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Aug 06 - 12, 2001

ABAMCO announces the 2000-2001 Annual Results.

ABAMCO Limited, the asset management company managing Unit Trust of Pakistan (UTP), an open-ended mutual fund in the private sector, announced results for UTP for the financial year ended June 30, 2001 on Saturday, July 21, 2001, within three weeks of the end of the financial year. The audit of the accounts has been finalized and approved by the Board of Directors of the management company. The annual report is under print and will be released by mid August 2001.

Pending dispatch of the Annual Report, the management company has released the details of the workings of UTP for the year.

UTP posted net profit of Rs. 87 million for the year to end June 2001, as compared with earnings of Rs. 109 million during last year. The decline in earnings was due to decline in income from capital gains on sale of marketable securities as the KSE Index declined by 10.17% during the year and remained under bearish spell throughout the year. Other sources of income have posted appreciable increase.

The fund earned Rs. 20.8 million from gain on sale of marketable securities as against Rs. 59 million last year. Other major contribution to the income came from dividends, which provided Rs. 37 million, up from Rs. 26 million in 2000. Mark-up on term finance certificates contributed Rs. 9.7 million, up from Rs. 7.6 million in 2000. Profit on money market transactions was Rs.16.5 million as against Rs. 3 million in 2000 and mark up on bank deposits and certificate of investments increased to Rs. 13 million up from 10.5 million the previous year.

The Board has approved cash dividend at 12% i. e., Rs. 600 per Unit. The dividend would absorb Rs. 86.4 million, which is equal to 99% of the year's net profit. Rs. 11.5 million is being carried forward. The dividend warrants or Unit certificates where Unit holders have opted for reinvestment will be dispatched to Unit holders before August 20, 2001.

During the year under review 64,457 Units were sold and 11,290 Units were redeemed. Unit holders exercised the option by investing the dividend amount into 2,394 Units under cumulative investment plan. The net sale was recorded at 55,561 Units with a value of Rs. 300.7 million as against 17,553 Units with a value of Rs. 119.5 million during the year ended June 30, 2000.

A total of 144,057 Units with a value of Rs. 749.3 million were outstanding at the year-end June 30, 2001 as against 88,496 Units with a value of Rs. 469.0 million at the year end June 30, 2000.

The Unit holding pattern indicates a healthy mix of investors. 26% Units in the fund were held by provident/ pension funds and 24% by banks. Insurance companies had 14 % stake in the fund and NBFIs had a stake of 31%. Welfare organizations had a stake of 2%, while individuals had a collective stake of 3%. In number individual Unit holders constitute 60%.

The Net Asset Value (NAV) of the Units after appropriation of dividend was Rs. 5,201 on June 30, 2001 as against Rs. 5,300 on June 30, 2000.

UTP's investment at year-end reflected a balanced pattern between equity and fixed income securities. Rs. 265 million i.e. 35.4% of net assets was invested in equity securities and Rs. 28.6 million i.e., 3.8% in debt instruments. In the equity securities 34.3% was invested in Fuel and Power, 22.6% was invested in the financial sector i.e. Banks, Insurance Companies and Mutual Funds, 21.4% in Telecommunication, 8.8% in Paper and Board, 7.2% in Chemicals and Pharmaceuticals and remaining amount in Food and Allied, Textile and Automobile sectors. UTP's investment in equity securities is based on one of the three criteria, viz. consistently dividend paying, growth prospects and actively traded. Remaining 60.8% of net assets was invested in short-term money market instruments and carry over trades. The liquidity will provide good opportunity to UTP to invest at a time when the market is offering attractive valuation.

During the year under review, an amendment was made in the trust deed of UTP with the prior approval of the Securities and Exchange Commission of Pakistan to enable the management company to recover the sales load from incoming investors at 2% of net asset value instead of par value. This amendment is in line with international practice.

Intel reports second quarter revenue of $6.3 billion

Intel Corporation announced second quarter revenue of $6.3 billion, down 24 per cent from the second quarter of 2000 and down 5 per cent sequentially. Asia Pacific contributed 31% of overall Intel revenues, up from 26% from the second quarter of 2000 and 28% sequentially.

For the second quarter, net income excluding acquisition-related costs* was $854 million, down 76 per cent from the second quarter of 2000 and down 22 per cent sequentially. Second quarter earnings excluding acquisition-related costs were $0.12 per share, a decrease of 76 per cent from $0.50 in the second quarter of 2000 and down 25 per cent sequentially. During the second quarter, the estimated tax rate for the year, excluding the impact of acquisition-related costs, was revised to 25.7 per cent, lower than the previous expectation of 29.8 per cent, resulting in an increase to earnings of approximately $0.01 per share. Last year's second quarter results included a gain on investments of $2.1 billion, primarily from the sale of assets in the Intel Capital portfolio, which compares to a $3 million gain in the second quarter cf 2001.

Including acquisition-related costs in accordance with generally accepted accounting principles, second quarter net income was $196 million, down 94 per cent from the second quarter of 2000 and down 60 per cent sequentially. Earnings per share were $0.03, down 93 per cent from $0.45 in the second quarter of 2000 and down 57 per cent sequentially, including an increase of $0.0 per share due to the lower estimated tax rate for the year of 25.7 per cent.

Acquisition-related costs in the second quarter consisted ol $123 million in one-time charges for purchased in-process research and development and $594 million of amortization of goodwill and other acquisition-related intangibles and costs.

United Bank Limited

United Bank's Human Resources Development, Training Division conducted a 6 days course on Forex Operations at Karachi recently. The Course was inaugurated by M. Ayub Hamid, Country Trade Finance Head and was attended by the officers from Forex dealing branches and Trade Processing Centre.

Addressing the participants, Ayub Hamid said that UBL aims to provide quick and efficient service to its customers in general and particularly to those who are dealing in foreign trade. This will ultimately help the country to earn the much needed foreign exchange. He further added that UBL over the past few years has undergone radical changes in turning the bank business to market needs, backed by enriched operational skills and improved service standards. Corporate and Commercial Banking along with Country Operations have a common goal and commitment to develop a team of officers equipped with the best and latest information on banking laws and practices as well as application of management techniques.

Union Bank Assigned A2 Rating by PACRA

Union Bank Limited has been assigned a long-term rating of A - and a short term rating of A2 by Pakistan Credit Rating Agency (PACRA) which is an affiliate of Fitch, which is one of the three largest rating agencies in the world. A - denotes a low expectation of credit risk while A2 denotes that obligations are supported by a satisfactory capacity for timely repayments.

In August 99, 49% stake in Union Bank was acquired by a Middle Eastern Group, and a new management team comprising of accomplished bankers having outstanding experience with major foreign banks was installed under the leadership of Mr. Shaukat Tarin, a renowned international banker and Ex-President and Chairman of Habib Bank Limited. The new management is focusing to transform the bank's profile by expanding to a full range of banking services with major emphasis on corporate and retail banking while maintaining the original niche in the area of SME business.

In July 2000, Union Bank acquired Bank of America (BOA) Pakistan branches. The new management foresaw two important benefits in this strategic decision: acquiring of a strong corporate base and a platform from where to emerge as the leading bank in consumer banking services. The acquisition of BOA showed commitment of the bank's sponsors at a time when most of the foreign banks are looking to scale down their commitments and in certain cases even to exit from the market altogether.

In 2001, Union Bank and American Express signed an Independent Operator agreement whereby Union Bank now conducts the American Express Cards operations in Pakistan. Under the terms of agreement, American Express has transferred its existing card members and merchant relationships to Union Bank. As a result, Union Bank now issues and markets American Express Cards in Pakistan. The plan is to launch a Rupee card very soon.

The bank is in an investment mode and the management expects turnaround results within the next 2-3 years. In this process the emphasis would be to convert the bank in to a top class financial institution. The investment phase includes, interalia, expansion of branch network, IT excellence and further acquisitions.

Bank Alfalah: Rupee travelers cheques

The Bank Alfalah has become the first bank by introducing the Travelers Cheques of the denomination of 2 and 5 lakh, the highest ever in Pakistan. It is also the only bank that offers 8 different denominations.

Saleem Akhtar, the Chief Executive and Zoha Imam, Head of Rupee Travelers Cheques at the launching ceremony stated this last week in Karachi.

The bank which currently operating with 23 branches all over the country plans to expand its operations by adding another 10 branches during the year.

The expansion of business in Pakistan is in fact in line with the commitment of the Chairman of the Bank Sheikh Nahayn Mabarak Al-Nahahyan to economic development of Pakistan through new product and services.

Speaking on the occasion Zoha Imam explained the distinctive security features of the new products. She said that cheques are printed in the United Kingdom and have the highest security features with Alfalah’s own watermark, security thread and anti scanning facility. She also explained further benefits accruing to the purchaser in the shape of an attractive and exquisite reward program.