Forex purchases from kerb
to fund project
The State Bank has allowed a leading company engaged in manufacturing
of synthetic fibre to purchase from the inter-bank market and remit abroad 30 per cent of
Rs 4 billion in foreign currency.
The company would place this amount with an overseas bank for getting
confirmed a Rs 4 billion letter of credit it is opening here to import machinery for
expanding its synthetic fibres manufacturing facility.
Bankers say the company intends to buy the remaining 70 per cent of Rs4
billion in foreign currency from the kerb market and remit it abroad in instalments
through its fresh foreign currency accounts being maintained in Pakistan.
This reflects the growing significance of the kerb market in meeting
the foreign exchange requirements of the country.
The State Bank has already purchased more than $1.3 billion from the
kerb market in the first nine months of this fiscal year to meet its foreign exchange
Bankers said the company had finalized the terms of LC with a
consortium of banks comprising state-run and private local and foreign banks. They said
that the company had approached the State Bank through the consortium of banks to seek
permission for remitting abroad 100 per cent of the Rs 4 billion worth of LC in foreign
currency to serve as a cash collateral for getting the LC confirmed.
But SBP officials allowed the company in question to purchase and remit
abroad 30 per cent of the amount from the inter-bank market. Normally SBP allows 10 per
cent cash payment against LC but since the deal between the company and its foreign
supplier required 100 per cent advance payment it raised the limit to 30 per cent.
Senior bankers say the consortium of banks that is involved in this
deal includes (i) Habib Bank (ii) National Bank (iii) United Bank (iv) Allied Bank and a
couple of other local and foreign banks.
FIM to merge with LTVCM
The First Interfund Modaraba (FIM) said it proposed to merge with LTV
Capital Modaraba (LTVCM) and the process was expected to be completed by the end of 2000.
SBP calm, forward $ buying up
The tumbling of the Indian rupee on Thursday has fuelled forward buying
of the US dollar in the inter-bank market here but in spot transactions the Pak rupee
stood firm at 51.90 to a dollar.
Senior bankers said the State Bank kept its unofficial cap on spot
exchange rates unchanged at Rs 51.90 per dollar and did not indicate in any way that the
cap may be lifted or put at a higher level.
Reserves at $1.368bn
Gross liquid foreign exchange reserves stood around $1.368 billion on
May 20 down from $1.416 billion on May 13.
The latest State Bank statement released on Thursday reveals that on
May 20 total approved foreign exchange reserves stood at $1.160 billion whereas balances
held abroad in cash and short term securities totalled $208 million.
The gross forex reserves include some $330 million worth of foreign
currency deposits of banks placed with the State Bank.
Nafees Mills to raise its capital
Legler Nafees Denim Mills Limited a company on the textile
composite sector proposes to raise its paid-up capital by 43 per cent to Rs359.1
million, from Rs251.6 million "without issue of right shares to the company's
The major local sponsor, Nafees Cotton Mills Limited would pick up 4
million shares "against share subscription money" while a foreign investor in
the company S.p.A of Italy would be issued 6.750 million shares, against their receivables
in the company, equivalent to Rs67.50 million.
The Italian stakeholders, who have two of the seven nominees on the
company board, is said to have "given their firm and irrevocable consent" to the
Big five banks may get Rs7bn loan for Pasmic
The federal government has agreed in principle to issue a subordinated
loan of Rs 7 billion to the big five network banks, repayable in seven years with half the
mark-up guaranteed by the Pakistan Steel Mills Corporation (Pasmic) and the rest by the
A restructuring package of loan overdues of Pasmic amounting to Rs 19
billion was said to be finalised by the Governor, State Bank of Pakistan, Dr Ishrat
Hussain, and the Secretary-General, Finance, Moeen Afzal.
The package envisages repayment of the principal amount of Rs 12
billion by the Pasmic in 15 years on a mark-up of one per cent above the average treasury
bills rate of past six months.
Japan's aid to Pakistan
Japan's Foreign Ministry said on Tuesday that the government has
committed up to 953,000 US dollars in grants to Pakistan for tetanus vaccinations for
The ministry also said the government decided to extend about 33.8
million dollars in grants to Laos for improving a national highway, constructing a human
resource centre and easing its debt burden.
The aid for Pakistan will fund vaccinations for some 8.2 million
The ministry said the grants are for humanitarian purposes.
Move to sell Pak Saudi Fertilizers
Privatization Commission has invited the prospective investors for
pre-qualification to participate in the privatization process of Pak Saudi Fertilizers
It is an opportunity for local and foreign investors to own one of the
most profitable fertilizer units being operated in the public sector, says a press release
issued by PC here on Friday.
The sales turnover of the unit exceeded Rs 3.8 billion during 1998-99
and the share of the company in local urea market has been around 15. Total pretax profit
of the unit during 1998-99 exceeded Rs 2 billion and the total profit for last five years
has been about seven billion rupees.