Textile sector companies, listed at the Karachi Stock Exchange, have
shown an impressive earning growth in the financial year 1998-99.
According to an analysis, prepared by a brokerage house, the textile
sector has shown a sign of cyclical upturn, with most companies recording an earning
growth in excess of 25 per cent.
Prominent among them include: Gulistan Textile 138 per cent; Gul Ahmed
Textile 64 per cent; and Sapphire Textile 53 per cent.
Similarly, synthetics also benefited from a cyclical upsurge with
earnings of Dhan Fibres and Ibrahim Fibres increased by 501 per cent and 422 per cent
But overall growth in the fuel and energy sector fell by over 17 per
cent. Gas companies gained from the increase in gas prices, registering an earning growth
of 46 per cent (SSGC) and 10 per cent (SNGPL).
Food manufacturing companies also recorded a strong growth, with a
clear bias towards branded foods makers like Lever Brothers, Nestle Milkpak and Rafhan
Profitability in the telecom sector also increased, primarily due to
tariff rebalancing of the PTCL that had a significant increase in the revenue generation.
Other sectors, which have experienced a positive earnings growth are
paper and packaging up 49.75 per cent, leasing 31.4 per cent, and autos 12 per cent.
Insurance companies also suffered a recessionary downturn with earning
growth falling over 14 per cent.
The fertilizer sector faced a problem of falling prices due to cheap
imports and increased local production. Both Engro and Fauji suffered a decrease in
earnings of 30 per cent and 18 per cent respectively.
Within IPPs, earnings of Hubco declined by 38 per cent in 1998-99.
$ trades in new band
The US dollar traded within a new unofficial band of Rs 51.95 and Rs
52.10 in spot transactions in the inter-bank market on Thursday 20 paisa over
previous rates of Rs 51.75 and Rs 51.90.
In the kerb market the dollar closed at Rs 54.60 and Rs 54.70 for spot
buying and selling showing a five paisa gain overnight.
Senior bankers said there was a great demand for the greenback in the
inter-bank market with forward premiums ranging between Rs 1.15-1.30 for six months; 55-65
paisa for three months and 20-25 paisa for one month. They said importers were anxious to
make forward booking of foreign exchange fearing that the rupee would fall further.
On Wednesday SBP had verbally allowed the banks to quote the US dollar
within a new unofficial band of Rs 51.95 and Rs 52.10 on higher cororate and trade demand.
Black money growing fast
Pakistan's parallel economy has been increasing at "an alarming
rate year by year", and 'black money' circulating within the country which was
estimated at Rs 16.96 billion in 1972, jumped to Rs 491.109 billion in 1996, with an
average growth rate of 22.93 per cent.
According to statistics with the Central Board of Revenue, taxes
amounting to Rs 202.561 billion were evaded in 1996, while the calculated rate of tax
evasion is more than 58 per cent.
The high rate of taxes and the lack of confidence among tax collectors
and tax payers is encouraging underground economy. It was one of the root causes hampering
process of development process in the country.
Officials said the Tax Amnesty Scheme 2000 has been evolved in best
interest of the country and is aimed to discourage black money. The objective of the
scheme is to control inflation by eliminating black money or underground economy.
The pre-tax profit earned by Allied Bank fell to Rs71 million in 1999
from Rsl69 million in 1998, a senior official told. He, said that the bank deposits grew
21 per cent to about Rs93.5 billion and the assets rose 20 per cent to around Rs 107
billion. The official said total advances of the bank increased 29 per cent to Rs 58
billion the major chunk of which went to the private sector.
The State Bank said on Wednesday banks would get 4.50 and 4.80 per cent
return in June on the foreign currency deposits placed with the State Bank. The SBP said
the return on one-week placement would be 4.25 per cent.
Gross liquid foreign exchange reserves that stood at $1.368 billion on
May 20 fell to $1.270 billion on May 31.
According to a SBP letter issued to the banks $1.270 billion worth of
liquid reserves also included $323.8 million worth of foreign currency deposits of the
banks placed with the State Bank.
The government on Wednesday borrowed some 1.2 billion rupees from the
inter-bank market by selling treasury bills of various tenures.
The State Bank sold the bills on behalf of the government. It sold
Rs590 million worth of three-month T-bills at a maximum rate of 6.97 per cent and Rs482
million worth of bills at 7.23 per cent. The SBP raised Rsl25 million through sale of
one-year T-bills at 7.61 per cent.
The auction of T-bills had attracted total bids worth Rs4.7 billion of
which the SBP accepted bids worth Rsl.2 billion and scrapped the rest.
WB credit for exports
Thomas Maxwell, former World Bank consultant and Dr. Asya Akhlaque,
coordinator have emphasized the need for making banking credit for exports available on
easier terms and quickly disbursable.
Addressing the members of all Pakistan Cloth Exporters Association here
Saturday, they said that in the changing scenario of world trade, Pakistan exporters faced
the added responsibility of pushing their exports to higher targets so that the country
could reduce the trade gap and also get rid of the debt burden, which was heavily
pressuring the national economy.