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Feb 26 -Mar 04, 2001

Improved earnings, higher dividends

The fourteen companies that declared financial results on Monday, reported improved earnings and most paid higher dividends to their shareholders — the exceptions being three Modarabas of the Prudential group.

The fresh crop of financial figures for the year ended September 2000, from the textile and the sugar sector are due by the end of March. Market greeted the results of four sugar mills on Monday with jubilation, as these could be the harbinger of glad tidings for the industry.

Premier Sugar Mills reported pretax profit of Rs200 million for the year ended September 30, 2000, up from Rs111 million the previous year. Its associated company — the Frontier Sugar Mills improved profit to Rs19 million, from Rs15 million. Pretax profit at Noon Sugar Mills shot up to Rs108 million, from Rs67 million and at Chashma Sugar Mills, it jumped to Rs224 million, from Rs89 million in 1999.

Among textiles, Elcot Spinning Mills showed a huge rise in pretax profit to Rs98 million, from Rs16 million; Babri Cotton pushed forward the profit to Rs58 million, from a year ago pretax profit at Rs13 million and Din Textile's pretax profit multiplied to Rs351 million, from Rs132 million.

Bannu Woollen Mills posted profit amounting to Rs52 million for the year 2000, up from Rs38 million the year before.

Before tax profit at Pacific Leasing for the half year ended December 31, 2000 edged higher to Rs5.4 million, from Rs4.9 million.

Among synthetics, Pakistan Synthetics increased profit to Rs67 million for the first half, from Rs44 million in the same period of 1999 and Rupali Polyester added Rs100 million to its profit, which rose to Rs198 million, from Rs92 million, same time last year. Treet Corporation also unveiled half term results on Monday, posting pretax profit at Rs51 million to end-December 2000, twice the Rs25 million earned in the corresponding period of 1999.

Trust Securities & Brokerage swung back to a profit of Rs0.5 million for the six months to end-December, from a loss of Rs0.7 million same time earlier year.

Expatriates send $667.5m

The foreign exchange sent by overseas Pakistanis rose to $667.5 million in the first seven months of the current fiscal year from $549.3 million in a year-ago period.

The State Bank statistics show an increase of 20 per cent in home remittances from various countries, including the United States, between July-January 2000-01 as compared to the remittances received in July-January 1999-00.

Home remittances from Kuwait jumped to $106.8 million from $68 million chiefly because of compensation paid by Kuwait to Pakistani Gulf War affectees.

But the increase of $38.8 million is a little over one third of the $118.2 million rise in total home remittances of the first seven months of the fiscal 2000-01. That is there has been a rather general upward trend in inflow of foreign exchange through home remittances.

Yield on 3-month TBs up

The State Bank on Wednesday raised the three-month treasury bills yield by 45 basis points. The move confirms that Pakistan has accepted the IMF demand to increase interest rates.

The Fund has been insisting for an increase in interest rates to make sure Pakistan meets some key targets, including the one relating to expansion in its net domestic assets. The IMF has set these targets under a $596 million 10-month standby credit.

The SBP said it sold T bills worth Rs3 billion at 10.95 per cent on Wednesday. Two weeks ago, it had sold three-month bills worth Rs1.4 billion at 10.50 per cent. Thus, the yield on three-month bills went up by 45 basis points on Wednesday.

The SBP said it had received Rs3.9 billion bids for three-month bills of which it accepted bids worth Rs3 billion and rejected the rest.

Move to build up forex reserves

The government is setting up a committee of federal finance managers to devise ways and means for maintaining foreign exchange reserves and foreign currency deposits from further plummeting.

The government has agreed with the International Monetary Fund (IMF) to maintain foreign exchange reserves at $1.74 billion at the end of June 2001, but chances are that the government may not be able to meet this target. Gross liquid foreign exchange reserves are currently a little over $1 billion.

Rupee falls again

The rupee after making a modest recovery on Wednesday fell again on Thursday in the inter-bank market. But it held firm in kerb.

Bankers said the rupee closed at 60.25/60.30 to a US dollar in the inter-bank market from its overnight close of 60.10/60.15 as importers made aggressive buying of greenbacks. Currency dealers said the rupee closed unchanged at 62.95/63.00 to a dollar in the kerb market.

Reserves down

Pakistan's gross liquid foreign exchange reserves fell to $1.063 billion on February 17 from $1.097 billion on February 10.

According to the statistics released by the State Bank on Thursday the country had about $764 million worth of approved forex reserves and $299 million worth of cash and short term securities held abroad on February 17.

The total reserves of $1.097 billion include around $570 million worth of foreign currency deposits of banks placed with SBP. In other words net liquid reserves currently stand around $530 million or equal to two-week's import bill only.

PILCORP to offer TFCs

The Pakistan Industrial Leasing Corporation Ltd (PILCORP) will offer for public subscription the first tranche of Rs325 million of its Term Finance Certificates (TFCs) on March 1-2. The PILCORP TFC has a tenure of three years and comprises Rs325 million, of which Rs175 million has been taken up by the institutional investors and the rest will be offered to the general public. In case of oversubscription, the company has the option of retaining up to 50 per cent of the public issue, i.e., Rs75 million, raising the size of the tranche to Rs400 million.