The dollar touched 21-month high of Rs 54.40 in the
inter-bank market on Friday when it broke through the physiological level of Rs
On November 12, 1998, the dollar had touched all-time high of
Rs 57.60 and later fell to Rs 50.50 on December 22, 1998, losing Rs 7.10 on the
central bank intervention before stabilising.
The rupee has continued to slide after the SBP has taken an
apparent decision to conserve its foreign exchange reserves and not intervene in
the inter-bank market. The rupee slide in the inter-bank also resulted in the
depreciation in kerb trading and the Pak currency fell from Rs 56.40 to Rs 56.65
to a dollar.
After closing at Rs 53.43 last week the rupee failed to hold
below the SBP intervention level of Rs 53.50 to a dollar in its absence. The
exporters took advantage by staying away from the market, assuming that this
time the SBP is showing its willingness at the current level by not entering
into the market and wants further weakening of rupee. The current move puts a
question mark on the desired level of the SBP as it broke through a number of
technical barriers without meeting any resistance.
The market received wrong signal immediately after the
intervention when one of the largest nationalised bank started picking dollar at
Rs 53.15 - Rs 53.20 levels putting floor on the downside. There is always a talk
going on in the Foreign Exchange community that this bank is always seen
purchasing dollars on behalf of the SBP. Had the dollar been allowed to dip
freely, the forex market would have stabilised by now.
The flow of funds started drying up when the greenback closed
above Rs 53.50 level in the interbank market during the first day of the week.
State Bank earns Rs30 billion net profit in 1999-2000
The State Bank earned a net profit of more than Rs30 billion
in fiscal 1999-2000: In 1998-99 its net profit totaled Rs28 billion.
An official of ministry of finance told that SBP earned a
gross profit of Rs35 billion in the last fiscal year. But a net loss of Rs4
billion booked in foreign exchange regime reduced it to something between
The net profit of the central bank has marginally exceeded
the revised target of Rs30 billion declared in the budget 2000-01: The initial
target set in the 1999-2000 budget was Rs35 billion.
The official said the target for the current fiscal year is
The State Bank profit forms part of non-tax revenue and is
the second largest source after interest on income from state-owned property and
Two private banks declare profits
Two private sector commercial banks: Metropolitan Bank and
the Bolan Bank announced on Wednesday, improved profit for the half year to
end-June 2000. Interim dividends — in cash or bonus shares- were not announced
the Boards of either bank.
Metropolitan Bank posted 8.6 per cent growth in pretax profit
to Rs 235.2 million for the Jan-June 2000, from Rs 216.5 million in the
corresponding period of the previous year. After tax profit was up 19.3 per cent
to Rs 85.2 million, from Rs 71.5 million, producing earning per share at Rs 1.36
on 62.5 million outstanding shares.
Bolan Bank, reported pretax profit at Rs 10.8 million for the
first six months of the current year, up 52 per cent from Rs 7.1 million in the
same period of 1999. After tax profit increased 47 per cent to Rs 5.3 million,
from Rs 3.6 million. Earning per share worked out at Re 0.10 on 50.8 million
50% growth in pre-tax profit
Shell Pakistan, the private sector oil marketing company
reported 50% growth in pretax profit to Rs2,013m for the year ended June 30,
2000, from a year ago pre tax earnings at Rs1,341m. After tax profit rose 47.4%
to Rs1,299m, from Rs 881m.
Companies borrow less from banks
Major companies in the textile industry are ploughing back
their profits in investments with much reduced dependence on bank borrowings,
indicating that crony capitalism has begun to adjust to the new emerging market
In the past when liberal credit was forthcoming under
official patronage, investment in textile industry was funded by debts ranging
from 60 to 90 per cent of the total project cost and the ratio of equity on bank
documents was shown at 10-40 per cent. With kick-backs fluctuating between 20-40
per cent on purchase of foreign machinery and plants, sponsors often got away
with zero investment of their own.
Average 'Badla' rates decline
The average 'badla' rates in the carry forward business of
the Top-10 stocks at the Karachi stock market, which had held out at 13.3% in
the preceding two weeks, stood a step down to the earlier levels of 12.6% in the
trading week that closed on Friday, Aug 11.
According to the data released by the Karachi Automated
Trading System (KATS), volume in the badla business edged higher by 1.1% to
194.8m shares during the week; the value amounting to Rs4,610.8m. A week ago
192.7m shares were transacted in the badla market, worth Rs4,722.5m.
ADBP discusses recovery operations
The 3-day Regional Managers Conference of ADBP concluded on
Saturday discussed threadbare the recovery and disbursement operations of the
bank with a view to remove the procedural snags to make them more and more
The Conference also considered a number of proposals to
retrieve the stuck-up and non-performing loans on top priority. It evaluated the
performance of the Regional Managers, Branch Managers and Mobile Credit Officers
during the year 1999-2000 and the best performers were awarded shields in
recognition of their efforts.