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 5. TRADE  6. GULF



Nov 26 - Dec 02, 2001

FDI up by 115pc in 4 months

The Foreign Direct Investment (FDI) in the country has increased by 115 per cent to $119 million during July-Oct 2001 as compared to $55.5 million of the corresponding period last year.

In October 2001 alone the flow of FDI was $50.5 million which indicates that per month average during October was almost doubled as compared to per month average of previous three months.

"This shows that foreign investors have started reposing confidence in Pakistan and business-friendly policies of the government", says the Board of Investment (BoI) in an announcement on Wednesday.

It said that in case of early settlement of Afghanistan issue, it is projected that the FDI flow during the current financial year will be around $500 to $600 million.

The leading sector which attracted sizable FDI during the period are: oil and gas ($48.5 million), power ($25.6 million), electronics ($8.1 million), petrochemical ($6.9 million), transport ($5.9 million) and information technology ($4.7 million). The major investing countries are: the United States, ($65.8 million), the United Kingdom ($10 million) and the United Arab Emirates ($7.4 million).

The Board is making efforts for marketing the investment potential and opportunities of Pakistan to the foreign investors. Recently, in Sept this year, an overseas investment conference was held in Germany which generated lot of interest by the German entrepreneurs for investment in Pakistan in various sectors.

It expected that during the coming months, the FDI inflow from Germany will also be increased.

During the year 2002, the BoI is planning to hold investment conference in Middle East, USA, European Union, China and Japan.

The Board has chalked out an investment marketing plan and the opportunities will be fully taped which are now arising as a result of lifting the economic sanctions against Pakistan.

Reserves rise to $4.217 billion

Pakistan has received $600 million US grant as part of a $1 billion package that Washington had pledged for Islamabad last week.

A State Bank spokesman told with the inflow of this amount Pakistan's liquid foreign exchange reserves had risen to the highest ever mark of $4.217 billion.

The country had $3.607 billion worth of liquid forex reserves on November 10. Of that $2.041 billion was with the SBP and the rest with all the banks operating in the country. Now with the arrival of $600 million US grant the SBP reserves have risen to $2.652 billion whereas the reserves with the banks stand around $1.565 billion.

The $600 million US grant is the first inflow out of multi- billion dollars funds pledged by Washington in recognition of the support Pakistan is extending to the US-led coalition in their "war against terrorism in Afghanistan."

Home remittances rise to $450m

Home remittances or the foreign exchange sent back home by overseas Pakistanis rose to about $450 million in the first four months of this fiscal year from $311 million in a year-ago period.

The State Bank said on Tuesday that in October alone the banking system received $185 million worth of remittances up from $81 million in October last year.

A press release issued by the SBP said that total remittances including cash flows and encashment of FEBCs/FCBCs; haj remittances; and remittances from Iraq-Kuwait war victims rose to $529 million during July-October 2001 from $453 million in a year-ago period. FEBCs and FCBCs stand for foreign exchange bearer certificates and foreign currency bearer certificates respectively.

Rupee shines further

The rupee on Thursday gained 13 paisa more to a US dollar in the inter-bank market to close at Rs60.80/60.85 for ready buying and selling.

On Wednesday the rupee had gained 19 paisa against the dollar. Thus the local currency has risen by 32 paisa or more than half a per cent against the greenback in the inter-bank market.

In the open market also the rupee recovered 20 paisa overnight and closed at 61.40/61.70 for spot buying and selling against the previous close of 61.60/61.90.

Inter-bank forex deals

The State Bank on Wednesday allowed the banks to buy and sell foreign exchange between themselves even if their buying or selling is not meant for the customers.

In June 1999 the SBP had stopped banks from buying and selling foreign exchange between themselves. The central bank had allowed them to buy or sell foreign exchange in the inter-bank market for their customers only.

SBP sells Rs5bn PIBs

The State Bank on Wednesday sold Rs5 billion three-year and five-year Pakistan Investment Bonds at par value. Bankers said the SBP sold Rs2.2 billion three-year bonds at 10.5 per cent and Rs2.8 billion five-year bonds at 11 per cent.

The auction of the bonds had generated Rs7.6 billion worth of bids but the SBP accepted bids worth Rs5 billion and rejected the same sticking to its pre-auction sale target of Rs5 billion.

NLC earns

A high-level meeting chaired by Finance Minister Shaukat Aziz was informed on Tuesday that the National Logistic Cell (NLC) has earned a profit of Rs93.699 million in 2000-01.

National Bank of Pakistan

The disinvestment of 5 per cent Government holding in National Bank of Pakistan, is now under way. The subscription list is to remain open to public for four days: Nov 19 through 22.

Saudi group to invest in HBL

A Saudi group is planning to invest Saudi Riyal 750 million ($200 million) in the Habib Bank of Pakistan. Prince Sultan Bin Nasser Bin Abdel Aziz, owner and president of Al-Sultan International Group told a Saudi daily that the company executives are currently conducting the necessary studies in preparation for buying a large stake in the bank.