Jul 03 - 09, 2000
$533.8m net outflow
on WB, IMF debts
Pakistan, in its position as a heavily indebted country
notwithstanding, became the net exporter of capital to the tune of $533.8m on account of
the debt owed to the World Bank and International Monetary Fund in '99-2000, according to
an official source.
With the commitments and disbursements of aid declining, the net inflow
of resources from the World Bank amounted to $250m but a result of the debt service
payment to it of $514.2m, Pakistan suffered a net negative outflow of $264.2m.
Pakistan received no aid from the IMF in the outgoing financial year.
Nevertheless, it had to pay $329m on account of its outstanding debt.
The situation was mitigated somewhat by the fact that the inflow from
Asian Development ($423.1m) exceeded the debt service payment of $363.5m by $59.5m. This
reduced the net outflow capital to $533.8m.
The net transfers of aid in the decade of the 1990s averaged at $593m
per annum. The highest net transfer (after payment of principal and debt) occurred in
'91-92. It was $853m. By '96-97, it had turned negative by $34m, thanks to decline in
disbursements and growth in debt service liabilities.
In the years preceding debt-rescheduling in '98-99, the debt service
snow-balled from $1316m in '90-91 as against disbursements amounting to $2045m to $2353m
as against disbursements amounting to $2800m in '97-98. In '90-91, Pakistan was left with
$729m or 36% of inflow. As the debt service liabilities soared at the rate of 8.5% per
annum, the net inflow six years later (that is, in '97-98) was down to 16% of
MoU for $100m ADB loan signed
Asian Development Bank (ADB) has agreed to support establishment of a
Microfinance Bank (MFB) and the development of microfinance sector in Pakistan. Through a
Memorandum of Understanding (MoU) signed between the visiting ADB team and the Ministry of
Finance on Saturday, it was agreed that the ADB would provide a loan of $100m on soft
terms for a period of 32 years with an initial grace period of 8 years at an interest rate
of 1 to 1.5%.
The MFB will be set up as a private-public partnership and the major
part of equity will come from commercial banks. Government will create an Endowment Fund
for social mobilization and capacity building among the poor.
The Board of Directors of MFB which will comprise of professionals,
with due representation from women will be fully autonomous in running the affairs of the
Six LPG cos to pay Rs287m dues
Six LPG companies have entered into an agreement with National
Accountability Bureau (NAB) by agreeing to pay their dues worth Rs287 million.
These companies reached this out of court settlement after marathon
negotiations with the NAB authorities regarding the cases against them for ex-Dhodak
allocation. These include Eirad Company Limited, Wak (Pvt) Ltd, Lub Gas (Pvt) Ltd, Mehran
Gas Company, Balochistan Gas Company Ltd and Ranja Enterprise (Pvt) Ltd.
Security Papers BMR
The National Bank of Pakistan will open a Rs942 million letter of
credit on behalf of Security Papers Ltd for the import of machinery required for BMR of
the printing plant of SPL. NBP acting President Muzaffar Iqbal and SPL Chairman Nur Ahmad
Shah signed an agreement in this regard here on Tuesday.
SPL Chairman Nur Ahmad Shah told that the BMR would cost Rs1.242
billion of which NBP would arrange Rs942 million by opening LCs for import of machinery:
SPL on its part will arrange Rs300 million to meet other expenses relating to BMR of
three-decade old printing plant. Shah said after the 18-month BMR the plant would be
producing 2000 tonnes of printing paper per year: currently it produces only 1400 tons.
The NBP credit line of Rs942 million will be repayable within six
Lending rate falls
Weighted average deposit rate of all banks declined from 8.47 per cent
in December 1997 to 7.30 per cent in December 1999. In the same period their weighted
average lending rate fell from 16.62 to 14.40 per cent.
Dollar up 35 paisa
The US dollar rose to Rs55.30 and Rs55.35 for spot buying and selling
in the open market on Tuesday from Rs54.90 and Rs55.00 on Monday. Bankers and top currency
dealers said the rupee fell as people swarmed to buy greenbacks in panic fearing further
downward adjustments in exchange rates in the inter-bank market before the close of fiscal
year on June 30.
HBL deposit scheme
State-run Habib Bank has launched a deposit raising scheme named Summer
Prize Bonanza: From the president to the peons of the bank all can participate in the
ongoing scheme that would continue till mid-September.
United Bank Limited
UBL is shown to have swung back to a pretax profit of Rs1.3 billion for
the year ended Dec 31, 1999, from a significantly huge loss of Rs6.6 billion a year ago.
Operating profit for the year ended Dec 31, 1999 stood at Rs1.4 billion, which reflects
phenomenal growth over the profit of Rs133m made a year ago from operations.
Mergers & Acquisitions
PICIC: Pakistan Industrial Credit and Investment Corporation is
likely to strike a purchase deal with an Omani group by next month to acquire its shares
in Gulf Commercial Bank.
Shell: Royal Dutch Shell said on Friday it will sell its oil and
gas exploration operation in Pakistan as the investment was not providing enough return to
Union Bank: The State Bank on Friday issued orders about
acquisition of the Bank of America business in Pakistan by Union Bank.
Shares acquired: Dewan Salman Fibre Limited confirmed on Friday
its acquisition of 200 million majority shares, of Rs. 10 each, in Dhan Fibres Limited at
a total consideration of Rs. 4.2 billion.
Modarabas: First Confidence Modaraba has drawn out plan to merge
with First Crescent Modaraba, the management companies of the modarabas notified the stock
exchange on Friday.
The National Insurance Corporation (NIC) has declared a surplus of Rs
400 million for 1999 and it also contributed Rs 558 million during the year towards income