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 1. INTERNATIONAL   2. INDUSTRY
 3. FINANCE  4. POLICY
 5. TRADE  6. GULF

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FINANCE

May 20 -June 02, 2002

FDI UP BY 19PC DURING 10 MONTHS

The Board of Investment on Saturday said the flow of Foreign Direct Investment (FDI) during July-April 2001-2002, had increased by 19 per cent as compared to the corresponding period last year.

During the last year from July-April, the FDI inflow was $259 million while this year it rose to $307.6 million. This shows that despite all odds the foreign investors have started reposing confidence in Pakistan and business-friendly policies of the government.

The leading sectors, which attracted FDI during this period are oil and gas sector (129.2 million dollars), power (33.6 million dollars), trade (29.1 million dollars), electronics (15.2 million dollars), transport (17.5 million dollars), financial business (4.3 million dollars), and IT & telecom (9.9 million dollars),

The major investing countries are US (179.9 million dollars), United Kingdom (24.1 million dollars), United Arab Emirates (17.8 million dollars), Switzerland (6.8 million dollars), Germany (9.4 million dollars) and Japan (4.8 million dollars).

"BOI is making extensive efforts for marketing the investment potential and opportunities of Pakistan to the foreign investors. It is expected that during the coming months with the improvement of law and order situation, the FDI inflow will further increase," said an official handout.

It further said that BOI has chalked out an investment marketing plan and the opportunities will be fully taped which are now arising as a gradual change in the perception of Pakistan in positive direction.

Also BOI is launching a campaign to motivate Overseas Pakistanis and to gear them up for strong, timely and effective participation. The resource base of Pakistan and business friendly investment policy provides a lot of opportunities to the countries for investment seeking new markets.

DONORS PLEDGE RS40BN TO PROVINCES

The budget for 2002-03 will witness, for the first time, Rs40 billion direct foreign funding to the provinces for which the next Public Sector Development Programme (PSDP) is being restricted to Rs90 billion only compared to Rs140 billion of the current fiscal year.

The National Economic Council is meeting on June 1 under the chairmanship of President Pervez Musharraf to approve the new development strategy along with the PSDP for 2002-03.

International donors have said that from now onward they would be directly extending financial assistance to the provinces for which the federal government should stand as guarantor. The foreign aid to be offered to the provinces will not be reflected in the federal budget.

GOLD HITS NEW PEAK OF RS6,232

Gold prices hit a new peak of the current year to Rs6,232 per 10 grams on Tuesday followed by suspension of gold imports in the wake of upward rally in gold prices in international markets.

In just two days, gold prices rose by Rs102 per 10 grams. The new price of 115,640 grams bar has touched Rs72,080, up by over Rs4,000 in the last one week.

On Wednesday international gold prices ranged between $319 and $320 grams per ounce. On May 13, it was priced at $311 per ounce. In middle of April, global gold prices were $304-305 per ounce.

$ GAINS IN INTER-BANK, KERB MARKET

The US dollar that had fell below the crucial mark of Rs60 in the inter-bank market on Tuesday made an instant recovery on Wednesday.

Bankers said the greenback gained six paisa against the rupee to close at Rs60.04/60.06 for ready buying and selling against the previous close of Rs59.98/60.00. They said the dollar went up on slight increase in demand from the importers.

"It seems that some importers panicked on disturbing news still trickling in from Pakistan-India borders," said treasurer of a foreign bank. But a seasoned banker close to the State Bank said the central bank had once again defended the dollar at Rs60 to save the exporters from booking exchange rate losses.

In the kerb market the dollar gained 20 paisa to finish at Rs60.65/60.75 for spot buying and selling against the previous close of Rs60.45/60.55.

EU TO GIVE 165M EUROS AID TO ISLAMABAD

The European Commission promised on Tuesday 165 million euros in aid to Pakistan for the period 2002-2006, with officials saying funds would focus on anti-poverty schemes and trade promotion activities.

A statement by the European Union executive in Brussels said the money would be channelled into efforts to improve the quality of basic education in Pakistan and increase enrolment in schools. Good governance projects would also get attention.

PTA TO ISSUE RS1BN RIGHT SHARES

Pakistan PTA Limited told the stock exchange on Monday that the company had received approval of the Securities and Exchange Commission of Pakistan to issue one billion right shares at discount of 40 per cent.

The company noted that the Board of Directors in its meeting on April 29 had decided to raise Rs6 billion through the issue of right shares at a discount, which discount was subject to the approval of SECP and the company's shareholders.

ADBP RECOVERS RS22BN

The Agriculture Development Bank of Pakistan (ADBP) has shown six per cent growth in the recovery of its loans during the first 10 months of the current fiscal year as compared to the corresponding period last year.

PAKISTAN LOSES $100 MILLION

Pakistan has been robbed of US$100 million, and three claims totalling approximately US$970 million are pending with the International Centre for Settlement of Investment Disputes (ICSID).

The situation is so grim that Pakistan's foreign assets, including its reserves with the Reserve Bank of America, PIA's fleet, ships of PNSC, and its embassies, are at risk of being forfeited on the orders of the ICSID.