Feb 05 -
15m govt shares in MCB disinvested
The Privatization Commission has disinvested 15
million government shares in Muslim Commercial Bank (MCB) and earned
The Cabinet Committee on Privatization (CCOP) gave
approval for the sale. Signing of the Share Purchase Agreement and
payment/delivery of jumbo certificates of one million shares each for
the divestment of the government-owned shares of MCB at Rs37.55 per
share took place on Tuesday.
This is the first capital market transaction
included in the short-term privatization plan, completed successfully
and according to the schedule.
Through this transaction, eight million GoP owned
shares in MCB have been sold to MCB Employees Pension Fund, four
million to MCB provident fund (Pak Staff) and one million each to
Global Securities Ltd, Ibrahim Agencies Ltd and Nishat Mills Employees
Provident Fund Trust. These investors submitted their EoIs for these
shares in MCB in minimum sized lot of 1,000,000 shares.
The government of Pakistan through PC offered its
remaining stakes in MCB. The GoP's minimum base price per share for
the sale of its shares in MCB was fixed as Rs37.55 with the
stipulation that the shares will be sold at the said base price or the
market price per share, whichever was higher. The lead managers to the
said divestment was the consortium of AMZ Securities, Al Meezan
Investment Bank Limited and M. Yousaf Adil Saleem and Associates.
Senior officials of ministry of privatization and
the representatives of the respective bidder were present during the
Meanwhile, it was also learnt that the PC was
directed by the higher authorities to accelerate the process of
disinvestment specially by completing some of the already delayed
transactions including Pakistan Telecommunication (PTCL), Habib Bank,
United Bank, Allied Bank and couple of development finance
World Bank seeks speedy privatization
The World Bank Managing Director Shengman Zhang
said on Thursday that Pakistan should contain its population growth
rate and take long-term measures for a sustained growth of its
Speaking at a meeting of top bankers and
industrialists at the State Bank he said a lower population growth
rate might help Pakistan move faster toward economic development.
The participants of the meeting told that Mr Zhang
was of the opinion that Pakistan had recently showed some signs of
improvement but it had to go a long way in exploiting its potential
for a sustainable economic growth.
Mr Zhang said that Pakistan should speed up its
privatization programme to fill in the gaps in its foreign exchange
earnings and expenses. They said the World Bank official observed that
under present circumstances Pakistan could find it difficult to fill
in external financing gaps.
FCY deposits at 50% of reserves
Fresh foreign currency deposits of banks rose by 35
per cent to about $570 million in January 2001 exposing Pakistan —
once again — to the perils of dollarization of economy.
Bankers told that their fresh foreign currency
deposits placed with the State Bank rose to about $570 million on
January 31, 2001 from about $423 million on December 30, 2000 — an
increase of 35 per cent or $147 million.
Now these deposits account for more than 50 per
cent of total liquid foreign exchange reserves of around $1.132
billion as on January 31. If these deposits are subtracted from total
reserves net liquid foreign exchange reserves stand around $563
million only — barely enough to foot two-week import bill.
OMO sucks in Rs12bn
The State Bank on Thursday mopped up Rs12.35
billion from the inter-bank money market by selling treasury bills of
two weeks and six weeks to maturity. SBP said it sold Rs9.35 billion
worth of T-bills in two week repo at 9 per cent and Rs3.0 billion
worth of T-bills in six week repo at 9.5 per cent.
State Bank raises paid-up capital
The State Bank has raised the minimum paid-up
capital for investment banks from Rs 200 million to Rs 500 million.
But it has given the investment banks two years to meet this limit.
An SBP circular said on Wednesday that "no
investment bank shall commence or carry on business unless it has a
minimum paid-up capital of Rs 500 million." But it gave them time
to make up for shortfalls.
The rupee lost 10 paisa to a US dollar in the
inter-bank market on Tuesday as banks transferred abroad foreign
currency funds of their corporate clients.
Bankers said the rupee closed at 59.25/59.30 to a
dollar against the previous close of 59.15/59.20 as the State Bank
allowed outward remittance of dividends and profits of some
In the kerb market the rupee closed 62.15/62.20 to
a dollar down five paisa overnight as people leaving for Saudi Arabia
continued to buy dollars from private money changers.
Banks offer low returns
Depositors got low returns on both saving and fixed
deposits in July-December 2000, as banks took more time to make out
the signals dropped by the State Bank by tightening its monetary
Five major banks — with roughly two thirds of all
bank deposits — offered as low as four per cent return on saving
deposits and 7.5- 8.0 per cent on one-year fixed deposits for
MoU signed for $446m ADB loan
The Asian Development Bank (ADB) and Pakistan have
signed a memorandum of understanding (MoU) for $446.5 million loan for
six development projects to reduce poverty, encourage structural
reforms and decentralisation of powers.
As much as 80 per cent of ADB loan amount will be
spent on the projects related to core poverty and poverty elimination
In addition to funding these six projects, the ADB
has also committed to provide $240 million for three standby