FINANCE

 

Aug 19 - 25, 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF


ADB OFFERS $3BN FOR GAS PIPELINE PROJECT

The Asian Development Bank (ADB) has offered to fund the $3 billion gas pipeline project from Turkmenistan to Pakistan via Afghanistan.
"We have made available $1.5 million for conducting the feasibility study of the Turkmenistan gas project.

 

It will be further discussed by the ADB's Executive Board which is due to meet in Manila on Sept 20," said ADB Country Director for Pakistan, Mr Marshuk Ali Shah.

Speaking at a news conference on Monday, he said that the ADB had moved rapidly to express its willingness for managing resources for the gas project.

Now when the ADB is ready to offer funding for this project the senior officials of the Ministry of Petroleum and Natural Resources do not think that the laying of gas pipeline from Turkmenistan to Pakistan via Afghanistan is a feasible project.

When contacted they said that unless the situation in Afghanistan was fully normalised, there was no hope of gas pipeline project from Turkmenistan being undertaken. Nevertheless, they said that laying of gas pipeline from Iran to Pakistan seemed a viable project which could also be extended to India.

Officials expressed the hope that various political issues linked with this project will soon be overcome. They said the Russian gas company, Gazprom, was interested in investing in this project because of its being feasible.

"Once the gas pipeline project from Iran was finalised and agreed, Pakistan could get about $300 million to $400 million annual royalty from India," an official said.

PETROL PRICE RAISED BY 10 PAISA

The price of petrol (MS 87 RON) was increased by 10 paisa per litre to Rs33.94 from Rs33.84 by the Oil Companies Advisory Committee (OCAC) on Thursday. However, the committee has maintained the price of high speed diesel (HSD) at last fortnight's level of Rs19.08 per litre.

According to an OCAC's press release, the price of high octane blending component (HOBC) had been raised to Rs38.40 per litre from Rs38.33 per litre.

The prices of other oil products have been slashed by 0.23 per cent to 1.18 per cent. The ex-depot fixed sale price at 29 designated locations will be effective from August 16-31.

SBP WAITS FOR FURTHER FALL OF EURO

The State Bank believes that the euro at its present value at 97 cents is too expensive. Central bankers say it would be imprudent to purchase euro at this price and keep it as foreign exchange reserves.

A senior SBP official said that the real strength of the euro is not more than 94 cents. "Let the euro come around that level. Only then we will think about how much of reserves can be put in the new currency," he said.

Recently the board of directors of the SBP allowed investment of up to $750 million foreign exchange reserves into fixed income US-dollar denominated bonds. The SBP is expected to make this investment through a triple A rated global investment bank. The central bank has $5 billion worth of foreign exchange reserves out of total $7 billion plus. The rest is held by the commercial banks.

SPICES PRICES FALL BY 8PC

The wholesale prices of various spices have started showing a drop by three to eight per cent following government's decision of cutting import duties to 10 per cent from 20 per cent on August 10.

According to senior vice chairman of Pakistan Kiryana Merchants Association (PKMA), Jaffer Kudia the wholesale price of black pepper has now plunged to Rs4,075 per 40 kg, from Rs4,200. Similarly, the price of imported cloves has declined to Rs17,000 per 40 kg, from Rs18,500.

SCHEMES OF MERGERS

Securities and Exchange Commission of Pakistan (SECP) has cleared 14 schemes of mergers involving leasing companies, modarabas and mutual funds as part of its efforts to bring about consolidation in the non-banking financial sector.

FOURTH TRANCHE AND IMF TARGETS

Now that the IMF review mission has arrived in the capital and started holding formal talks with the senior officials of the ministry of finance, it is generally being argued whether this time the Fund would extend the fourth tranche of about $120 million on political considerations or look for any merit.

The present government was treated exceptionally favourably by the IMF in the past for extending second and third instalments, out of $1.3 billion Poverty Reduction Growth Facility (PRGF) without meeting some of the important benchmarks, specially those relating to revenues, fiscal deficit and the development budget.

PCB ISLAMIC BANKING COUNTERS

PICIC Commercial Bank (PCB), a subsidiary of Pakistan Industrial Credit and Investment Corporation, plans to set up Islamic banking counters at its branches by the end of this year in line with State Bank of Pakistan (SBP) directives.

SIX MILLION DOLLARS DEBT RESCHEDULED

Pakistan signed an agreement on consolidation of debt with Finnvera Plc Finland on Tuesday. Under the agreement, Pakistan's debt amounting to $6.122m as of Nov 30, 2001, has been rescheduled.

The amount is to be paid in 23 years including five-year grace period at the interest rate of six month Libor for US dollars plus 0.55 per cent per annum. This was the first agreement on rescheduling arrangement signed with Finnvera Plc Finland under the Paris Club Agreed Minute of December 13, 2001, said an official announcement.

RESERVES

Minister for Finance Shaukat Aziz on Saturday said that foreign exchange reserves have touched $7.1 billion, and the current account is surplus for the last several months, which ensures country's economic security.