Sep 24 - 30, 2001
Stock market support Banks to pour in Rs2bn
Five major banks are likely to inject Rs 2 billion
out of the Rs 5 billion committed by more than a dozen banks and
non-bank financial institutions to shore up the falling stocks market.
Bankers said top executives of these banks met the
management of the Karachi Stock management at the National Bank head
office on Thursday to finalize the nitty-gritty of the plan.
The banks are: (i) National Bank (ii) Habib Bank
(iii) United Bank (iv) Muslim Commercial Bank and (v) Allied Bank. The
chairman of Karachi Stock Exchange Yasin Lakhani said the KSE has
framed rules to allow associate membership of bourses to the banks and
Securities & Exchange Commission of Pakistan has approved the
same. "Since the banks have now got this privilege there is no
impediment left in the way of materializing their commitment to
support the stock market," he said. But Lakhani would not comment
on how much support would be coming in from the big five banks.
Five major banks and more than a dozen financial
institutions had committed at a meeting held at the State Bank on
Tuesday to provide Rs 5 billion support to the stock market by
undertaking carry over transactions. Bankers said the meeting held at
the NBP head office on Thursday discussed the modalities of the
financing by the five major banks. They said these banks will hold
another meeting on Friday with the chairman of SECP Khalid Mirza to
give a final shape to their plan for supporting the stock market.
Bankers said the State Bank would monitor the COT
financing by the banks into the stock market. All the three bourses in
Pakistan were shut down on September 17 after suffering heavy losses
due to growing threat of the US retaliatory attack on Afghanistan in
the wake of the September 11 terrorist bombings on New York and
Washington. The bourses are due to reopen from Monday.
The volumes of support committed separately by
other financial institutions could not be ascertained immediately. Two
notable financial institutions namely Pak Kuwait Investment Company
and Pak Libya Holding Company have already been providing COT
financing to the stock market.
Debt relief strategy being updated
Pakistan is updating its strategy focused on debt
relief and long-term debt rescheduling at most concessional terms
possible, given the past bilateral practices and options available in
the guidelines set by IMF, World Bank and the Paris Club.
Sources said the strategy update has become
inevitable to acquire fiscal space for carrying out responsibilities
entrusted to Islamabad by the international community and to reduce
the debt burden to a sustainable level. The new responsibilities and
challenges emerge from the US strategy which has currently placed
Pakistan at the centre of its campaign to fight international
Tanvir Agha, economics minister at Pakistan
embassy, told a foreign news agency on Tuesday: "What we are
looking after is that imparts sustainability to the debt burden and
ensures that Pakistan does not have to go in for repeated
Habib Bank ready for privatization
Habib Bank is "very much ready for
privatization" as it has been restructured to a position of
The Privatization Commission and the HBL management
have agreed to expedite the process for sale of 26 per cent stake of
the bank to a strategic investor, says bank president Zakir Mahmood.
Initially, some shares may also be unloaded in the stock exchanges at
an appropriate time.
Habib Bank has 19 per cent shares in the domestic
market and 1,450 branches.
It has 55 foreign branches in 26 countries, 40 per
cent stakes in Habib Nigeria Bank, one of the largest in Nigeria and
95.5 per cent stakes in a subsidiary created by HBL and ABL branches
in the United Kingdom.
CE briefs think tanks
President Gen Pervez Musharraf said on Tuesday that
the decision to extend "unstinting support" to the United
States had been taken under tremendous pressure.
Gen Musharraf said this during a briefing given to
former foreign ministers, retired generals and think tanks.
Gen (retd) Mirza Aslam Baig quoted the president as
having revealed that the US authorities had asked the latter to reply
in definite terms whether Pakistan was a friend or foe of the United
States. The president apprised the select gathering that the US
authorities had conveyed in categorical terms that Islamabad's
decision would determine its future relationship with Washington.
Japan may lift curbs
Japan said on Tuesday it may lift sanctions on
Pakistan and India in support of the two countries' efforts to
cooperate with the United States to track down Osama bin Laden.
Tokyo imposed the sanctions after the two countries
carried out nuclear tests in 1998.
"If Pakistan's cooperation is real, we think
we should give them a helping hand," a foreign ministry official
said. He added that Japan was also looking at the response from India.
Insurance cos hint at raising premium rates
A few insurance companies have hinted at charging
'war risk' cover by enhancing their premium rates on daily basis from
Wednesday, insurance circles said.
These companies have sent advice to their branches
suggesting them not to quote existing rates, which are not sufficient
to cover 'war and strike, riots, and civil commotion' after last
Tuesday's terrorist attacks on New York and Washington.
IT Ordinance 2001
The government has allowed initial allowance at a
rate of 40 per cent on eligible depreciable assets for the first time
in a tax year (financial year). This facility has been given to those
people, under the Income Tax Ordinance 2001, who place an eligible
depreciable asset into service in Pakistan for the first time in a tax