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Jul 31 - Aug 06, 2000

ADB agrees to offer $400 million loan

The Asian Development Bank has agreed to offer loans worth $350 to $400 million during this year for a number of projects, including the 'trade enhancement loan' for small and medium enterprises. A high-powered ADB mission made this assurance during talks with Finance Minister Shaukat Aziz on Monday.

The mission informed the minister that the ADB had no political demands and that all the new loans being discussed and finalized with the government would be offered, provided Islamabad fulfilled the economic criteria, sources said. The minister was also assured that the capital market loan of $125 million might be offered shortly.

A new 'foreign currency export facility loan' was also discussed. Initially, the ADB is likely to offer $100 million for the purpose.

Besides, the ADB is considering making equity investment in Pakistan to help establish 'export finance guarantee agency'. Negotiations were held for the second capital market loan and the key components of this loan included broadening and deepening of equity market improvement, governance of stock exchanges and corporate laws, development of domestic debt market and development of institutional investment.

For 2001, the power sector restructuring loan of $250 million is also being finalized. Another $300 million legal and judicial reforms loan with $100 million for public administration reform is in line for an early approval.

The ADB has already announced that it will offer $2.8 billion to Pakistan under a new three years programme for 64 projects. The programme 2000-2003 will, however, be subjected to a satisfactory implementation performance and in line with the IMF loan programmes.

SBP intervenes to check dollar rise

The State Bank on Thursday had to intervene in inter-bank foreign exchange market to keep the exchange rates within a desired level. Senior bankers said SBP intervened when the dollar shot up to Rs53.65: after the intervention the dollar slipped and settled around Rs53.35.

Bankers said the intervention was very mild and SBP had hardly poured in $1.5-$3.0 million into the market but they admitted that it helped in checking the rise of the dollar against the rupee. It was the first intervention after the lifting of an unofficial cap on inter-bank exchange rates on July 20.

"It changed the entire sentiment," remarked treasurer of a big local bank. "Exporters started selling their export proceeds and importers slowed forward bookings." They did so after testing an undisclosed benchmark of exchange rate that SBP officials would not like the market to cross. For most of the market players it was Rs53.50 to a dollar.

FWBL earns

First Women Bank Limited earned Rs13.2 million pre-tax profit during last six months till the end of June, 2000 with further improvement in its deposits, said FWBL President Ms Akram Khatoon.

EPZs expect to attract $300m investment

Chairman Export Processing Zones Authority (EPZA) Maqsood Ismail said on Saturday that under new incentive package offered by the government to free zones are expected to attract around $300 million investment during the next two to three years.

Addressing a press conference The EPZA chairman said: "Now we have some product to sell for attracting new investment in our export processing zones which have to compete with other free zones of the region."

SECP allows merger

Securities & Exchange Commission of Pakistan (SECP) here on Wednesday allowed the merger of Atlas Lease Limited and Atlas Investment Bank Limited with the condition, inter alia, that the merged company will not engage in commercial banking business except with the permission of ministry of finance or State Bank of Pakistan and observing their conditions regarding capital etc, according to an official source.

Stake in white oil pipeline sought

Shell Pakistan Limited is moving to the detailed phase of its dialogue with the Pak-Arab Refining Company (PARCO), aimed at taking 26 per cent equity stake in the $530 million white oil pipeline project to transport petroleum products from Port Qasim to Mehmoodkot.

The pipeline will deliver substantial economic benefits to Pakistan for years to come and there is no cleaner and safer way to feed the market heartland, Shell said in a press release.

"We still have work to do, but we feel positive about this project based on what has been done so far," the company said.

Nafees Cotton to invest Rs40m

Nafees Cotton Mills Ltd proposes to invest Rs40 million in associated company, Legler-Nafees Denim Mills Ltd.

The investment, which would amount to 14.3 per cent of the equity of investee company, is reported to be subject to the permission of the Securities and Exchange Commission of Pakistan (SEC).

Nafees Cotton Mills would purchase the shares in Legler-Nafees at face value of Rs10 per share, 'against share subscription money already with the investee company'.