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May 22 - 28, 2000

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

Industrial investment plummets

The private sector borrowed only Rs2 billion from banks for fixed investment in the first nine months of this fiscal year against Rs11 billion in a yearago period. But its borrowing for meeting working capital requirements rose to Rs 18 billion from Rsl5 billion a year ago.

Bankers say low borrowing for fixed investment shows slowing down of industrial expansion in nine months to March 2000 but many of them hope the trend may change.

The State Bank says industry grew only 1.5 per cent in first nine months of this fiscal year against the full-year target of 5.5 per cent. Its third quarterly report says the pace of growth may remain all the same at the end of the fiscal year in June.

But this does not imply that the private sector borrowing for fixed investment would also remain stagnant.

Top bankers say the demand for long-term credit has started picking up and private sector borrowing for fixed investment may rise by the end of the fiscal year.

A senior executive of staterun National Bank said his bank had sanctioned Rsl.5 billion for BMR projects of some textile mills in four months to April. When asked how much of the amount had so far been disbursed, he said: "Normally there is a four to six week lag in sanctioning and disbursement." This means that by the end of the year the bank would have disbursed this amount.

A senior executive of staterun United Bank said his bank had also sanctioned more than Rsl.5 billion for BMR projects in the private sector— mostly in textiles.

He said actual disbursement of funds might cross this mark by June.

Merger move in Prudential Group

The Prudential Group plans to make certain strategic moves, which are understood to be aimed at facilitating the merger of its commercial bank with the other two financial services companies: The Discount & Guarantee House and the group's Investment Bank.

Notices published by the group in newspapers on Wednesday said that the Prudential Commercial Bank Limited has called an Extra Ordinary General Meeting (ExGM) of members on June 8, when a special resolution would be moved to raise the bank's authorized capital from Rs600 million to Rs2 billion. The registered office of Prudential Commercial Bank Limited is situated in Islamabad.

Al-Mezan to float Rsl80m shares

Al-Meezan Investment Bank Limited proposes to float shares of the value of Rsl80 million for public subscription, Chairman Karachi Stock Exchange, Arif Habib confirmed to on Thursday.

Less than three years after it had received permission to commence business in the autumn of 1997, the Al-Meezan Investment Bank Limited has decided to go for public flotation.

26 ICP funds valued at Rs6.3bn

The aggregate market value of portfolio of 26 Mutual Funds under the Investment Corporation of Pakistan (ICP) amounted to Rs 6,339 million, but their market capitalization stood at about a half of that at Rs 3,199 million, a statement by the ICP on May 10, showed.

Crescent Spinning to issue right shares

To strengthen the capital base of the company, the directors of Crescent Spinning Mills Ltd intend to inject fresh equity of Rsl2.2 million by offering right shares at 10% discount, that is, Rs9 per share to the existing directors.

PTCL pre-tax profit up 46.5pc

Pakistan Telecommunication Co (PTCL), has shown an increase of 46.5% in the pretax profit for the nine months accounts ended March 31, as compared with corresponding period of the last year, an official announcement said. Total revenues during the period stood at Rs42.91bn as compared with Rs37.96bn of nine months period ended March 31, '99 showing an improvement of 13.0%.

Reserves at $1.416bn

Gross liquid foreign exchange reserves stood around $1.416 billion on May 13 down from $1.479 billion about a month ago.

The latest State Bank statement released on Thursday put total approved foreign exchange reserves at $1.185 billion and balances held abroad in cash and short term securities at $231 million. The gross forex reserves include more than $300 million worth of foreign currency deposits of banks placed with the State Bank.

Askari Commercial Bank Ltd.

"While Army Welfare Trust continues to be a major sponsor of Askari Commercial Bank Ltd., the two have an arms-length relationship with each other. Askari Bank continues to remain very liquid, despite freezing of the foreign currency accounts, as there was no run for deposits withdrawals in the post blast scenario — a positive reflection of the trust that the public has in the Bank.

Because of the high liquidity, ACBL had invested large sums in government securities. However in view of the rapid decline in the returns from Government paper, ACBL has aggressively, but prudently, increased its advances portfolio in a well diversified manner to improve the yields of its assets portfolio. In particular, Askari Bank is going into retail banking in a focused manner and is poised to give tough competition to local and foreign banks, in this area of activity, for which the bank enjoys considerable skills and expertise.".