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

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FINANCE

June 03 - 09, 2002

WB TO GIVE $500M ON JUNE 12

The World Bank will disburse $500 million Structural Adjustment Loan (SAC-2) to Pakistan on June 12 immediately after its board meeting on June 11 in Washington, says a senior official of the bank.

He told on Monday that another bank's board meeting will be held in the first week of July to approve $100m budgetary support for Sindh government and $90m similar support for NWFP.

The $500m SAC-2 is the biggest amount to be offered to any country in one single shot at a marginal 0.75 per cent service charges. It will be extended from the Bank's International Development Assistance (IDA) window. Earlier, Pakistan had been offered $350m SAC-1 for improving balance of payment support in 2001 which was also a single tranche disbursement.

The official said that SAC-2 will be given for carrying out structural reforms, financial management reforms, audit and accounts reforms, education reforms and oil and gas sector reforms. The money will also be available for poverty alleviation and that it will basically cover the government's priorities contained in the Interim-Poverty Reduction Strategy (I-PRSP).

He said that it was good to see that the government was monitoring the implementation of the measures in the I-PRSP which will help increase transparency and ensure scrupulous funding to various institutions.

Sources in the multilateral agencies believed while the World Bank, IMF and the ADB were extending all necessary financial support, Pakistan will have to generate a surplus in the non-interest current account of the balance of payments of nearly one billion dollar annually over 2000-2004 or about 1.5 per cent of the GDP.

This will be in sharp contrast to average annual resource deficits of $1.5 billion, about 3 per cent GDP, run in the 1990s and will require major export expansion as well substantial import saving. In addition, the government should also mobilize at least $3bn from privatization sales.

ICI TO MAKE FURTHER INVESTMENT IN PTA

ICI Pakistan Limited proposes to make further investment in Pakistan PTA Limited by way of equity and provision of guarantees for obligations of that company.

The notice of the extraordinary general meeting of ICI Pakistan to be held on June 29, stated that the following resolution would be passed as a special resolution: "Resolved that the company do make of further investment in Pakistan PTA Limited by subscribing to its proportionate share of the right shares proposed to be offered by Pakistan PTA Limited at a discount and by providing from time to time guarantees for the obligations and liabilities of Pakistan PTA Limited up to a maximum aggregate sum at any one time of Rs15.8 billion, which guarantees may be provided in substitution of or by way of extension of any such guarantees already provided and or by issuance of further or additional guarantees".

$ UP IN KERB, INTER-BANK MARKET

The US dollar gained 10 paisa in spot buying and selling in the kerb market on Thursday on short supply. Forex Association of Pakistan said the greenback closed at Rs60.40/ Rs60.50 against the previous close of Rs60.30/Rs60.40.

But dealers at major currency brokerages said the dollar traded at Rs60.50/Rs60.60 for spot buying and selling throughout the day.

In the inter-bank market also the dollar gained two paisa more to close at Rs60.15/Rs60.17 for ready buying and selling on the back of oil import and debt payments. Some bankers said they had seen dollar trading even at Rs60.18.

IDBP SEEKS RS17BN

More than 40 years old Industrial Development Bank of Pakistan (IDBP) is begging for a cash injection of over Rs17 billion to make it viable and operational by June-end next.

KESC CAPITAL RAISED TO RS100BN

At the extraordinary general meeting on Monday, shareholders' in Karachi Electric Supply Corporation Limited (KESC) approved the increase in authorized capital from Rs50 to Rs100 billion and the conversion of loans totalling Rs65.3 billion into equity, a statement released by the Corporation said.

BANKS COOL TOWARDS 3-MONTH T-BILLS

Most banks are reluctant to invest money in three-month treasury bills after realizing that the State Bank wants to keep interest rate stable.

The banks reluctance was evident on Wednesday auction of T-bills in which only one out of seven primary dealers submitted bids for three-month bills. (Primary dealers are the banks that sell government securities in the market on behalf of the SBP.)

SLIC LIFE FUND RISES TO RS75BN

The life fund of the State Life Insurance Corporation (SLIC) has increased from Rs70 billion to Rs75 billion during the current financial year.

ADB OFFERS $100M TO SME BANK

The Asian Development Bank (ADB) will extend 100 million dollars to Small and Medium Enterprise (SME) Bank for capacity-building and strengthening loaning to the SMEs in the country.

"The ADB has so far disbursed 20 million dollars grant for SME Bank and the Small and Medium Enterprises Authority (SMEDA) and now my Bank is hoping to shortly receive 100 million dollar to be essentially used for capacity building," said the President of SME Bank, Kaiser Naseem.

SHAHMURAD SUGAR MILLS

The company released on Tuesday the financial figures for the half year ended March 31, 2002, posting an after tax loss in the sum of Rs66.2 million. This replaced the after-tax profit of Rs19.1 million earned in the corresponding half year of 2001.

GLAXO WELLCOME PAKISTAN

The recently released accounts for the quarter ended March 31, 2002, shows that the company holds Rs2.6 billion in total assets, which is close to its market capitalization of around Rs2.4 billion on 33.6 million shares at the ruling price of Rs70 per share.