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August 29, 1999

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

Pakistan 'to reschedule eurobonds'

Pakistan is set to announce a rescheduling plan for its eurobonds, seen as a worldwide test case, next month but might continue to honour coupon payments, officials and bankers said.

"There is already a decision in principle that the eurobonds will have to be rescheduled, only a plan has to be drafted and announced," a banker advising the government on the issue said.

The rescheduling is regarded as a test case of how to handle complex national debt and could have ramifications for other heavily indebted countries, notably Russia.

Finance Minister Ishaq Dar on Tuesday told reporters the government would decide in September whether to reschedule its Eurobonds.

"It is right now being debated at the Paris Club and other forums. We are taking legal advice, I think I will be able to give you a clear answer in about two weeks' time," Dar said.

However, a Finance Ministry official said an understanding with international and bilateral donors had already been reached that Pakistan would continue to honour coupon payments and would reschedule in a manner so that principal payments were staggered.

The first eurobond principle payment is due on December 22 when a five-year $150 million sovereign eurobond will mature.

An analyst at a foreign investment bank said two of the country's largest state-run banks had already accumulated a large chunk of the eurobonds in the past several months.

The analyst said another plan under consideration was to give the bondholders the option of having the interest and principal payments in rupees instead of dollars.

Gulf Commercial profit

Gulf Commercial Bank released its half-yearly unaudited results (ending June 30, 1999) showing a pre-tax profit of Rs 130 million - 78% more than half yearly (June 30, 1998) and 104% more than annual December 31, 1998 profit.

Money changers summoned

Federal government has expressed its deep concern over the renewed pressuree on Pak Rupee and has convened a meeting between the Finance Minister Ishaq Dar and currency dealers in Lahore Saturday.

The buying and selling rate for US Dollar in open market was Thursday quoted Rs 54.40/54.50 as compared to Rs 54.50/54.55 a day earlier in Karachi.

Dealers said the dollar rates have rose suddenly due to some speculative activity by vested quarters.

Govt borrows Rs9.92bn thru T-bills

The government on Wednesday borrowed Rs9.92 billion from inter-bank money market by selling treasury bills of different maturities.

Senior bankers said the State Bank auctioned on behalf of the government Rs9.92 billion worth of T bills of three-month, six-month and one-year maturity at different rates. They said SBP had received total bids worth Rs23.53 billion of which it accepted bids worth Rs9.92 billion and scrapped the remainder. They said SBP sold one year T bills worth Rs5.77 billion; six-mondh T bills worth Rs3.36 billion and three month T bills worth Rs784 million cut-off yields of 10.28 per cent; 10 per cent and 7.93 per cent respectively.

The bankers said the outflow of Rs9.92 billion coincided with a Rs2.5 billion inflow in the shape of maturity of three-month T bills and Rsl51 million inflow through payment of FIB coupon.

ADB to lend private sector directly

The Asian Development Bank is interested in asking direct lending to the private sector for putting up viable industrial projects in Pakistan.

This was stated by Dr Min Tang, Senior Economist of Asian Development Bank during meeting with Mr Maqsood Ismail, Vice President FPCCI and members of Managing Committee, a press release said here Tuesday.

He said that the ADB which hitherto was providing development loans to the public sector for projects in social sector and for development of infrastructure was slowly moving to support private sector projects. He asked for identification of projects in the private sector which ADB may consider to finance.

Vice-President FPCCI welcomed the ADB's interest and suggested that loans may be provided to the private sector through the commercial banks in the private sector.

Railways earnings decline

The total income during the 1998-99 was Rs 1,010 million against the target of 1,270 million which was 10.5 per cent less than that of 1997-98, as is evident from a report compiled by the Railways.

MCB cuts mark-up for KSE members

The Muslim Commercial Bank has reduced the rate of interest and sanctioned limits of approximately Rs 1.5 billion for the members of the Karachi Stock Exchange.

While meeting KSE Chairman Yasin Lakhani, Arif Habib and other members, the MCB announced reduction of 4 paisa per 1,000 per day.

Dollar up

The dollar has been on the rise in the interbank market for past two weeks. On Monday the greenback closed at Rs51.75 and Rs51.80 for spot buying and selling. On August 9 the green bill was trading at Rs51.50 and Rs51.60 in the interbank market.

MCB pre-tax profit

The Muslim Commercial Bank said it earned a pre-tax profit of Rs 794 million during the first half of 1999 up Rs 140 million over the same period in 1998.

IMF tranche: chances of disbursement improve

The prospects for the disbursement of next tranche of 280 million dollars by the IMF in September next have brightened following detailed talks here on Saturday between the finance ministry officials and the Fund's visiting deputy director.

Official sources said that IMF's Deputy Director for the Middle East Department Mr. David Burton and the review mission headed by Ms.Sena Eken had again held talks here on Saturday with the senior officials of the Ministry of Finance and discussed with them various issues, including the IPPs.