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 5. TRADE  6. GULF



Oct 15 - 21, 2001

FDI stands at $66m in July-Aug

A $31 million direct foreign investment coming in from the United States raised the total amount of FDI to $66.2 million in the first two months of this fiscal year.

Official statistics show that $31 million worth of FDI came in during July-August this year against a negative inflow of $12.3 million in a year-ago period. The specific areas of US investment coming in during the first two months of this fiscal year could not be ascertained. But top bankers said what attracted this investment was an improved image of Pakistan in the eyes of the US investors.

Before the May 1998 nuclear explosions Pakistan had been receiving a large amount of FDI from the US that started declining afterwards. In fiscal 1998 -99 Pakistan received about $215 million FDI from the US that fell to $170 million in 1999-00 and then to $93 million in 2000- 01.

Whereas the FDI coming in from the US rose from minus $12.3 billion in July-August 2000 to $31 million in July-August 2001 the inflow of FDI from the UK fell from $8.3 million to $3.8 million. But foreign direct investment from Germany rose from a negligible $600,000 in July-August 2000 to $7.3 million in July- August 2001. Similarly FDI from Japan and the Netherlands also increased from $2.7 million and $300,000 to $6 million and $5.5 million respectively. But the FDI from Saudi Arabia fell from $2.2 million in July-August 2000 to only $800,000 in July-August 2001.

Senior bankers and analysts say foreign direct investment is set to fall in coming months in the wake of the September 11 terror attacks on New York and Washington and the US retaliatory attacks on Afghanistan.

$59 million withdrawn in 1 month

People including foreigners have withdrawn $59 million from foreign currency accounts within a month after the September 11 terrorist attacks on New York and Washington.

This is evident from the fact that foreign exchange reserves held by the banks fell from about $1.637 billion on September 8 to $1.578 billion on October 6.

Senior bankers say the fall in the reserves largely reflects the withdrawals people have made from their foreign currency accounts.

Bank treasurers say many foreigners have repatriated abroad millions of dollars. They say local people have also taken out huge amounts of money from their foreign currency accounts. Immediately after the September 11 many individual foreigners and firms operating in Pakistan transferred abroad millions of dollars from foreign currency accounts.

Three cos agree to buy-back shares

Three companies conveyed to the Karachi Stock Exchange their willingness to buy-back shares held by the minority shareholders at prices negotiated with the Exchange.

The KSE announced on Thursday that Benz Industries Limited; Pakpanther Spinning Mills Limited and Farooq Habib Textile Mills Limited, which had earlier opted to repurchase all of the shares held by the small shareholders and seek stock market de-listing, had agreed to the prices negotiated with the sub-committee of the Exchange.

Benz Industries Limited had accepted the buy-back price of Rs20 per share; Pakpanther said it would repay Rs14.50 per share and Farooq Habib Textile Mills agreed to the repurchase price of Rs16.25 for each share that the small shareholders return to the company.

Gold prices fall to Rs5,932

Gold prices on Thursday fell to Rs5,932 from Wednesday's price of Rs6,000 per 10 grams as global price dropped by $4 per ounce in just one day. Global gold prices dipped to $282 per ounce from $286 on selling pressure in foreign markets. Gold bar (116.640 grams) prices also plummeted to Rs68,800 against Rs71,100 of Wednesday.

Rupee gains

The rupee gained 25 paisa more to a US dollar in inter-bank market on Thursday. It closed at Rs62.10/ Rs62.15 for ready buying/selling against the previous close of 62.35/62.40.

SBP injects Rs6.7bn

The State Bank on Wednesday again pumped in Rs6.75 billion into the cash-strapped inter-bank money market. The SBP said it provided the liquidity by purchasing treasury bills for one week at 9.55 per cent at a special open market operation.

$4bn routed through hundi system annually

An estimated amount of $4 billion are routed through the "hundi" system in the country every year, senior finance ministry officials told. "Though it is anyone's guess how much money changes hand through hundi but according to estimates it is as much as $4 billion annually," an official said.

Investigations revealed that more than one-third of money sent by expatriate workers to families back home come through hundi system. An ancient system of money transfers developed long before the formal banking codes for transactions evolved, hundi is called by different names in different countries.

Sigma Leasing to issue 5m right shares

Sigma Leasing Corporation Limited proposes to issue 5 million right shares in the ratio of one-for-two (50 per cent). The company said on Monday that the Board had decided to issue the shares at a discount of 30 per cent (at Rs7 per share).

Orix Leasing Pakistan

On Tuesday, Orix Leasing Pakistan Limited announced the financial figures for the year ended June 30, 2001, posting 14.8 per cent growth in pre-tax profit to Rs179.3 million, from Rs156.1 million the previous year. The Board has recommended cash dividend at 25 per cent tied to a stock bonus, one-for-five (20 per cent).

Bata Pakistan

Bata Pakistan, the trans-national shoe making company, earned Rs23.7 million in pretax profit for the first six months of the current year ended June 30, on net sales valued at Rs875.2 million.