29 - May 05, 2002
IMF FOR MORE FOREX SPENDING
The IMF wants more spending of foreign exchange,
whose increased inflow has inflated the dollar reserves and triggered
a stronger rupee.
While the government takes pride in building up
unprecedented reserves of $5.4 billion, the IMF officials are of the
view that "a more aggressive absorption of foreign exchange
inflows may be warranted to avoid further appreciation of the
The government is targeting a reserve of $6 billion
by June-end this year, though an IMF mission report indicates that the
authorities share the Fund's view on increased absorption of foreign
exchange inflows "with sterilization as needed to keep the
monetary aggregates on target."
Appreciating that the State Bank has made good use
of large official grants and private capital inflows to build
reserves, the Fund officials are of the view that "it has not
fully avoided an appreciation of the currency that may complicate
export recovery. And reserve money growth has accelerated to levels
that warrant close watch over the coming weeks and months."
Incidentally, the IMF staff appraisal mission, also
sees that with capital inflows receding and imports returning to
normal levels, upward pressure on the exchange rate is expected to
subside supporting exports, which, it says, would start to recover in
the coming months.
The IMF staff review report, however, concedes that
among other factors home remittances improved because of "the
growing confidence in the rupee and in the domestic financial
system." And the latest country survey of the Economist on
Pakistan says that "estimates of the extent of the remittances
through the hawala system range up to $11 billion. At least $3 billion
could be routed through official banking channel within the next three
HIGHER US INVESTMENT RAISES FDI TO $287.4M
Pakistan attracted $287.4 million foreign direct
investment in the first nine months of this fiscal year of which
$164.1 million came from the US.
"This means Pakistan can easily achieve the
revised target of $355 million for the entire fiscal year," said
a senior official of the ministry of finance.
The inflow of $287.4 million contractual FDI
between July 2001 and March 2002 comes as a big source of relief for
the country that attracted only $322 million in the entire fiscal
GOVT TO ENHANCE SNGPL, SSGC RATE OF RETURN
The government has decided to increase the rate of
return to gas utilities SNGPL and SSGC — and revalue their assets to
maximise privatization proceeds and private sector investment in gas
A senior government official told that the decision
has been taken on the recommendation of the World Bank that would also
finance a study for the assets revaluation of gas utilities and
updating the financial targets according to market rates.
Sui Northern Gas Pipelines Limited (SNGPL) and Sui
Southern Gas Company (SSGC) are currently operating on the basis of a
fixed rate of return on net assets, before interest charges and taxes.
GOLD TOUCHES ALL TIME HIGH
Gold prices on Wednesday touched all time high in
the current year at Rs6,000 per 10 grams as a result of rising global
prices. The yellow metal had been under pressure in the current month,
reaching new peak of Rs5,958 per 10 grams on April 2.
SBP STICKS TO PIBS SALE TARGET
The State Bank on Wednesday again signalled to the
financial market that keeping interest rates stable is the need of the
The SBP sent this signal by selling only Rs3
billion 10-year Pakistan Investment Bonds against total bids of more
than Rs8.9 billion. When the State Bank had announced the auction two
weeks ago it had set the sale target exactly at Rs3 billion.
DOLLAR AT RS60 AGAIN
The US dollar that had slipped below Rs60 in the
inter-bank market on Tuesday inched up again to settle at
Rs60.02/Rs60.04. Senior bankers said the US unit managed an immediate
recovery as buying rose sharply at Rs60 a dollar.
The Hub Power Company
Limited (Hubco) announced net profit of Rs1.8 billion for the quarter
ended March 31, 2002. Net profit of Pakistan's biggest Independent
Power Plant (IPP) for the nine months (July-March 2001-02) stood at
Fertilizer Company Limited posted pre-tax profit of Rs1.21bn and after
tax profit at Rs761.8 million for quarter ended March 31, 2002.
For the nine months (July-March 2001-02), Pakistan Telecommunication
Company Limited posted pre-tax profit of Rs20.88 billion, reflecting
11 per cent growth over pre-tax profit of Rs18.82 billion in the
corresponding period of the previous year.
producer posted after tax profit of Rs140.2 million for the Q1 ended
March 31, 2002, reflecting a sharp fall from after tax profit of
Rs340.2 million in the corresponding period of 2001.
PICIC Commercial Bank:
For quarter to end
March, the bank reported 29 per cent improvement in pre-tax profit to
Rs74.1 million, from Rs57.5 million in the same quarter of 2001.
Sui Southern Gas Company:
SSGC reported 5.3 per
cent increase in after tax profit to Rs957.5 million for the nine
months to end-March 2002, from Rs909.7 million in the comparable
period of earlier year.
cement company produced net loss of Rs44.9 million for the quarter
ended March 31, which went to widen its accumulated deficit to Rs2.094
billion. The company is plagued by the huge financial charges of
Rs129.9 million, which wiped out all of the operating profit of Rs84.5
The national flag carrier posted net profit for the Q3 ended March 31,
at Rs182.1 million (before taxation and minority interest). For the
nine months (July- March 2001-02), the shipping company reported
profit of Rs470.8 million.