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July 16 - 22, 2001

Chances of rescheduling brighten

Minister for Finance Shaukat Aziz has said that the release of $131 million tranche by the IMF has brightened Pakistan's chances to once again seek over three billion dollars debt rescheduling from the Paris Club for another three years.

He told that the disbursement of the new IMF tranche will also lead to seeking three years medium terms Poverty Reduction Growth Facility.

Generally, it is said that IMF could offer $2 to $2.5 billion on account of the PRGF.

"This is happening for the first time that Pakistan is about to complete any IMF funding programme and this is because of our prudent economic policies", claimed Mr Aziz. Earlier, he said, various IMF funded programmes were cancelled in the past after one or two tranches and that was why Pakistan was called a "single tranche country".

He said the release of $131m tranche, now disbursed in the account of State Bank, was also recognition that Pakistan was pursuing right kind of economic and financial policies.

Accord signed with WB

Pakistan and the World Bank on Friday signed a Japanese Grant Funds Agreement amounting to $515,769.

Secretary Economic Affairs Division Nawaid Ahsan and the World Bank Country Director for Pakistan and Afghanistan John W.Wall signed the agreement.

Investment banking sector earnings up

The investment banking sector posted healthy growth in earnings in the first half of the year to June 2001, compared to the corresponding period of the previous year, an analysis by KASB & Co showed.

A sample of five representative investment banks: Al-Faysal; Al-Meezan; First International; Jehangir Siddiqui and Orix, posted cumulative growth of 75 per cent in net profit after tax (NPAT) to Rs544m from Rs311m.

Al-Faysal Investment Bank is singled out as the giant in the sector since its asset-base constituted 74 per cent of the total assets of the above five representative banks at December 31, 2000. Excluding the Al-Faysal numbers, NPAT growth was more dramatic at 128 per cent from Rs131m to Rs298m.

Net profit at Al-Meezan jumped 146 per cent to Rs212m for the first half of 2001, from Rs86m in the similar period of the previous year. Interbank net profit also rose by a similar percentage points to Rs52m, from Rs21m. On a closer look it was revealed that the major source of higher profit of Al-Meezan was the exchange gains on its US dollars 35m swap contracts with the central bank.

Jehangir Siddiqui doubled its half year profit to Rs20m, from Rs10m same time in 2000, mostly attributable to a massive increase in income from investment (up from Rs 4m to Rs31m). The net profit at Al-Faysal improved 36 per cent to Rs245m from Rs179m. The bank's total income had shown a slower growth of 7.2 per cent to Rs1.7 billion, but it managed to contain rise in total expenditure (excluding provisions) to 4.2 per cent.

The bank benefited from lower taxation at Rs19m, from Rs59m in the same period last year. Net profit at Orix Investment Bank ended about flat at Rs13m, though its total income rose by 5.9 per cent. Pre-provision income and pre-tax income remained the same at Rs23m. Only the income from fund placement showed a healthy growth of 25 per cent to Rs29m.

Private sector gets Rs60.36bn credit

Banks offered Rs60.36 billion credit to the private sector and Rs11.32 billion to the public sector enterprises during the last fiscal year, which however fell short by about 30 per cent of the originally indicated allocation in 00-01 credit plan.

Credit disbursement to private sector in 00-01 showed a rise of almost four times from Rs14.62 billion given in 99-00. Public sector enterprises also got about 45 per cent more than Rs8.2 billion given a year ago. These public sector enterprises do not include the notorious 'seven problem ridden sisters of Pakistan': the Wapda, KESC, OGDC, PTC, SSGC SNGPL and the Pakistan Railways.

Industrialists received the generous treatment from the banks but exporters were somewhat left out. Net disbursement of funds to the exporters remained negative for the second consecutive year in 00-01 when they retired Rs1.09 billion. A year ago in 99-00 the exporters had shown a net retirement of Rs10.25 billion.


The Asian Development Bank (ADB) is expected to co-finance over $45 billion worth of Pakistan's Water Resources and Hydropower Development Programme "Vision-2025".

Sources in the Economic Affairs Division (EAD) told that "Vision-2025" was currently under consideration of the bank to "include it in future ADB Renewable Energy Investment in Pakistan."

$150m loan expected from ADB

The Asian Development Bank is expected to offer $150 million to help improve Pakistan's legal system that aims at benefiting the common man.

A four-member ADB fact finding mission for the proposed $150 million Access to Justice Programme Loan (previously called legal and judicial reforms) has completed its deliberations on July 10 by meeting the high officials including Secretary General Ministry of Finance Moeen Afzal.

Rupee sheds 25 paisa in kerb

After maintaining a firm outlook against the US currency during the last couple of sessions, the rupee on Wednesday shed 25 paisa in kerb dealings against the dollar.

The rupee eased to Rs.67.32 and 67.37 for buying and selling respectively as compared to Rs.67.05 and 67.12 a day earlier, the notable feature was that the spread between the buying and selling rates has been narrowed down to normal five paisa from the previous seven paisa, they said.

On the inter-bank, it was quoted at Rs.64.00 and 64.50 for buying and selling respectively, increasing the gap between the official and kerb rates to over Rs.3.00.