. .

Oct 09 - 15, 2000

Net premium of 4 insurance cos rise

Notwithstanding the gruelling competition among themselves and with the public sector giant, the four life insurance companies in private sector are charging forward. Growth in premium is almost universal, though, all of it does not always travel down to the bottomline.

For the latest six months to end-June 2000, American Life Insurance Company (Alico), which had begun business from May 25, 1995, reported 15 per cent increase in premium income to Rs50.8 million, from Rs44.2 million in the corresponding period of the previous year. More than 73 per cent of the premium was said to have come from individual life business.

For the same half year, net premium at Commercial Union Life Assurance rose 76 per cent to Rs43.3 million, from Rs24.6 million; group premium providing the bulk of income amounting to Rs43.3 million, nearly twice the Rs24.6 million contributed in the same time last year. CU had started individual life insurance operation, from January 1, 1997 (through two branches, one each in Karachi and Lahore) and the group life insurance business from June 30, 1996.

Of the two locally sponsored private life insurance companies, latest half year figures of Metropolitan Life Assurance are not readily available, but EFULife Assurance reported 50 per increase in net premium to Rs186.0 million, from Rs123.8 million in the similar period of 1999.

Alico derived Rs20.5 million from 'investment income' that stood as second largest source of its Rs71.6 million total income. The company posted 39 per cent improvement in mid-term profit to Rs16.6 million, from Rs11.9 million in same time of 1999. EFU Life showed loss for the period at Rs4.1 million, compared to Rs5.5 million in 1999 and CU added a deficit of Rs39.0 million including which the company now carries Rs200.9 million as accumulated losses on its balance sheet.

Rupee gains against dollar

The federal cabinet's directive to the State Bank to check the free fall of the rupee helped it on Thursday to gain some ground against the greenback on the kerb.

The greenback was traded at 61.90/62.40 on the kerb as against 63.70/64.20 on Wednesday under a heavy selling pressure.

The rupee on Wednesday plunged to 59.75/59.80 against the US dollar in the inter-bank market down 40 paisa from the Tuesday close of 59.35/59.40.

In the open market the rupee touched 63.75/64.00 to a dollar for spot buying and selling in early trading but it closed at 63.40/63.65 down 90 paisa from the Tuesday close of 62.50/62.75.

SBP hikes repo rate, cash reserves

The State Bank on Wednesday increased the cash reserves requirement for the banks from five to seven per cent and enhanced its three-day repo and discount rates from 12 to 13 per cent. The twin measures are aimed at strengthening the rupee by containing its supply and making holding of dollars costlier.

It also hiked the maximum yield on treasury bills of different tenures by 2.00-2.23 per cent to reinforce the signal carried through the increase in repo and discount rate. On Sept 18, the SBP had raised its discount and repo rate by one per cent to 12 per cent and on Sept 20 it had enhanced the yields on treasury bills by 1.17 to 1.52 per cent.

T-bills yield up by 11.5%

The State Bank on Wednesday raised the maximum yield on treasury bills by 2.00 to 2.23 per cent to reinforce its earlier signals that it intends to prop up the fast depreciating rupee through a tighter monetary policy.

SBP raised the yield from 8.50 to 10.50 per cent on three-month T-bills; 8.98 to 11 per cent on six-month T-bills and 9.27 to 11.50 per cent on one-year bills.

The central bank sold Rs11.5 billion worth of T-bills of the three tenures at enhanced rates of return. Earlier on September 20 SBP had hiked T bills rates by 1.17 to 1.52 per cent also to reinforce its September 20 signal that it intents to follow a tight monetary policy. On Sept 18 SBP had raised its repo rate from 12 to 13 per cent.

Bankers said the Wednesday auction of T-bills attracted total bids worth Rs12.80 billion of which SBP accepted bids worth Rs11.5 billion and scrapped the rest. It raised Rs7.4 billion through sale of three-month T-bills; Rs2.25 billion through six-month bills and Rs1.85 billion through one-year bills.

Pakistan Refinery

Pakistan Refinery Ltd (PRL) unveiled financial results for the year ended June 30, 2000 on Thursday, posting after tax profit from refinery operations amounting to Rs 20.0 million. The Board of directors also recommended cash dividend at 25 per cent for the year ended June 30, 2000.

Japan to give aid

The Japanese government will provide an additional $4.5 million in emergency grants to help Pakistan recover from a prolonged drought since the summer of last year, Japan's Foreign Ministry said on Tuesday.

Shell cuts furnace oil price

Shell Pakistan Limited (SPL) has slashed the furnace oil prices to Rs12,218.75 per metric tons from Rs12,465 per metric tons.

The new price is effective from Tuesday, a source in the company said. National Refinery Limited (NRL) and Pakistan Refinery Limited (PRL) on Monday cut the furnace oil prices to Rs10,225 per metric tons as compared to Rs10,680 per metric ton.

FCDs decline

An unusual thing has happened. Fresh foreign currency deposits of banks placed with the State Bank have fallen in September despite some six per cent depreciation in the rupee value.

The State Bank statistics show that fresh FCDs of banks placed with SBP stood at $438.7 million on Sept 30 down from $482.8 million on Aug 31. A net fall of $44.1 million.

Rs6.1m collected

During two months of the new Tax Amnesty Scheme (TAS) 2000, launched on August 3, last, with a marginal increase in the duty structure, an amount of Rs. 6.1 million has so far been collected in NWFP.