FINANCE

 

Aug 26 - Sep 01, 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF


$5BN DEBT RESCHEDULING ARRANGEMENTS FINALIZED

The government has finalized necessary arrangements for rescheduling the $5 billion bilateral debt by October this year.

"We have just concluded a debt rescheduling agreement with Finland and accords with remaining

 

eight countries, including the United States and Belgium, for about $5 billion debt will be signed by September/October 2002," Secretary Economic Affairs Division (EAD) Dr Waqar Masood told.

He said a number of bilateral agreements had been signed earlier for $12.5 billion debt rescheduled by the Paris Club for 35 years with a 15-year grace period.

"Out of $5 billion, $3 billion debt to be rescheduled belongs to the United States alone," Dr Waqar said, adding the EAD had worked out all the details to complete the job in time.

The government considered re-profiling of $12.5 billion debt a big achievement as nearly 50 per cent of this debt was due for payment by 2007. There were also individual creditors who showed their willingness to swap them for social sector funding for up to $1.5 billion.

According to the officials of the finance ministry, the full extent of the relief will be measured once the government completes all the agreements with the bilateral creditors. However, based on rescheduling alone, a 30 per cent reduction has been achieved in the net present value of the outstanding stock of debt.

With the addition of cancellation, debt swaps and interest rate reduction, this figure is likely to increase to about 40 per cent.

The government claims that over the past two and a half years, it had lowered the burden of most expensive foreign debt liabilities by nearly $2 billion from $38 billion to $36 billion as on June 30 this year. This represents a reduction of nearly 5 per cent in foreign liabilities.

REMITTANCES RISE TO $307 MILLION IN JULY

Gross home remittances rose to $307.4 million in July 2002 up from $ 84.7 million in July 2001.

The amount includes cash flows; encashment of foreign exchange bearer certificates and foreign currency bearer certificates; Hajj remittances and remittances from Iraq-Kuwait war affectees.

The State Bank said in a statement on Monday that out of the total $307.4 million remittances received in July $305.4 million was sent back home by overseas Pakistanis working abroad. In July 2001 workers remittances totalled $84.7 million.

$10M LOAN ACCORD WITH WB SIGNED

The government and the World Bank on Wednesday signed $10.08 million accord for the Global Environment Facility Trust Fund Grant Agreement - Protected Areas management project.

To implement this project, Global Environment Facility will provide a grant support of $10.08m, involving no liability on the part of the government.

The project reflects government's commitment to protect country's environment and it's continued efforts to protect ecology, bio-diversity and wild habitats, which form a major national asset. It aims to assist the government in achieving sustainable conservation of globally and nationally significant habitats and species through a series of integrated activities aimed at engaging custodial communities in the management of protected areas.

FRESH GUIDELINES FOR LOANS WRITE-OFF

The State Bank has worked out new guidelines for irrevocable loans and advances write-off and set three criteria for the settlement of stuck-up loans now estimated at around Rs278 billion.

Top business leaders held a detailed meeting with the governor of the State Bank and his deputy on Wednesday to discuss the long pending issue of the stuck-up loans.

FFC RESULTS

At the operating level, the company was able to post profit of Rs194.7 million for the half year ended June 30, 2002, compared with operating loss amounting to Rs485.3 million suffered in the corresponding period of the previous year.

COCA COLA PLANS INVESTMENT

The Coca Cola Company has informed the government about its plans to make substantial investment in Pakistan that could generate around 12,000 direct and 45,000-90,000 indirect job opportunities in five years.

A press release issued by the Ministry of Commerce said that this was stated by Ahmet C. Bozer, the President of Coca Cola Eurasia & Middle East Division, who called on Commerce Minister Abdul Razak Dawood on Wednesday.

BIDDING FOR TCCL

The bidding for the sale of 90 per cent shares of Thatta Cement Company Ltd (TCCL) will be held on September 7, 2002.

EFFECTIVE YIELD ON PIBS FALLS SHARPLY

The banks paid a very high premium on 10-year Pakistan Investment Bonds on Tuesday, thus accepting a lower than fixed yield: This indicates that their hopes of interest rate cut have not faded.

The 10-year PIBs fetched a maximum premium of Rs8.86 on every Rs100 that lowered its effective yield to 9.60 per cent against a fixed yield of 11 per cent per annum.

The SBP sold Rs7.955 billion worth of these PIBs on premium to mop up Rs8.667 billion from the market. The auction of the bonds had attracted total bids worth Rs23.96 billion face value of which the SBP accepted Rs7.955 billion bids and scrapped the rest.

SHELL ANNOUNCES DIVIDEND

The Board of Directors of Shell Pakistan Limited (SPL) has recommended a final dividend of Rs14 per share, which together with the interim dividend of Rs4 per share declared on February 7, 2002, makes for a total distribution of Rs18 per share for the financial year ended June 30, 2002.

The overall profit after tax increased by one per cent to Rs1.06 billion.