. .
A



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

A

FINANCE

July 08 - 14, 2002

IMF APPROVES $114 MILLION FOR PAKISTAN

The International Monetary Fund on Wednesday approved $114 million tranche for Pakistan under the Poverty Reduction Growth Facility (PRGF). The total disbursements under the programme amounts to $343 million. The amount would be disbursed in the central bank's account on July 22.

The Fund also completed the second review of Pakistan's performance under a three-year, SDR 1.03 billion (about US$$1.37 billion) PRGF arrangement.

In a press release, the IMF said in approving the disbursement, its executive board granted a waiver of Pakistan's non-observance of the quarterly revenue target for the period that ended March 31, 2002. The shortfall in revenue essentially reflected continued lower-than-expected imports in the aftermath of September 2001 events.

After the board meeting, Deputy Managing Director and Acting Chairman of IMF, Eduardo Aninat, said that "forceful implementation of the restructuring strategy for the two power utilities, the Water and Power Development Authority and the Karachi Electric Supply Corporation, is essential for putting an end to their persistent drain on budgetary resources. Electricity tariff adjustments are needed to correct past increases in input costs, while appropriate safety-net measures should protect the poorest consumers.

"Moreover, both public utilities need to be held more clearly accountable for their performance reducing leakage, theft, administrative costs, and enforcing bill collections. The implementation of the financial improvement plan for Wapda, agreed with the World Bank, will be monitored closely and results reported to the public. Regarding KESC, the challenge will be to complete the required financial restructuring, while establishing sufficient regulatory certainty for potential investors, in order to allow its privatization in a transparent and timely manner. Sustained implementation of the government's wide-ranging governance agenda will help support private sector activity and investor confidence," Aninat said.

NIT DECLARES DIVIDEND

National Investment Trust (NIT) announced payout of Rs1,919 million in dividend at Rs1.20 per unit for financial year ended June 30, 2002.

CD$447M DEBT SWAP FOR SOCIAL UPLIFT SOON

The Canadian government would shortly be approving the conversion of Canadian dollar (CD)447 million debt into social sector funding to help Pakistan, said Canada's Minister for International Cooperation , Ms Susan Whelan, on Wednesday.

In addition, she said, her country would also provide CD15.4 million for improving lives of Pakistani women and provide quality basic education to Afghan refugee children in the country.

17 TFCS WORTH RS10BN ISSUED LAST FISCAL

As many as 17 Term Finance Certificates (TFCs) worth Rs10 billion were issued during financial year 2002, taking the total value of Pakistan's listed private debt (TFC) market to Rs19 billion.

Study prepared by Mohammed Sohail, head of research at InvestCap shows that performance of primary TFC market in financial year ended June 30, 2002, was the best so far, since 10 companies had offered the debt instrument of Rs5.5 billion in FY01 while only four TFCs of Rs1 billion were floated in financial year 2000.

Declining interest rates (6-month T-Bill rate came down to 6 per cent), coupled with growing awareness was stated to have made the TFC market attractive during FY02.

UNIT TRUSTS DECLARE PROFITS

The Pakistan Income Fund (PIF) and Pakistan Stock Market Fund (PSM) the two unit trust schemes launched by Arif Habib Investments in March this year, announced distribution of profits in the form of bonus units for unit holders on their books on June 30, 2002, the company said in a press statement.

PIF had declared profit of Rs10.68 million for the period and a bonus issue of 3.50 units for every 100 units held, which translated into an annualised distribution of 11.66 per cent.

PSM declared profit of Rs9.22 million and bonus of 2.75 units for every 100 units held, reflecting annualised return of 8.94 per cent.

BANKS MAY SLASH LENDING RATES

The lowering of the profit on national saving schemes by up to 2.5 per cent is going to push banks to cut their lending rates in the first half of this fiscal year.

PAKISTAN STEEL PAYS RS2.28BN

Pakistan Steel on Monday made a payment of Rs2.28 billion to banks as second instalment due for fiscal 2001-02 against restructured loans. The amount includes Rs945.8 million as an instalment and Rs122.5 million as mark-up.

SBP TO CONTINUE SUPERVISING NBFIS

The State Bank said on Monday that non- bank financial institutions (NBFIs) would continue to be regulated by it till further orders.

"The NBFIs have been asked to continue sending the periodical returns and other statements/information to SBP as per existing instructions," SBP says in a press release. "The date of transfer of supervisory functions of NBFIs from State Bank to Securities and Exchange Commission of Pakistan will be announced shortly."

POL PRICES UP

The Oil Companies Advisory Committee (OCAC) on Sunday revised upward the prices of six petroleum products, from a minimum 40 to a maximum 75 paisa, while keeping the rate of only the JP-1 unchanged.

$ DOWN 6.25PC IN INTER-BANK, 9.8PC IN KERB

The US dollar fell by 6.25 per cent in inter- bank market and 9.8 per cent in the open market in fiscal year July/June 2001/2002 that closed on Saturday.

The US dollar closed at Rs60.03/Rs60.05 for ready buying and selling on June 29, 2002 down from Rs64.07/Rs 64.09 on June 30, 2001. In the open market it finished trading at Rs60.20/Rs60.25 for spot buying and selling down from Rs66.70/Rs66.80 at end- June 2001.