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Nov 06 - 12, 2000

FDI drops by 76% in July-Sept

Foreign direct investment in Pakistan has dropped by over 76 per cent in the first quarter of current fiscal year, when it amounted to $35.3 million as against $148.3 million investment in July-September 1999 period.

Bankers report a net outflow of $15.8 million of portfolio funds during the same period and the overall foreign investment both direct and portfolio during July-September 2000 down by over 83.5 per cent to $19.5 million as against $118.6 million in same period of last fiscal.

Another disturbing feature in the first quarter of the current fiscal year is the setting in of the negative trend in the home remittances from the overseas Pakistanis during the month of September. According to bankers home remittances during the month of September has declined to $108.73 million from $168.23 million in August. July this year, home remittances amounted to well over $74 million.

The foreign trade shows an imbalance of over $500 million in the first quarter of this fiscal year with the import bill amounting to $2.7 billion and the exports well over $2.20 billion. There is another liability of about $200 million on shipping freight and on other services.

Pakistan has been spared of debt servicing liability under a relief obtained in May last year from a bailout package which is about to expire in next eight to nine weeks end December.

In the absence of any debt rescheduling from January 1 next, the external debt repayments falling due on Pakistan is $2.94 billion in 2000-2001; $3.30 billion in 2001-2002 and $3.49 billion in 2002-2003.

A month-wise comparison of the direct foreign investment flow reveal that the picture is not that bleak. In the first month of July bankers report a negative $13 million in direct foreign investment. It was mainly because of $35 million of foreign investment withdrawal from Pakistan during July. This withdrawal included $24.7 million to the USA.

Rupee steady

The rupee closed at 56.95 to a dollar in the inter-bank market on Thursday up slightly from the previous close of 57.10.

Bankers said the rupee gained 15 paisa on increased supply of greenbacks through exporters against an almost depressed demand.

They said the dollar hit the intra-day lowest at Rs 56.75 but rose to Rs 56.95 at the end of the day.

Forward premiums fell to Rs 2.40 over the spot price for six months; Rs 1.65 for three months and 55-60 paisa for one month.

Money market remained slightly tight and a discounting of Rs 3-4 billion was reported. Overnight lending rate remained pegged around 13 per cent. Repo rates moved in the band of 11.75/12.0 per cent for one month; 11.25/11.40 per cent for three months and 11.25/11.50 for six months.

Banks to give Rs4bn to NADRA

National Database and Registration Authority on Wednesday signed an agreement with 11 banks and finance development institutions for provision of Rs4 billion to the authority.

NADRA chairman Zahid Ihsan and representatives of the respective banks and DFIs singed an agreement at a ceremony held at NADRA headquarters.

The amount has been arranged by Askari Commercial Bank and Standard Chartered Bank, who are acting as financial advisers and arrangers for the funding of Rs4 billion in a period of five years on behalf of NADRA.

The banks and DFIs which signed the agreement include National Bank, Bank Alfalah, Faysal Bank, Pak Libya Holding Co, Union Bank, Soneri Bank, Employees Old Age Benefit Institution, Bank of Khyber, Askari Commercial Bank, Standard Chartered Bank and Islamic Investment Bank.

The funding will be extended by banks / financial institutions in two phases. Total funding is Rs4 billion and to be extended to the period of five years.

UBL's bad debt

The United Bank Limited (UBL) has given contracts to four private firms for the recovery of non-performing loans (NPLs) of Rs4.5 billion.

The defaulted debt comprised Rs3 billion outstanding against 10,000 borrowers for yellow cabs, Rs700 million due from 40,000 farmers and another Rs800 million not cleared by another 10,000 borrowers of loans below Rs1 million that are linked to different lines of business in urban areas.

FCY deposits swell to $460.4m

Fresh foreign currency deposits of banks rose to $460.4 million on October 31 from $438.7 million a month ago.

Senior bankers link the $21.7 million build up in fresh FCDs to the rupee depreciation particularly in the first few days of the month.

These $460.4 million worth of fresh FCDs placed with the State Bank are part of gross liquid foreign exchange reserves of a little over $1 billion. In other words net forex reserve of the country now stand around $640 million.

A. Oriental to buy-back shares

Ahmed Oriental Textile Mills Limited informed the stock exchange on Monday that the company board had decided to buy- back/repurchase shares at Rs8.50 per share.

The company has cited several grounds as reasons for seeking voluntary de-listing of its securities.


Shell Pakistan (SPL) has increased the furnace oil prices by Rs517.50 per metric ton to Rs13,340 from Rs12,822.50 pmt. The new price was effective from Monday, said an oil dealer. Earlier, the company had increased the prices to Rs12,822.50 pmt from Rs12,535 on October 17, following the price hike made by the local refineries.

Taj Medical to buy back shares

Taj Medical Complex Limited has agreed to buy-back shares, held by the minority shareholders, at Rs13 per share.

In a letter to the Karachi Stock Exchange, the company has asked that its offer of a maximum price of Rs13 per share be accepted "keeping in view the services of Hamdard, specially in the fields of education and healthcare". This follows a meeting between the company and the KSE on October 18, when the bourse agreed to allow the de-listing of the company, provided interests of the minority shareholders were safeguarded.