. There is a dire need to
overcome the scarcity of water through construction of medium
and large dams and efficient utilization of irrigation water
and restoring the productivity of agricultural land through
control of water logging, salinity and floods as an integrated
program approach for water management needs to be adopted.......
Leasing and investment finance
companies are an important constituent of NBF sector. Leasing companies focus on
giving lease facilities to its customers and are a significant source of funding
for the SME sector. Investment finance companies can undertake a wide range of
business services, which includes money and capital market activities, corporate
financial services, project financing and non-fund based services.
Recently, there are 7 investment finance companies and 8 leasing companies in
Pakistan. The size of leasing and investment finance companies is miniscule and
their contribution to Pakistanís financial system is well below the requisite
IRAN SIGNS HISTORIC AGREEMENT
government represented by its Foreign Minister Mohammad Javad
Zarif in Geneva has recently signed a historic agreement of
nuclear program with five world powers and permanent members
of the United Nations Security Council along with Germany.
For the last ten years the six nations were trying to pursue
Iranian government to abandon its nuclear program which the
West and Israel thought it was weapon-oriented.
However, Iran always denied this allegation and said that its
nuclear program was peaceful.......
THE FALL OF PAK RUPEE HAS BEEN SEEN AS A
POSITIVE SIGN FOR EXPORTS OF PAKISTAN
The fall of Pakistan
rupee has been seen as a positive sign for exports of Pakistan
as the local currency has fallen 8 percent since the beginning
of 2013. Moreover, it depreciated faster in the months of
October and November, as it went down by a sharp 6 percent
against the greenback. The continuous depreciation of Pak
rupee may have a favorable short term impact on the country's
exports if the government can provide an enabling business
environment to exporters, experts opined......
INDIA IN THE NEWS
is at best a short-term stabilisation measure. It can't trigger sustainable
economic growth, which requires structural changes to make the economy more
productive. However, if monetary policy ignores inflation in the short run,
there will be long-term consequences. We saw that earlier in the year when
events outside India made investors re-rate the implication of the size and
composition of India's current account deficit. The consequence was a level of
volatility that may well have led to many an investment plan being
IN THE NEWS
The Federal Board of Revenue will exclude cases from selection process for audit
(Tax Year 2013) through computer ballot, where taxpayers would pay 25 percent
more tax for the Tax Year 2013 against tax paid or assessed previous year.
Official sources told research analyst-PAGE on Friday that the selection process
of cases for audit through computer ballot would not be applicable to taxpayers,
who would pay 25 percent more tax for the Tax Year 2013 against previous year.
The computer balloting would not be applicable to the existing registered
persons, who are ready to pay 25 percent more tax as compared to same period
Dubai set the tone for their win in the very first round of
voting, leading all other aspirants, including heavyweights
Russia and Turkey. The UAEís performance improved with each
vote. They improved their first round showing of 77 votes by
gaining 10 more votes in the second round, while heavyweights
Russia improved by only two. This gave credence to the fact
that any political manoeuvrings that had been expected by
countries had been negated by the sheer confidence of the
In line with its vision of working
together for a healthier world, Pfizer Pakistan has organized a nationwide
campaign educating young women on pain management. The awareness sessions were
organized in 35 female colleges across Pakistan enlightening thousands of girls
about pain management and its related complications.
This unique campaign, Hello Life! Say Bye to Pain effectively engages the young
audiences as female theater actors conduct a play focusing on highlighting
issues most girls are not comfortable talking about..
WEEKLY COMMODITY RATES
RIBBON AND LCWU SIGN MOU FOR THE BETTERMENT OF YOUNG GIRLS OF
White Ribbon Campaign
Pakistan has inked a Memorandum of Understanding (MoU) with
Lahore College for Women University (LCWU) for working hand in
hand for the betterment of young girls of Pakistan.
The MoU was signed at LCWU during the 2013 celebrations of
International White Ribbon Day for Elimination of Violence
Vice Chancellor LCWU,
Dr. Sabiha signed the document on behalf of her university,
whereas Chief Executive, Omer Aftab represented White Ribbon
at the event. Provincial Minister for Women Development,
Hameeda Waheed Uddin was also present at the event......
HIGH INTEREST RATES PUTTING HURDLES IN DEVELOPING ECONOMY
rate increases consumer spending, investment and the amount of
loans people take out of the bank. Also, interest rates
increase foreign investment. It is seen mostly when interest
rates are high, people do not want to take loans out from the
bank because it is difficult to pay the loans back.
When interest rates are high foreign investment increases
because foreigners want a larger return for their investment.
This causes more demand for the dollar, euro or pound in the
international market. High interest rate increases the cost of
borrowing. Interest payments on loans are more expensive. This
discourages people from borrowing and savings........
AT A GLANCE
The market continued
its upward trend from last week, increasing by 1.9% WoW. In
the last two weeks alone, the market has rallied 4.4%. The
surprising aspect of this weekís rally was that it took place
in the backdrop of net foreign selling of US$8.7mn in the
week. In terms of activity there was a dip from last week as
avg daily turnover during the week fell to 133mn shares, down
25% WoW, and value traded at US$65mn also fell by 17% WoW..........
As On Nov 29, 2013
REACHES OUT TO CATER THE NEEDS OF PAKISTANI CITIZENS
National Bank of
Pakistan (NBP) is the largest commercial bank operating in Pakistan. It has
redefined its role and has shifted from a public sector firm into a modern
commercial bank. NBP's services are available to individuals, government and
corporate entities. While it continues to act as trustee of public funds and as
the agent to SBP, it has diversified its business portfolio and today is a key
lead player in the retail and consumer banking, debt equity market, corporate
investment banking, agricultural financing, treasury services and is showing
growing interest in developing and promoting the Pakistan's SMEs and at the
similar time fulfilling its social responsibilities, as a corporate
Do countries with strong gun control
laws have lower murder rates? Only if you cherry-pick the data.
A system of capitalism presumes sound
money, not fiat money manipulated by a central bank. Capitalism cherishes
voluntary contracts and interest rates that are determined by savings, not
credit creation by a central bank.
The Congressional Budget Office has
been embarrassed repeatedly by making projections based on the assumption that
tax revenues and tax rates move in the same direction.
If Moses had been paid newspaper rates
for the Ten Commandments, he might have written the Two Thousand Commandments.
ISAAC BASHEVIS SINGER
I'm here as a product of process of
evolution, which doesn't make very many exceptions. And which rates life
Here's the problem if you keep raising
tax rates: You slow down economic growth.
When you take a look at the problems
our country is facing, debt is No. 1. The math is downright scary and the credit
markets aren't going to keep on giving us cheap rates.
GROWING POPULATION POSING FOOD INSECURITY
population: New Realities and Challenges for Human
Development" was the main theme at the two-day 14th annual
conference of the Population Association of Pakistan (PAP)
held in Islamabad last week in collaboration with the National
University of Science and Technology (NUST). Federal Minister
for Planning, Development and Reforms was the chief guest.
The Chief Guest,
Federal Minister for Planning, Development and Reforms, Ahsan
Iqbal spoke of the urgent need for action to address
Pakistanís unsatisfactory development indicators and stressed
the need to generate debates on these issues at all levels.
change to the narrative was required so that development became the focus for
further action so that the issues would not get brushed under the carpet," he
said adding that slow progress on development has to be reversed , and all
political parties should speak with one voice on the countryís future.....
During this past week KSE-100 Index
gained 1.91%WoW to close at 24,302 points while average daily traded volumes
declined by 25%WoW to 133 million shares. Key news flows during the week
included 1) Prime Minister Nawaz Sharif announced various tax incentives for
businesses to boost investment activity in the country, 2) PTA selected VPCML, a
foreign consortium, as consultant for the upcoming 3G/4G license auction, 3) the
GoP and ADB signed a US$430 million agreement to strengthen the BISP program, 4)
the PM ordered withdrawal of a notification, which allowed an
increase of up to 15% in medicine prices and 5)....