01 - 07, 2002
US FOREIGN INVESTMENT SHOOTS
The US foreign direct investment (FDI) into
Pakistan has shot up to $148.5 million in the first eight months of
this fiscal year from $46.7 million in a year-ago period.
"This clearly shows that investors' perception
has improved," said president of Pakistan American Business
Council Zubyr I. Soomro over telephone. He said the country might get
still larger foreign direct investment in future due to greater
international support that it had been receiving since September 11.
But he warns that Pakistan will have to become more
investment-friendly to translate the contractual investment into
actual inflow of funds.
Soomro says bureaucratic hassles will have to be
eased further and trouble shooting facility will have to be offered to
ensure that those who have contracted long-term investment really
bring it into Pakistan. "The challenge is for us."
Official breakdown of the $148.5 million US
investment is not available but top bankers and industrialists say oil
and gas sector has attracted much of this investment.
The latest State Bank statistics show that Pakistan
attracted total foreign direct investment of $254.5 million during
July- February 2001-02, up from $199.1 million received in
Whereas the foreign direct investment from the US
rose sharply, FDI from the UK fell to $20.5 million in the first eight
months of this fiscal year from about $73 million in a year-ago
Foreign direct investment from Saudi Arabia also
declined to $2.1 million from $34.7 million. But FDI from the United
Arab Emirates and Switzerland rose from $3.2 million and $2.3 million,
respectively, in July-February 2001 to $14.9 million and $6 million in
July-February 2002. Foreign direct investment from Germany and France
rose from $4.3 million and $700,000, respectively, to $5.8 million and
$1.2 million. FDI from Canada shot up to $2.9 million in July-February
2001- 02 from only $100,000 in July-February 2000-01. But FDI from
Hong Kong and Japan slipped to $1.8 million and $3.5 million from $2.2
million and $7 million, respectively.
SBP RETURNS $211M TO BANKS
The State Bank has closed out $211 million
rupee-dollar swap that it had contracted with some leading banks a
year earlier. In other words the SBP has returned to the banks $211
million that it had bought from them in March 2001 at different
forward exchange rates with the average falling somewhere between
Rs63- Rs64 per dollar.
The SBP had purchased these dollars with the
understanding that it would resell the same to the banks in March 2002
at the exchange rate prevailing at that time.
Sources close to SBP say since the current exchange
rate is a little more than Rs60 per dollar the SBP has earned well
over Rs600 million profit by closing out the $211 million swap. They
say the central bank will also close out by end of June this year
another $100 million plus rupee-dollar swap that was contracted up to
ONION, TOMATO PRICES SHOOT UP
Prices of onion and tomato have gone up by 40 per
cent and 50 per cent in the last few days as compared to prices
prevailing in the first two weeks of the current month.
Onion prices surged to Rs13 per kg from Rs10 per
kg, while in some areas retailers are charging Rs14 per kg. However,
in some Punjab areas like Lahore, onion is selling at Rs1,600 to
Rs1,800 per 100 kg.
Similarly the price of tomato has surged up to Rs24
per kg in various parts of the city. The wholesale price of tomato in
Subzi Mandi ranges between Rs15 to Rs16 per kg.
IMF CLEARS WAY FOR $107M
The International Monetary Fund has announced
completion of the first review of Pakistan's performance under a
three-year Poverty Reduction and Growth Facility (PRGF) arrangement
and cleared the way for the release of a further SDR 86.1 million
(about $107 million).
This brings total disbursements to Pakistan under
the IMF-supported programme to SDR 172.3 million (about $215 million).
The review was completed only after the IMF board
approved two waivers for the non-observance of performance criteria on
tax revenue and credit to public enterprises, and modification of the
tax revenue performance criterion for end-March 2002 and of one
structural performance criterion on tax issues.
The IMF warned that reduction in tax exemptions,
subsidies and unproductive expenditure as well as improved tax
collection would be required for the future.
SBP MOPS UP RS8BN THRU PIBS
The State Bank mopped up Rs8 billion from a fairly
liquid money market on Wednesday through sale of long- term bonds
sticking strictly to the pre-auction target.
The central bank had set Rs8 billion target for the
sale of three-year and five-year Pakistan Investment bonds.
Bankers said the auction of PIBs had attracted Rs17
billion bids of which the SBP accepted Rs8bn and scrapped the rest.
Bankers said the SBP drained out Rs2.66 billion and Rs5.35 billion
respectively through sale of three-year and five-year bonds.
ADAMJEE INSURANCE POSTS
Adamjee Insurance Company Limited reported on
Friday, net loss in the staggering sum of Rs500 million for the year
ended December 31, 2001. Since the insurance giant had already posted
Rs212 million in losses for the first half of the year, everyone was
expecting the full year also to end in deficit.
The government of Denmark is to ratify the protocol
to the existing agreement for the avoidance of double taxation with
The Danish foreign minister is expected to visit
Islamabad in the next month to formally sign the protocol with his
Pakistani counterpart on the part of their respective governments,
Vakil Ahmed Khan, CBR official spokesman and Member Direct Taxes told