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Sep 12, 1999

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

20pc dividend

The board of directors of Indus Motor Company approved a cash dividend of 20 per cent for the shareholders, as the company earned Rs501.3 million in pre-tax and Rs251.2 million in after-tax profits during 1998-99.

Forex reserves at $1.557bn

Pakistan's foreign exchange reserves fell $51 million to $1.557 billion on September 4, from $1.608 billion on August 28.

The latest State Bank figures released on Thursday the country had approved forex reserves worth $1.355 billion whereas its forex balances held abroad totalled $202 million on September 4.

On August 28, the approved reserves stood at $1.394 billion and the balances held abroad totalled $213 million.

Inter-bank market may stay liquid this month

The interbank money market would witness an inflow of Rs 54 billion in September in the shape of maturity of treasury bills and federal investment bonds which may keep the market liquid if the government or the State Bank do not indulge in big borrowings.

Bankers said the market received the first inflow of Rs 11.4 billion in the form of maturity of one-year T-bills on Tuesday the impact of which was offset on Wednesday due to a government borrowing of Rs 17.8 billion.

They said SBP sold around Rs 12 billion worth of T-bills of six-month maturity at a maximum yield of 10.28 per cent and Rs 5.8 billion worth of one-year T-bills at 10.69 per cent.

10 percent income tax on national saving schemes

The Central Board of Revenue (CBR) has notified 10 percent Income Tax on profit or interest on any National Saving Scheme.

Following is the text of SRO 1012(I)/99.

In exercise of the powers conferred by sub-section (2) of section 14 of the Income Tax Ordinance, 1979 (XXXI of 1979), the federal government is pleased to direct that the following further amendments shall be made in the second schedule to the said ordinance, namely:- In the aforesaid schedule (1) in part I, clauses (72), (73) and (160) shall be omitted and (2) in part II, after clause (5), the following new clause shall be inserted, namely:

"(5A) In case of any person, being a resident, the tax from profit or interest on any National Saving Scheme, shall be deducted at the rate of ten percent of such profit or interest."

1-2pc cut in interest rate on $ bonds

The government has cut interest rates on the dollar bonds by 1-2 per cent in an apparent move to accelerate conversion of frozen foreign currency deposits into rupees rather than into bonds.

A government notification received at the State Bank said the profit rate on 3-year bonds had been reduced to 1 per cent over six-month LIBOR (London interbank offered rates) from 2 per cent over six-month LIBOR. It said the profit rates on 5-year and 7-year bonds had also been cut to 1.5 per cent over six-month LIBOR and 2 per cent over six-month LIBOR from 3 per cent and 4 per cent over six-month LIBOR respectively.

"The revised profit rates shall be applicable only to bonds issued on or after 3rd September, 1999," said a circular issued by the State Bank to all the banks informing them of the government decision. "The move is apparently aimed at speeding up the conversion of frozen foreign currency deposits into rupees rather than into bonds," said a foreign bank treasurer.

Up to Sept 2, people had converted $1.468 billion worth of frozen foreign currency deposits into dollar bonds and $5.567 billion worth of deposits into rupees.

Pakistan had frozen some $11 billion worth of foreign currency deposits on May 28,1998 after making nuclear explosion the same and had allow people to convert such deposits into rupees at a fixed rate of Rs 46 to a dollar. Then in August 1998 dollar bonds were introduced for the same purpose. These bonds were made more attractive in November 1998 by increasing the profit rates and simultaneously slashing maturity period from five, seven and ten years to three, five and seven years.

Banks asked to give detail of BEL's accounts

The State Bank of Pakistan (SBP) has directed all banks and Development Finance Institutions (DFIs) to provide all details of bank accounts maintained by and in the name of Bankers Equity Limited (BEL).

Banking sources said that the details also include that of Foreign Currency Accounts and other accounts maintained till August 31, 1999.

Moreover, the bankers were asked to give details of accounts which were opened but closed during the period from June 18, 1997 to Aug 31,1999.

PIA profit

The profit of Pakistan International Airlines recorded a growth of 39.7 percent to Rs 211 million during the first six months of 1999 compared to the corresponding period last year, despite substantial increase in competition from domestic and international airlines under the new aviation policy.

$25.2m foreign investment in July

The country attracted $25.2 million of foreign direct investment (FDI) in July, 1999.

During the first month of the current fiscal year, the maximum inflow of $ 10.1 million of FDI from the USA was recorded, followed by $ 6.3 million from Japan and $ 4.8 million from the United Kingdom.

The other contributions came from Netherlands $ 0.4 million, UAE, $ 0.3 million, Germany, $ 0.2 million, $ 0.1 million each from France, Hong Kong and Italy, while $ 2.8 million from other sources, according to the figures of the State Bank of Pakistan.

The FDI of 25.2 million in July, 1999 shows a net decline of $ 6.4 million, when compared with the same period of the last year.

Pakistan attracted FDI of $ 376 million in the previous fiscal year, dropping by around 37 per cent when compared with the FDI inflow of $601.3 million in the year 1997-98.