Net Asset Value of ICP Mutual Funds Fall
This has reference to a news item published in PAGE dated September 27
October 3, 1999 on page 3 with the caption "New Asset Value of ICP Mutual
The news item has based its information on the data provided on 3rd
September 1999, which has been compared with the data a month earlier. In the news item,
it was mentioned that smart rallies in Energy Sector and Banking Sector were not evident
in the Net Asset Values of our Mutual Funds. We may mention here that during this period
the KSE 100 Index fell by 8% from 1266.71 points to 1166.40 points, whereas the NAV of our
Mutual Funds decreased by only 5.4% (Average).
The Central Board of Revenue collected only Rs 16.2 billion in
Withholding Tax in the first three months, against a target of Rs 20 billion for the
quarter and Rs 85 billion for the financial year.
In the first quarter of 1998-99, the CBR had collected Rs 17.9 billion
(for the year Rs 72.5 billion), and the shortfall against the last year's same quarter's
WT collection is Rs 1.9 billion (9.5%)
SBP buys bills
The State Bank of Pakistan (SBP) Thursday conducted two-way Open Market
Operation (OMO) and purchased bills worth Rs 8 billion.
The bills were that of l-week and l-month reverse repo with a cut-off
yield of 10.50% and 10.25% respectively. The SBP, however, rejected bids worth Rs 2.4
billion for market treasury bills.
Pakistan's forex reserves stood at $1.468bn on Oct 9, said a central
bank report Thursday.
A weekly report of State Bank of Pakistan (SBP) said the approved
foreign exchange reserves in the country were estimated at $1.264 bn while approved
foreign exchange reserves held outside stood at $ 203.514m.
Govt's negative bank borrowing short of target
The government failed in keeping its negative bank borrowing at the
revised target of Rs 62 billion in 1998-99 as actual negative borrowing stood at Rs 25
billion at the end of the last fiscal year.
Sources close to the ministry of finance told that in the last fiscal
year the government placed Rs 93.4 billion in its special account for debt retirement
whereas it borrowed Rs 68 billion from the banking sector. Thus the year closed with a net
negative borrowing of Rs 25.4 billion.
Former Finance Minister Ishaq Dar had told the nation in his budget
speech on June 12 that the Government had retired Rs 62 billion worth of bank credit in
fiscal 1998-99. The budget documents also put the negative bank borrowing of the
government at Rs 62 billion in 1998-99. But sources close to the ministry told that the
actual government borrowing stood at Rs 68 billion at the end of June 1999 against
placement of Rs 93.4 billion by the government in its special debt retirement account with
the State Bank.
Thus in financial jargon the contraction in money supply was Rs 25
billion in fiscal 1998-99 against targeted Rs 62 billion. "This would result in
higher inflation," said a senior executive of a state-run bank.
Sources close to the ministry of finance say multilateral agencies have
taken note of the slippage in keeping the negative borrowing at the desired level adding
that this was one of the factors impeding immediate release of the fourth tranche of a
$1.56 billion loan.
For fiscal 1999-2000, the government had fixed the negative bank
borrowing target at Rs 13.6 billion.
The analysts say the release of fourth tranche of an IMF loan may be
further delayed for the same reason. Sources close to the ministry of finance say during
the first quarter of the current fiscal year the government borrowed around Rs 20 billion
from the banking system.
Rs3.2bn sale of new prize bonds
Government has attracted Rs3.2bn in 11 days with the sale of freshly
introduced Rs l5,000/- denomination prize bond, the Central Bank officials said.
The issuance of Rsl5,000/prize bond begin from Oct 1 and till Oct 11,
the branches of State Bank of Pakistan (SBP) from across the country reported sale of
Rs3.2bn worth of these bonds.
These bonds, meant to phase out Rs10,000/- denomination bonds, are
currently being sold only through the designated branches of SBP.
The higher denomination bonds were introduced by the Government at the
end of last month by the government. The new bonds will be issued in the denominations of
Rs 200/-, Rs 750, Rs 1,500, Rs 7,500/-, Rs 15,000 and Rs 40,000/- bearer type.
These bonds are replacing the bonds with denomination of Rs 100, Rs
500, Rs 1000, Rs 5000, Rs 10000, Rs 25,000/- respectively.
All the old bonds are supposed to be encashed by holders by June 30,
2000 and that no draw will be held for these bonds after Dec 15, '99. The minimum holding
period for these bonds shall be two months.
Rs550m Swiss loan for small enterprises
Switzerland will provide Rs 550 million during the next fiscal year to
develop small and medium enterprises in Pakistan.
The money will also be spent for priority areas such as the
humanitarian sector and the development of national resources.
This was decided at an Annual Bilateral Consultations for development
assistance 1999 between Pakistan and Switzerland in the Economic Affairs Division.
The discussions were held in a cordial atmosphere and some of the
issues relating to development projects were discussed and thrashed out in detail.
Foreign investment declines in first quarter
Foreign portfolio investment has declined by more than 100 per cent and
foreign direct investment decreased by 70 percent during first three months of the current
fiscal as compared to the same period last year.
Sources said that the UK, the main contributor of foreign investment in
Pakistan, has withdrawn its portfolio investment of $ 47 million and direct investment of
$ 40 million during first two months of the current fiscal.
The portfolio investment was $ 27.3 million in the year 1998-99 and
direct investment was $403 million while the investors from 12 foreign countries have
withdrawn their portfolio investment from Pakistan. The country has received only more
than $30 million during first three months of the current fiscal.
Sources said the investment from the USA was around $25 million from
UAE less than $15 million and from Japan was $ 12 million. The investment from Germany,
France, Hong Kong, Italy, Saudi Arabia, Canada, the Netherlands and Korea and some other
countries was $30 million which shows poor sign of investment.
The USA and the UAE have invested only $15 million in portfolio
investment during first three months of the fiscal.