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
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
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
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
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.
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.
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.