Engro Chemical Pakistan Ltd has achieved the highest ever urea
production in a quarter and declared a 2nd interim dividend of Rs.2/- per share.
SBP sells Rs28.35bn T-bills
The government on Wednesday borrowed Rs 28.35 billion from inter-bank
money market through sale of treasury bills of different tenures. The bills were sold by
the State Bank on behalf of the government.
The State Bank said the auction of T-bills had generated bids worth Rs
40.15 billion of which bids worth Rs 28.35 billion were accepted. SBP said it sold Rs
21.40 billion worth of six-month T-bills at a maximum yield of 10.35 per cent and Rs 6.50
billion worth of one-year T-bills at 10.99 per cent. SBP said it also sold Rs 450 million
worth of three-month bills at 8.86 per cent.
Over $1 bn US investment likely
Companies in the USA are waiting to invest more than $1 billion in
Pakistan if the IMF programme is back on track, disclosed diplomatic sources.
Sources told that some companies and individuals are eager to invest in
Pakistan, but are looking for risk insurance cover on their investment. Generally the US
investors go for two kinds of risk cover, i.e. political and financial, neither was
available for Pakistam in the recent past.
The political risk is provided through Overseas Private Investment
Corporation (OPIC) of USA, which is a state body.
The financial risk on investment is covered by different insurance
companies, which due to poor credit rating of Pakistan were not forthcoming till an IMF
programme is in place.
Banks see demand for credit falling
Demand for credit in Pakistan has fallen off despite low interest
rates, signalling a slowing of the economy and spewing trouble for financial sector
profits, bankers and analysts said on Tuesday.
They said the lack of credit demand from the private sector and
uncertainty about government credit requirements would keep Pakistan's banking system
liquid and interest rates down.
'These are signals of a weak economy, and as things are going we expect
overall demand to remain stagnant for a year or more,' said Jehanzeb Naseer, head of
research at investment bankers Jardine Fleming Pakistan Ltd.
Bankers said growth in credit demand had fallen since the May 1998
nuclear tests which resulted in economic sanctions.
Banks responded earlier in the year by cutting their prime lending
rates by three percentage points to as low as 15 per cent.
Analysts said another indication that overall demand in the economy was
falling was the inflation rate.
Consumer prices rose 3.35 per cent in the 12 months to September, the
lowest rate of growth in 12 years.
Analysts said more disturbing was that credit demand from textile and
cotton traders, which usually soars from September with the start of the cotton-picking
season, has been much lower than in previous years.
Pakistan expects a bumper cotton crop of up to 11 million 375-lb bales
in fiscal 1999/2000 that starts in July, more than two million bales more than the
The cotton and textile industries not only contribute a major share of
Pakistan's gross domestic product, but also account for more than 65 per cent of its
Rupee gains 10 paisa in kerb
The Pak Rupee gained 10 paisas against US dollar in the kerb market
Tuesday as demand for dollar subsided further, dealers said.
The dollar was being bought and sold at Rs 54.15/54.20 as compared to
overnight rates of 54.25/54.30 a day earlier.
Rs 15,000 bonds fetch Rsl2bn
The newly introduced Rs 15,000 denomination prize bonds have attracted
Rs 12.22 billion as investment from people across the country.
According to statistics obtained here on Monday from the State Bank,
these Rs 15,000 prize bonds were issued on Oct 1 and till Oct 31, this denomination's
bonds worth Rs 12.22 billion were sold out.
The Rs 750 denomination prize bonds, put on sale from Oct 15 attracted
purchasings worth Rs 2.97 billion till Oct 31.
The Rs 750 prize bonds were in such a demand that State Bank had to
arrange additional supplies.
$ 7.3 billion withdrawn from FCA
The foreign currency depositors withdrew or converted into dollar bonds
an amount of US$7.317bn till Oct 31 from their foreign currency accounts which were frozen
on May 28, 1998.
The US $ 2.3 B are now left in the old foreign currency deposits
according to official statistics obtained here Monday.
According to a break-up, the depositors have withdrawn US $ 5.701 B in
rupee terms and converted US $ 1.616 B in special dollar bonds.
The foreign currency deposits had amounted to US $11 B and out of that
US $1.4 B are swap funds.
Banking sources attributed the speedy withdrawal of funds from old
accounts to its diversion to the prize bonds the State Bank of Pakistan introduced in the
first week of September with a revised denomination.
Forex reserves up at $1.596bn
The State Bank said on Saturday Pakistan had foreign exchange reserves
worth $1.596 billion on Oct 30. It disclosed the figure to the banks in a circular letter
issued to inform them about the rates of return on placement of foreign currency deposits
On Oct 16, four days after the military take-over, forex reserves
totalled $1.517 billion.
HBL to close small branches in UK
State-run Habib Bank Ltd (HBL) said on Monday it would be closing some
of its existing smaller branches in the United Kingdom but it did not disclose their
An HBL press release said the closing of smaller branches would enable
the bank to increase its focus on improving and upgrading a more central or main branch
for each region and to meet the requirements of Financial Services Authority (FSA). The
Authority is the regulator for the banks in the UK.