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Sep 24 - 30, 2001

FDI in Pakistan on the decline

Pakistan's share in total global foreign investment inflows of $1.3 trillion stood at around 0.03 per cent in 2000, says the World Investment Report.

The report 'World Investment Report 2001-Promoting Linkages', prepared by United Nations Conference on Trade and Development (UNCTAD), was released on Tuesday by former federal secretary Saeed Ahmad Qureshi.

The report revealed that foreign direct investment (FDI) in Pakistan has been on the decline since 1997, when it stood at $713 million, and in 1998-99 it was $507 million and $531 million respectively. But in 2000, it was only $308 million.

As percentage of gross fixed capital formation, in 1997 the FDI was 7.3 per cent, 5.7 per cent in 1998 and 6.5 per cent in 1999.

FDI stocks in Pakistan during 1985 were $1.1 billion, which increased to $1.9 billion in 1990, jumped to $5.6 billion in 1995, $10.3 billion in 1999 and $10.6 billion in 2000.

Saeed Qureshi said that FDI inflow in Pakistan has been very modest in the recent years and it was yet not sustaining. He viewed that efforts were being made by the government for economic stability through deregulation and liberalization.

He, however, was of the opinion that there were non-economic factors like political instability, law and order situation, judicial and dispute resolution systems and bureaucratic wrangling arising out of federal system of governance, which should not be compensated through economic incentives.

Qureshi was of the view that privatization of Pakistan Telecommunication Company Limited share in mid-1990s and then power sector investment improved Pakistan's FDI inflow level, but the dispute with power companies hampered the investment inflows.

In the current situation, he said, the energy and information technology sectors were expected to improve the situation. Fiscal and balance of payment deficits coupled with increased insecurity needed to be heeded.

Petroleum prices up by 2-7pc

The Oil Companies Advisory Committee (OCAC) on Saturday increased the ex-depot sale prices of all petroleum products by 2.15 to 7.24 per cent due to an upward trend in global oil prices in the last fortnight.

The new prices will be effective from Sept 16-30, says an OCAC press release.

The price of petrol (MS 87-RON) has been nudged up by 82 paisa to Rs32.46 per litre from Rs31.64 per litre. The new price of high speed diesel (HSD) is fixed at Rs18.19 per litre, up by 42 paisa from last fortnight's Rs17.77 per litre.

Kerosene oil prices have surged by 7.24 per cent to Rs18.66 per litre from Rs17.40 per litre, while the new rate for high octane blending component (HOBC) has been fixed at Rs35.60 per litre. It was being sold at Rs34.85 per litre up to now.

The price of light speed diesel (LSD) has been revised upward to Rs16.31 per litre from the just-concluded fortnight's Rs15.71 per litre. An increase of 98 paisa has been recorded in the price of JP-4 which over the next 15 days will be sold at Rs17.24 per litre up to Friday, its rate was Rs16.26 per litre.

Credit rated banks, NBFIs

The State Bank of Pakistan on Thursday issued a list of commercial banks and non-banking financial institutions (NBFIs) and financial institutions listed on stock exchanges with their credit ratings.

According to the SBP, it has been endeavouring to promote self-discipline in the financial markets of Pakistan. The revised format of annual audited accounts for the commercial banks prescribed by the SBP in 1997 was a major step towards this end, suggesting that the new initiative revolves around transparency and sufficient disclosure by the market participants.

PCB reopens

Prudential Commercial Bank restarted working from Thursday under a new proposed name of Pak Saudi Commercial Bank after a six-month moratorium.

The bank management said there was no extraordinary rush of the depositors on any of the 20 branches located across Pakistan.

The bank is the custodian of the deposits of more than 24,000 individuals as well as companies. But it admitted that the depositors withdrew about Rs250-300 million in total and claimed that approximately Rs200 million were deposited in the 20 branches.

Gold price hits all time high

Gold prices surged to a new all time high on Thursday to Rs6,235 per 10 grams due to rising trend in global bullion prices.

Following September 11 attack on the USA business and military centres, gold prices have maintained an upsurge and since then increased by Rs298 for 10 grams.

After reaching to all time high on September 17 to Rs6,220 per 10 grams, gold prices started falling slightly as a result of stability in global prices in the last few days.

Forex reserves fall (Finance

Pakistan's liquid foreign exchange reserves fell to about $3.339 billion on September 15 from $3.376 billion on September 8.

The State Bank said on Thursday the total reserves included $1.713 billion held by it and about $1.626 billion held by all the banks.

On September 8 the SBP reserves totalled about $1.740 billion whereas the reserves held by the banks stood around $1.637 billion.

Micro credit bank

The first private sector micro financing institution is being set up by two Aga Khan institutions with a capital base of Rs500 million and is likely to start functioning from November.

Rupee down

The rupee lost eight paisa to a US dollar in the inter-bank market on Tuesday and closed at 64.23/64.28 for ready buying and selling.