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FINANCE

Feb 07 - 13, 2000

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

Results

PTCL: Pakistan Telecommunication Company Limited (PTCL) unveiled mid-term financial figures to end-December 1999. For the July-December 1999 half-year, the telecom posted after tax profit amounting to Rs8.630 billion on revenue of Rs29.386 billion. This represented improvement of 2 per cent over a year ago taxed profit at Rs8.487 billion and 17.8 per cent growth in revenue over Rs24.943 billion for the corresponding period of the previous year.

FFLM: The First Fidelity Leasing Modaraba (FFLM) during the year ending June 30, 1999, earned a post-taxation profit of Rs 25.25 million. Last year, the FFLM's post-taxation profit was Rs.15 million.

Bank of America's local operations

Two banks are vying for Bank of America's local operations now up for sale, a financial source said.

"The Union Bank and ABN AMRO Pakistan are in advance negotiations with the Bank of America," a source involved in the discussion told.

World Bank for merger of private banks

World Bank thinks it is time for Pakistani private banks to go for mergers: the visiting WB mission has told this to State Bank officials as well as to heads of local private banks. The State Bank agrees with it and is planning to increase the paid-up capital requirement for private banks to compel them to seek mergers, where necessary.

A source close to SBP said the issue came under discussion at a meeting between the mission and senior SBP officials here last week. "The officials told the mission that SBP may increase the paid-up capital requirement to compel small private banks to go for mergers." At present the minimum paid-up capital required for a private bank is Rs500 million.

A senior banker said members of the mission raised the issue of mergers also at a meeting with Chairman Badr-ud-Din Khan of Gulf Commercial Bank and other members of New Private Scheduled Banks Association here last week.

"The members of the mission were of the view it is time for us to seek mergers where necessary."

A World Bank financial assessment mission led by Joseph Pernia is currently on an official visit to Pakistan to see how banks are performing after three years of banking sector reforms. The reforms began in 1997 with financial assistance from World Bank.

As part of these reforms private banks were asked to raise their paid-up capital from Rs300 million to Rs500 million by the end of December 1997. Now all private commercial banks minus one have paid-up capital of Rs500 million or more. Indus Bank continues to operate with a Rs300 million paidup capital amid warnings from SBP to enhance it.

SBP Governor Dr Ishrat Husain has already asked private banks to seek mergers and be viable enough to compete with large state-run commercial banks.

Rupee loses

The Pak Rupee lost 5 paisas to 54.10 against US dollar in the kerb market Wednesday as various rumours continued to dominate the market, dealers said. The dollar was being bought and sold at Rs 54.05/54.10 at the close of the day as compared to overnight rates of 54.00/ 54.05.

Forex reserves

Pakistan's liquid foreign exchange reserves stood at $1.545 billion on January 31. The amount included $307.7 million worth of foreign currency deposits the banks had placed with the State Bank during past seven months.

Non-Paris Club creditors reluctant

Pakistan has requested Saudi Arabia, the United Arab Emirates and some other non-Paris Club creditors to reschedule debt for a long period, officials said.

The officials said except China, all other non-Paris Club creditors were reluctant to roll over their debt for a long period.

Pakistan owes $350 million to non-Paris Club countries and, by excluding $250 million Chinese debt, the rest of debt of non-PC members remains $100 million.

Saudi Arabia, the UAE and other countries had told Pakistan that since they were not the members of Paris Club, they would not accept the conditions the Club countries were announcing and enforcing, the officials said.

These countries had objected to long-term loan rescheduling, but agreed to roll over their debt for a shorter period, they said, adding that Pakistan was in touch with non-Paris Club creditors and trying to convince them for a long-term rescheduling.

Banks place over $300m with SBP

Foreign currency deposits of banks placed with the State Bank in past seven months stand over $300 million— more than one-third of total deposits of about $850 million.

Senior bankers told that the State Bank retains $300-$305 million that the banks had placed with it between June 1999 and January 2000 and rolled over subsequently. They said the amount was part of the foreign exchange reserves of around $1.5 billion.

Banks started placing fresh foreign currency deposits with the State Bank in June last year after SBP had stopped them from investing them abroad.

SBP accepts these deposits in one-week, one-month and three-month tenures and offer varying rates of return on them.

SBP said on Monday, it would offer 4.45 per cent and 4.5 per cent return on one-week and one-month deposits and 4.8 per cent on three-month deposits in February.

Investment

Pakistan attracted a total of $306 million of foreign direct investment (FDI) in the first half of the current fiscal year, official sources said. The private foreign investment inflow into Pakistan during July-December, 1998 was recorded at $255.2 million which included $248.6 million of FDI and $6.6 million of investment in portfolio.

42 listed cos declare dividend

Process of investigation by the Securities & Exchange Commission of Pakistan (SECP) has motivated 42 listed companies to declare and pay the dividend to their minority shareholders in 1999 in more than five years, it learnt. More than half of the 780 companies listed on Karachi Stock Exchange (KSE) were not declaring any dividend.