Sep 04 - 10, 2000

FDI in power, oil, mining, gas slumps in '99-00

The largest losers due to a slump in foreign direct investment in Pakistan in 1999-2000 were the power, mining, oil and gas sectors, official figures indicate.

Compiled by the ministry of finance on the inflow of FDI during the year, these figures also point out that chemicals, pharmaceuticals and fertilizers sectors were recipients of largest increase in FDI during the last financial year. A total of $472.3 million FDI was recorded in 18 major sectors in 1998-99, while in 1999-2000 it decreased to $469.9 million.

The FDI received in power sector in 98-99 amounted to $131.4 million, in 99-2000 it slumped to $67.4 million, recording a decrease of 88.5%. The mining/quarrying, oil/gas sectors received FDI amounting to $112.8 million in 98-99 and $79.7 million in 99-2000, reflecting a downswing of 73.7%.

The chemicals, pharmaceuticals and fertilizers sectors were recipients of FDI to the tune of $54.1 million in 98-99, while the FDI jointly attracted by these sectors swelled to $119.9 million, registering an increase of 64.6%. Petro chemicals and petroleum refining sector was recipient of $38.8 million FDI in 98-99, while it attracted only $12 million in 99-2000.

Machinery other than electrical received FDI to the tune of $12.7 million in 98-99 but this sector could attract only $3.1 million in 99-2000. FDI in electrical machinery in 98-99 was $1.9 million whereas, it received $1.5 million in 1999-2000.

Transport, storage and communication sectors were the recipient of FD worth $33.3 million in 98-99, while its FDI intake totalled $31 million in 99-2000. Cement sector also lost the FDI source as it had received $2 million in 1998-99 while the injection it got in 99-2000 was $0.1 million only.

Kuwait reschedules Pakistan's loans

Kuwait has extended a $25 million relief to Pakistan under the "Debt Financial Arrangements", official sources said on Wednesday. They said that a delegation visited Kuwait last week and held talks on debt repayment. On August 28 the two sides signed an agreement.

The Kuwait Fund has agreed to restore disbursement for the ongoing projects immediately on the receipt of agreed amount of down payment. It added that it would finance new projects.

After China, Kuwait is the second non-Paris Club country which has provided the country relief in debt repayment. Other such countries with which negotiation are to be undertaken are Libya, Saudi Arabia, UAE and Czech Republic.

Yield on one month repo up 8%

The State Bank on Wednesday mopped up Rs6.8bn from inter-bank money market through four-week and eight-week repos of treasury at its open market operation.

SBP sucked in Rs6.6bn in four week-repo at a high yield of 8% and the remaining Rs200m in eight-week repo at 7.34%. The central bank scrapped Rs100m worth of bids each for two-week and six-week repos. The two-way OMO had received Rs1.2bn worth of offers also but the State Bank chose not to inject extra liquidity into the market and scrapped them all.

$ down 18 paisa

The US dollar lost 18 paisa in the inter-bank market on Wednesday but it gained five paisa in the kerb market.

Bankers said the dollar finished at Rs 54.70 in the inter-bank dealings against the previous close of Rs 54.88. But in the kerb market it stood firm at Rs 57.35 for spot selling up five paisa overnight. Bankers said the day began with the greenback hovering around Rs 54.88 but improved supplies forced it down to Rs 54.62. Then a big demand from one of the three state-run banks pushed it up to Rs 54.70.

Hinopak Motors

Hinopak Motors Ltd, showing operating profit of Rs40.1 million for the Jan-June, 2000. The company, nonetheless, managed to post a net profit figure of Rs9.6m, to replace the net loss of Rs91.4 million in the same period of '99.

SBP to check forex deposits

The recent increase in fresh foreign currency deposits has raised alarm bells in the corridors of the State Bank and SBP officials are making moves to keep dollarization at a distance.

Sources close to SBP say fresh foreign currency deposits have risen by some $150 million in the first two months of this fiscal year.

These deposits are well over one billion dollars of which $460-$470 million are lying with the SBP and the rest are placed abroad.

Debt bonds may be offered in Oct

The long-term debt bonds that the government has been working on for past five months may hit the market in October this year. "If all goes well the bonds may be in the market immediately after the end of this quarter," said a source close to ministry of finance. He said the government is yet to decide whether the bonds should be exempted from withholding tax as proposed by the State Bank. "SBP Governor Dr Ishrat Husain and senior officials of Ministry of Finance have already discussed this issue. It may be settled soon."

Knoll Pharma

The Knoll Pharmaceuticals Ltd unveiled financial figures for the half year to end-June 2000. Operating profit was up by 11.7 per cent to Rs49.5 million, from Rs 44.3 million with one per centage point improvement in operating margin to 13.9 per cent from 12.9 per cent in the earlier comparable period.

HBL offers costly loans

State-run Habib Bank Ltd has launched a new personal loan scheme named Flexiloans for salaried people at a high mark-up of 17.2 to 17.4 per cent per annum.

An HBL official told that there are two types of new loan scheme — the one for local and multinational companies and the other for the employees of federal and provincial governments and armed forces.

He said the borrower of group one can obtain a Flexiloan worth six times his net take-home salary the maximum not exceeding Rs300,000. The loan can be obtained by people in the age group of 25-55 years. Employees of 122 selected local and multinational companies with a gross monthly income of more than Rs10,000 can seek Flexiloans.