Dec 10 - 16, 2001
Insurance cos mergers, closures on cards
Pakistan's insurance sector is expected to soon
undergo large-scale restructuring through mergers, acquisitions and
closures in view of emerging market conditions and increased capital
and solvency requirements.
Under the Insurance Ordinance 2000 promulgated last
year and now being implemented by the Securities and Exchange
Commission of Pakistan (SECP) required a strong, financially viable
and professionally run insurance sector in the country, SECP sources
Professionals in the public and private sector
insurance companies believed that weak companies were already under
the threat of being wiped out under the Insurance Ordinance but the
recent developments in the post-September 11 situation had accelerated
The SECP sources said that the task force on
insurance sector, constituted by the SECP, in its recent report also
called for long term solutions through enhanced retention and
reinsurance capacities of the domestic insurance sector.
The report said: "With the increased capital
and solvency requirements laid down for the companies, bigger and
stronger companies will remain in the market. Mergers and acquisitions
will take place and the companies which will not be able to fulfil the
requirements, will cease to operate."
Recently, the Securities and Exchange Commission of
Pakistan (SECP) had directed local non-life insurance companies to
raise their paid up capital to a minimum of Rs50 million by December
31, 2002 and to Rs80 million by 2004. Mandatory credit rating of the
local insurance companies was another step towards that end, SECP
Of the total around 52 insurance companies, about
35 insurance companies were currently maintaining paid up capital of
below Rs50 million. About 10 per cent companies in the local insurance
industry are underwriting over 80 per cent of total business in
Cabinet approves National Housing Policy 2001
The federal cabinet on Wednesday approved the
National Housing Policy 2001, outlining the government's role as of a
facilitator and regulator to stimulate economic activity and
The meeting, presided over by President Gen Pervez
Musharraf, also decided to help harness individual and private
potential for generation of resources.
The policy outlines inputs required for
revitalizing the housing sector including financial and legal
measures, indigenous production and use of building materials and
construction techniques. It also specifies policy guidelines for
low-cost housing, slums and katcha Abadis, rural housing and
institutional and legal framework with clearly defined roles of the
federal, provincial and local governments in the housing sector.
PTCL seeks increase in tariff structure
The Pakistan Telecommunication Company (PTCL) has
filed a petition with the Pakistan Telecommunication Authority (PTA)
for an increase in line rent and local call charges.
A well-placed source in the PTA told from Islamabad
that a public hearing would be held at the telecom regulator's
headquarters on Dec 10 to discuss the company's request for an upward
revision in the tariff structure.
He added that the PTCL had asked for an increase of
six to ten per cent in local call charges and eight to 12 per cent in
At present, the local call charges are Rs2.01 for
five minutes and the line rent is Rs245 per month.
In July 2000, the PTCL had increased the local call
charges by around eight per cent, from Rs1.86 for five minutes to
Rs2.01 for five minutes. It had also raised the line rent from Rs204
to Rs245 — an increase of 20 per cent.
EC's 50m euros for DPs camps
The European Commission has decided to pool in 50
million euros to help Pakistan bear the burden of Afghan refugees and
help set up refugee camps.
Speaking at a news conference on Thursday, European
Union Commissioner for Development and Humanitarian Aid Paul Nielson
said that under a new five-year perspective of cooperation plan,
relations with Pakistan would be beefed up, specially in the education
Banks to set up branches in China
Pakistani banks would soon be allowed to set up
their branches in China to do normal banking business.
When it is formally joining the WTO, China will
cancel regional and client limitations to foreign-funded banks in
handling foreign exchange business, then foreign banks can open
foreign currency business to Chinese-funded enterprises and Chinese
Islamabad, Tehran to increase mly cooperation
Pakistan and Iran have decided to enhance military
cooperation for manufacturing of small arms, ammunitions, artillery
tank ammunition, propellant and various kinds of explosives.
"Both countries have resolved their
differences over Afghanistan and are now ready for increased military
collaboration in various fields," said Chairman Pakistan Ordnance
Factories (POF) Wah, Lt-Gen Abdul Qayyum.
Mills asked to purchase Balochistan cotton
Commerce Minister Abdul Razak Dawood has urged the
textile mills to start buying Balochistan lint cotton which is of very
He said that he himself visited Balochistan cotton
growing areas of Usta Muhammad and Dera Allah Yar in last week of
November along with Minister for Food and Agriculture, Khair Mohammad
Junejo and other cotton crop experts, says a press release issued on
During the visit, it was observed that Balochistan
was producing superior quality cotton of grade I, II and III which
will help textile mills to produce higher quality and value added