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FINANCE

August 22, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade

Dollar rates on rise in kerb

The Pak Rupee was seen fast losing ground against US dollar in the inter-bank and kerb market as well, dealers said here Thursday.

The Rupee lost 5 paisa to 54.10/54.15 for buying and selling in the open currency market and lost almost 10 paisa in the interbank floating market to 51.70/51.84 at the close of the day, treasury officials at various banks said.

KPT to earn 11pc less from cargo handling

The Karachi Port Trust (KPT) has projected an 11 per cent fall in its income from cargo handling in 1999-2000 compared to 1998-99. But KPT officials say this may not stop KPT from earring an operating surplus of Rs 620 million in current fiscal year.

KPT officials say that the income from cargo handling has been projected at Rs 1.343 billion for 1999-2000 against the 1998-99 income of Rs 1.505 billion showing a decline of Rs 162 million.

ADB to provide $ 1.635bn loan

The Asian Development Bank will provide $ 1.635 billion assistance to Pakistan during 2000-2002, according to tentative arrangement worked out between Manila and Islamabad.

It is learnt that of this $ 940 million will be from Asian Development Fund (ADF) and $ 710 million from ordinary credit resources (OCR).

The Bank's programme is based on the priorities identified in the country operational strategy (COS) approved in 1995. The guiding principles being to address the problems of weak governance, lack of absorptive capacity, high external debt and special focus on poverty alleviation.

The Bank will provide concessional assistance for poverty reduction, governance issues and social sectors while quick disbursing assistance will be on OCR terms.

It may be mentioned that due to economic sanctions, ADB did not give any new assistance to Pakistan in 1998 while for 1999, the Bank is providing $ 887 million of which $ 175 million are from ADF and $ 712 million from OCR.

$28.9m foreign investment outflowed in Jan-July

The outflow of foreign investment in seven months of 1999 amounted to 28.932 million dollars because of a couple of negative developments, especially the lingering dispute between private power producers and the government.

The foreign investors during the January-July period bought 218.756 million shares worth Rs 3.443 billion while they sold 304.943 million shares valued at Rs 4.933 billion, hence the outflow totalled at Rs 1.490 billion or 28.932 million dollars.

Traders said that the main factor, which hurt the confidence of the foreign investors was the dispute between the private power producers and the government. The tussle had badly tarnished the image of Pakistan and foreign investment not only plummeted in the stock market but in other sectors too.

Rs6-7bn withdrawn from lottery schemes

People have withdrawn six to seven billion of rupees from lottery schemes of three major banks in the past one month and a few days. As a result the cumulative amount of these deposits has fallen to around Rs 38 billion from Rs 45 billion at the beginning of July.

Officials of state-run Habib Bank and United Bank and partly-privatized Muslim Commercial Bank told that the three banks had so far witnessed withdrawals of about Rs 6-7 billion from their prize based deposit schemes since July 11.

On July 10, the State Bank had asked these banks to phase out the said schemes by Dec 31, 1999 and refrained them from introducing similar new schemes in the future.

The withdrawals so far from the CrorePati scheme total around Rs 2.5 billion," HBL director marketing Umer Fareed told.

An MCB official said withdrawals from the "Maala Maal" scheme totalled about Rs 23 billion. "In UBL people have so far withdrawn about Rs 1.5 billion from ZarAmaad scheme," said a UBL executive claiming that there had been almost no withdrawals from the CarAmaad scheme.

Before the State Bank ordered phasing out of these schemes on July 10, HBL had retained Rs 20 billion worth of deposits raised through its CrorePati scheme and MCB had in its coffers Rs 12 billion generated through "Maala Maal". By the same time UBL was also boasting of Rs 13 billion worth of deposits raised through its two prize scheme.

Executives of the three banlcs say the pace of withdrawals from their prize-based deposit schemes was pretty high immediately after July 10 as the State Bank orders for their phasing out had panicked the depositors. "But now the pace has slowed down," one of them informed.

Banks want more cuts in NSS return

Banks are eagerly waiting for further cut in interest rates on national saving schemes (NSS) which has become inevitable after inflation fell to 5.7 per cent in fiscal 1998-99 from 7.8 per cent in 1997-98.

Senior executives of state-run banks say that with the 2.1 per cent fall in inflation there seems to be no justification for the interest rates on national saving schemes and accounts to remain as high as 11.0-16.0 per cent.

Major banks cut lending rates by 1-2 per cent in early April on the assurance by the government that return on NSS would be cut accordingly. Maximum lending rates of three out of five major banks were 18 per cent and that of two other banks 18.25 and 19.0 per cent respectively.

Engro profits fall

Engro Chemical Pakistan Limited reported 21 per cent drop in net income to Rs382 million for the half year Jan-June 1999, from Rs317 million in the corresponding period of the previous year.

MCB service charge on fresh FCY deposits

Partly privatized Muslim Commercial Bank is receiving a half-yearly service charge from the holders of fresh foreign currency accounts where average balance falls below a certain amount, MCB sources told.

The service charge is $5 on dollar deposits with less than $500 in balance; pound sterling 3 on pound-sterling deposits with less than 300 pounds in balance; Deutsche mark 10 on DM deposits with less than DM1000 in balance and Japanese yen 650 on JPY deposits with less than JPY 65000 in balance.