FINANCE

 

July 15 - 21, 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

$1BN FDI PROJECTED FOR 2002-03

The government is projecting $1 billion foreign direct investment (FDI) during 2002-03 specially from the United States and the United Kingdom.

"Despite ongoing global recession and slowdown in 

 

world economies, we are projecting to have $1 billion FDI mainly from the USA and UK", said Chairman Board of Investment (BoI), Wasim Haqqie.

Talking on Saturday, he also said that final figures showed that FDI worth $375 million was received during 2001-02 compared to $322 million of 2000-01. "So there is an increase of about 18 per cent which is not bad despite unfavourable circumstances and events of September last year", he added.

Giving the details, he said that FDI mainly came in oil & gas, power, Information Technology (IT), transport and communication sectors. "Out of $375 million, $200 million FDI was received from the United States", Haqqie said.

He said Pakistan had attracted a total of $5.9 billion foreign investment during the last 13 years which mainly included 40 per cent from the US and 22 per cent from the UK. He said that efforts were also being made to attract domestic investment which in fact would eventually lead to more foreign investment in the country.

When asked how was the government luring foreign investors, he said that basically the existing multinationals and overseas Pakistanis were being given much importance for increased investment during the current financial year.

He said about 500 overseas Pakistanis have been approached by the BoI for making new investment in the country. They also included prominent overseas Pakistanis and 25 honorary counsel generals in 19 countries.

EGYPTIAN COS TO INVEST $1BN IN PAKISTAN

Egyptian companies have so far invested $300 million in Pakistan, whereas many companies are considering investing about $1 billion more in various sectors, Ambassador of Egypt Dr Mahmoud El Said stated on Wednesday.

Talking to newsmen at a farewell reception, hosted for him by secretary general of Islamic Chamber of Commerce and Industry at a local hotel, the Egyptian envoy said that an Egyptian company was the first, that submitted letter of interest for privatization of Pakistan Telecommunication Company Ltd (PTCL).

"We hope to bring more investment in telecom and oil exploration sectors," he said, adding by the end of this year, more Egyptian companies would invest in Pakistan.

$452M BONDS ENCASHED IN 2001-02

The volume of the special US dollar bonds in circulation shrank by $452 million in the outgoing fiscal year. Senior bankers say the outstanding amount of bonds fell to $924 million at end-June 2002 from $1.376 billion at end-June 2001.

The $452 million worth of bonds encashed in the fiscal year 2001/02 include three-year, five-year and seven-year bonds but bankers say the maturity wise breakup of the encashed bonds is not available.

Bankers say the pace of encashment of dollar bonds picked up since October last year in the wake of the developments taking place after 9/11. They say that people started making faster encashment of these bonds also because of falling LIBOR (London inter-bank offered rates) as the rates of profit on these bonds are linked with LIBOR.

BANKS BORROW RS31.5BN FROM SBP

Banks had to make an overnight borrowing of Rs31.5 billion from the State Bank on Thursday to make up for the shortfall in the liquidity level.

Bankers said the liquidity level declined after the State Bank siphoned off Rs66 billion from the system through auction of treasury bills held on Wednesday.

BANKS TO DECIDE RATE OF RETURN ON FCY DEPOSITS

The State Bank has allowed all the banks and non-bank financial institutions (NBFIs) to offer as much rate of return on foreign currency deposits as they deem fit.

Earlier the banks were supposed to ensure that the return on foreign currency deposits do not exceed LIBOR (London Inter-bank offered rate).

The central bank has notified its decision to all the banks and NBFIs through a circular BPD no 17.

RUPEE GAINS EIGHT PAISA

The rupee gained eight paisa in the inter-bank market on Wednesday as the dollar buying spree for corporate debt payments was over. Senior bankers said the rupee closed at 60.04/60.06 to a US dollar for ready buying and selling against the previous close of 60.12/60.14.

SME BANK RECOVERS RS4.5BN

The SME Bank has made total recoveries of Rs4.5 billion over the past 28 months, says a press release issued on Tuesday. The bank, which commenced operations in January this year, now has a total new loan portfolio of Rs 665 million to more than 700 enterprises in 20 business sectors, it said. An amount of Rs136 million has been disbursed through leasing.

$158M RECEIVED

The Privatization Commission has received $158 million on account of disinvesting five oilfields, and formally handed them over on Monday to the buyers.

Out of 7 oilfields, which have been privatized, the oilfields for which the amount received are: Badin 1, Badin 11, Turkwal, Dhurnal and Ratana.

DISCOUNTING FALLS SHARPLY IN JUNE

Banks resorted to much lesser discounting last month as the liquidity crisis that had hit them in May in the wake of growing tension on Pakistan-India borders eased off.

The term discounting refers to the banks borrowing from the central bank for upto three days against government securities at a fixed interest rate called the SBP discount rate or repo rate.

Sources close to the State Bank told that the banks had to make overnight borrowing of only about Rs25 billion in June down from more than Rs130 billion in May.