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FINANCE

Mar 27 - Apr 02, 2000

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SBP sells TBs of Rs900m

The State Bank on Wednesday raised Rs 900 million worth of short term loan for the government from banking system by selling treasury bills.

The central bank sold Rs 500 million of six-month T-bills at 7.44 per cent; Rs 300 million of three-month bills at 7.28 per cent and Rs 100 million bills of one year at 7.89 per cent. SBP said it had received total bids worth Rs 12.7 billion for T-bills of these maturities of which it accepted bids worth Rs 900 million only and rejected the rest.

Rs2.7bn investment by textile group

Recent increases in cotton textile led exports have triggered a round of investment activity with one group alone making new investment of nearly Rs3 bn to expand its value added exports.

According to sources in the Nishat group of companies which has made the investment as much as of Rs 2.7bn has gone into additional dyeing and finishing facility with a capacity of 2.5 million metres per month, 120 air jets of weaving capacity, 22,000 spindles and 8.2 MW of power generation. The project cost includes Rs 1.5bn bank-financing.

Micro Credit Bank by May

The Micro Credit Bank is expected to start functioning in May this year.

This was stated by the Federal Minister for Finance. and Economic Affairs, Shaukat Aziz, while talking to reporters here on Monday after the inaugural ceremony of the Small and Medium Enterprises Association of Pakistan.

The Minister said that ordinance is being prepared for the bank and legal formalities are being chalked out.

He stated that Ghalib Nishter, the CEO of the micro credit bank is in the process of forming his team and recruitment has started.

The Minister said that the head office of this bank will be located in Islamabad.

Earlier, Shaukat Aziz said that the small and medium enterprise sector has to be the leader in spurring growth and that the government is fully committed to promoting this sector and removing all bottlenecks that in the past have impeded its growth.

He was speaking as chief guest at the inaugural function of the Small and Medium Enterprises Association (SMEA) of Pakistan.

The Minister said that we want our banking system to redirect their efforts in favour of the small and medium enterprises which hardly get a fraction of bank credit but have consistently performed better in repayment of their obligations. Accordingly the provision of credit to this sector will help the banks in the improvement of their balance sheets.

He stated that the government would also support the small and medium enterprises' growth by funding training and research programmes, marketing of their products through Export Promotion Bureau (EPB) and simplifying the regulatory regime around their working including tax and labour law.

HBL plans to shut 110 branches

Habib Bank plans to shut down 110 domestic branches that are either loss-making or earning marginal profits: the bank has closed down 222 such branches in the past three years.

HBL officials say they are waiting for State Bank permission to implement the plan. They need SBP permission because all 110 branches are located in villages and hamlets in un-banked areas — the areas where no branch of any bank exists within 2 kilometre.

NAV of all Mutual Funds improves

The Net Assets Value (NAV) of all 26 Mutual Funds under the Investment Corporation of Pakistan (ICP) has improved considerably since the stock market began climbing in November last year, though market price of about half a dozen funds have shed their values, shows the comparison of the weekly statement released by the Corporation on March 13, 2000 with the one on November 1,1999.

NAV of the 4th ICP which stood at Rs61.73 on March 13 posted the largest gain of 94 per cent from Rs32.31 on November 1. SEMF-A was up to Rs45.86, from Rs26.08, recording a rise of 77 per cent over the four and a half months' time. The 20th ICP rose 69 per cent to Rs26.81 from Rs14.88; 13th ICP climbed to Rs32.72, from Rs55.52, a growth of 67 per cent and the sixth ICP was up 59 per cent to Rs36.02, from Rs22.62. Other funds also were seen to have made their way up.

SBP orders HBL, UBL to stop prize schemes

Habib Bank Ltd., has called off its prize scheme for home remittances and the United Bank Ltd. is expected to follow suit as the State Bank of Pakistan has ordered the stoppage of the sale of the product in local branches and restricted the scheme to overseas branches of the banks.

According to informed sources, some competing banks had provided proof to SBP of remittance drafts being made in local branches by these banks.

Bank profits fall

The profits of private banks listed at the Karachi Stock Exchange (KSE) fall as bank credit remained low because of no new investment made in the country and decline in treasury bill rates.

The accounts of nine banks were available, out of 13 listed at the KSE. There has been a sharp decline in mark-up rates and much lower return is being offered on investments in government securities as well as in inter-bank market based on substantial cut in SBP discount rates. As a result, the profit margin remained under pressures throughout 1999.

The mark-up/interest and discount and/or return earned by nine banks fell to Rs 14.631 billion in 1999, from Rs 15.597 billion of 1998, showing a drop of 6.19 per cent.

ABN AMRO Bank & UBL Close Debt Syndication deal with WAPDA

A one year debt syndication of PKR 1 5 billion was arranged for the Water and Power Development Authority (WAPDA) by ABN AMRO Bank and United Bank Limited, as Joint Arrangers. Funding was raised by a number of leading banks to meet WAPDA's current requirements. Participants include ABM AMRO Bank, United Bank Limited, Habib Bank Limited, National Bank of Pakistan and Bank Al Falah.

A signing ceremony was held on March 24, 2000t at WAPDA House in Lahore. Present at the occasion were, Muhammad Aurangzeb, Country Manager ABN AMRO Bank and Major General Sarfraz Iqbal, Deputy Chairman WAPDA.