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Aug 27 - Sep 02 , 2001

Kuwait promises $300m aid

Kuwait has promised to extend $300 million to Pakistan for undertaking some mega projects, including the greater Karachi and Quetta water supply schemes.

The Kuwait Development Fund has informed the government that $300 million would be extended shortly, according to official sources on Tuesday.

The funding by Kuwait would also be used for the Right Bank Outfall Drain project. Officials said that before Kuwait, the governments of China, Saudi Arabia, United Arab Emirates and Oman had decided to offer $250 million, $200 million, $268 million and $100 million, respectively.

"We have been offered a little over $1 billion upfront funding by our friends to start mega development projects for reviving the economy, especially by creating over 4 million new jobs," said a finance ministry official.

He said it had happened for the first time in the country that certain substantial foreign funding had been made available before the execution of development projects. He said it would take three to five years to complete about 20 mega-projects.

Besides, President Gen Pervez Musharraf has directed the finance ministry and the planning commission to take out funds from the slow-moving projects and inject them into the fast-moving ones.

Planning and Development Division Secretary Mutawakkal Qazi told that foreign funding was being received in the shape of grants and at a low interest rate.

Sources quoted the president as having directed the authorities to ensure that development projects were executed in a transparent manner. The president said he knew that 30 to 40 per cent funds had been misused in the past and added this practice cannot be allowed to continue.

The president also reportedly said that there had been roughly a 10pc reduction corruption in the development projects and that it was further being removed with the help of the army monitoring teams.

Sharp cut in treasury bills yield

The State Bank on Wednesday lowered the cut- off yield of treasury bills by 87-96 basis points in the third downward revision during this fiscal year. The slashing of the yield helped the central bank sell Rs17 billion worth of bills and drain out Rs16.5 billion from inter-bank market against a target of only Rs5.65 billion.

The cut in T-bills rate reinforces earlier SBP signals that it is poised to follow a rather expansionary monetary policy to kick-start the economy. The first signal came on July 18 when the central bank lowered its discount rate by one per cent to 13 per cent. Then on August 16 it reduced the discount rate by another percentage point to 12 per cent and also cut the coupon rates of long-term Pakistan Investment Bonds by up to one per cent. It is against this background that the central bank went for another one per cent cut in the yields of T-bills.

Saudi Pak to set up bank, insurance firm

Saudi Pak Industrial and Investment Company has decided to set up an insurance company and a bank to expand its operations in Pakistan, says its Chief Executive Muhammad Rashid Zahir.

"Both our insurance and bank projects will materialize within this year, and the company will mobilize financing for the projects from the banking system of the country." "We have a good strength and hopefully we will successfully mobilize funds specially for our new bank."

Atlas Honda

On Wednesday, Atlas Honda Limited unveiled financial figures for the year ended June 30, 2001. These showed that the company had earned pre-tax profit amounting to Rs202.9 million, which stood twice the year ago before tax profit of Rs101.9 million. Profit after tax amounted to Rs117.8 million, which also was up 97 per cent over the previous year's taxed profit at Rs60.2 million.

Gold prices continue soaring

Gold prices continued to show rising trend, touching all time high to Rs5,950 per 10 grams as compared to Rs5,940 per 10 grams on Tuesday. Gold prices have been under pressure since August 15 following continuous price surge in the international markets. A week back, the yellow metal was quoted at Rs5,928 per 10 grams.

Reckitt's sales up

Sales at Reckitt Benckiser showed an overall increase of 19.1 per cent to Rs1,196.9 million for the first half of the current year ended June 30, 2001 from Rs1,005.1 million in the corresponding period last year.

IFAD to give $14m loan

The NWFP Barani Area Development Project, a US$98.6 million project, will receive US$14.4 million loan from the International Fund for Agricultural Development (IFAD). According to a Press release issued on Saturday by the UN Information Centre, a loan agreement was signed on Thursday at the Fund's Headquarters in Rome, by Mr Zafar Hilaly and Mr Lennart Bage, President of the Fund.

Shaukat for stable rupee

Foreign Exchange Advisor of State Bank Zafar Sheikh informed Finance Minister Shaukat Aziz on Saturday that the rupee had remained stable in July-August despite big outflows of foreign exchange. He told the minister that the State Bank made bulky payments in July and August but its effective use of interest rate tool and open market operations kept the rupee almost stable, bankers told.

Micro credit banks

The government has decided to allow setting up of private investment banks at national, provincial and district levels to disburse small loans for alleviating poverty.

"The proposed private banks will work as micro credit institutions for which an ordinance will be promulgated by the president very soon", this was stated by Minister for Finance Shaukat Aziz.

Faysal Bank rated A+, A-1

JCR-VIS Credit Rating Company Limited has upgraded entity ratings of Faysal Bank Limited (FBL) to A+ (A Plus) for the medium to long-term and A-1 (A One) for the short- term. The outlook on these ratings is 'Stable', says a press release issued on Monday.