Dec 04 - 10, 2000

Pakistan Investment Bonds launched

The State Bank will conduct the first auction of long-term Pakistan Investment Bonds on December 12. SBP said on Wednesday the bonds carry a coupon rate of 12.5 per cent for three years, 13 per cent for five years and 14 per cent for ten years.

SBP would announce the coupon rates for PIBs on each auction. In other words these bonds do not carry a fixed rate of return. Buyers of these bonds will rather be free to bid for them at any price — higher or lower than the coupon rate — or simply at par. Bankers say the auction for new debt bonds may be held regularly every two months but in December there may be another auction.

PIBs will be issued in multiples of Rs100,000. The profit earned on them will be liable to income tax. The government will charge only 10 per cent withholding tax on the profit earned on PIBs. And there will be no compulsory deduction of Zakat at source.

Both individuals as well as corporates — whether in Pakistan or based abroad can purchase these bonds from seven selected banks that will act as State Bank primary dealers.

These banks are: (i) Habib Bank (ii) National Bank (iii) Union Bank (iv) Citibank (v) ABN Amro Bank (vi) American Express Bank and (vii) Standard Chartered Bank. Profits on these bonds will be paid on six-monthly basis. SBP said on Wednesday it would receive tenders for these bonds by its primary dealers on December 12 and open them on the same day.

The State Bank has set a target of Rs 4 billion for the first auction of the bonds. The bonds have been launched to bring back into financial system the institutional funds whose investment in national saving schemes was banned in March and to set benchmark rates for long-term bonds.

Deduction from F-16 money shocks CE

Chief Executive Gen Pervez Musharraf summoned the finance minister and top officials of the finance ministry, foreign affairs, agriculture and economic affairs ministries for an emergency meeting on Friday to discuss the F-16 vs wheat fiasco, as disclosed on Thursday.

The fact that Washington had deducted $60 million from the F-16 account was not disclosed to the chief executive in September and Gen Musharraf was reported to be furious on Thursday when he learnt about such a major development through the press.

Top finance ministry sources told on Thursday that Finance Minister Shaukat Aziz and Foreign Minister Abdul Sattar had been directed to bring all the relevant record of the F-16 settlement with the US government and brief the CE comprehensively.

Finance Secretary-General Moin Afzal, Agriculture Secretary Dr Zafar Altaf and the secretary of the economic affairs division, Nawaid Ahsan, have also been asked to attend the meeting.

Ordinance on POL, gas prices likely

The government will continue determining the petroleum and gas prices without hearing the views of consumers even after the establishment of the Petroleum Regulatory Authority (PRA).

The PRA, the draft ordinance for which is being finalized for likely promulgation next month, will empower the regulators to make changes in the petrol and gas tariff without even consulting the consumers.

Petroleum Ministry spokesman Jehangir Bashar told that the government would continue determining the prices till the time POL products were deregulated. He said the government was in the process of deregulation as Liquid Petroleum Gas, Furnace Oil, and Compressed Natural Gas had already been deregulated, and diesel would be deregulated soon.

The government, he said, was aiming to deregulate the entire petroleum sector, but till the time the process was completed the government would continue exercising its privilege to determine the prices.

Romanian delegation

Romanian Ambassador to Pakistan Emil Ghitulescu Thursday said, an important Romanian economic delegation will visit Pakistan at the beginning of the next year, to give fresh impetus to bilateral relations in various fields of mutual interest.

"There is great untapped potential for increasing the volume of bilateral trade between Romania and Pakistan and much room for strengthening the economic cooperation," he said while delivering a talk on "Universal values of Romanian culture and civilization: Pakistan-Romania relations," here.

The talk was organized by the Institute of Strategic Studies.

US team meets Dawood

A five-member US business delegation headed by Douglar Coe, special envoy of Congressman Joseph Pitts called on federal minister for commerce, industries and production Abdul Razak Dawood on Wednesday, an official press release said.

Welcoming the delegation, the minister said Pakistan had a liberal and clear policy on foreign investment. Being a centre of export all around the region, it offers lot of potential and skills for investment in agro-based industry, garments, information technology, auto part, energy and leather sectors.

Two more inducted in Cabinet

The strength of the federal cabinet rose to 17 with the induction of Shahida Jameel and Altaf M. Saleem, who took oath of their offices on Tuesday.

Ms Jameel, who was the minister for law in the Sindh cabinet, has been appointed federal minister for law and human rights division.

Mr Saleem, chairman of the privatization commission, has been given the status of federal minister.

World Bank assures 'special funding' to CBR

World Bank has assured to offer "special funding" for undertaking tax reforms in the Central Board of Revenues (CBR). Official sources said on Monday that the Vice President of World Bank Ms Mieko Nishimizu met Chief Executive Gen Pervez Musharraf on Saturday and assured to extend special funds for undertaking reforms in the CBR.

Although no specific additional funds were announced by the World Bank vice president, she said that tax reforms was an important area which needed special attention of the donor agencies and that it will oblige the government.