FINANCE

 

Sep 02 - 08, 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF


PRIVATE INSURANCE COS RESULTS IMPROVE

Financial results released by three of the four private sector life insurance companies last week, showed that for all the gruelling competition with the public sector giant, SLIC, private companies were putting their best foot forward.

 

For the half year ended June 30, 2002, American Life Insurance Company (Alico) and the EFU life posted improved profit, while losses at Commercial Union (CU) stood reduced, compared with the corresponding period of the earlier year. Half term numbers of Metropolitan Life were not readily available. Metropolitan the smallest of the four nonetheless was the first in the sector to have disbursed cash dividend. The company paid dividend last year at 5 per cent to the minority shareholders "out of interest free loan by the sponsor directors."

Alico, which had begun business from May 25, 1995, reported profit of Rs22.4 million for the six months to end-June 2002, up from Rs20.5 million for the similar period of last year. EFU Life Assurance showed profit of Rs8.9 million, which was almost twice the profit of Rs4.5 million earned during the first half of 2001. CU was again in the red, but the loss for the latest half year amounted to Rs10.1 million, down from loss of Rs32.9 million in the same time of earlier year.

During the six months under review, underwriting premium at EFU stood at Rs341.6 million, up from Rs233.4 million in the same period of 2001. Included was renewal premium at Rs169.8 million, that contributed the largest chunk; the figure last time was Rs117.2 million. Interest, return and dividend provided income of Rs71.3 million, compared with Rs42.6 million and the company also wrote back Rs13.9 million reserve for depreciation on investment. Net claims increased to Rs63.9 million, compared with Rs50.1 million.

WASHINGTON MAY WRITE OFF $1BN DEBT

The US government has indicated that it would write off Pakistan's roughly $1 billion out of the total of $3 billion debt which has just been rescheduled for 23 to 38 years.

According to informed sources, the Bush administration has specified in the proposed US 2003 budget that roughly $1 billion debt could be cancelled to help the President Musharraf government to further improve its budgetary position.

"There is a strong possibility that the United States government would cancel about $1 billion debt, and if that does not happen, then half of our US debt is expected to be converted into swap funds to alleviate poverty and allocate more funds for education and health", a source said.

ASIAN BANK TO PROVIDE $2.4 BILLION

The Asian Development Bank has formulated a $2.4 billion Country Strategy and Programme (CSP) for Pakistan to support a number of initiatives, including poverty alleviation, good governance and targeted projects for women.

"We will be extending average $800 million annually for ensuring good governance, agriculture, rural development, energy development, transport, finance, health and education, and water supply and sanitation in both urban and rural areas," said ADB Country Director for Pakistan, Murshuk Ali Shah.

Speaking at a news conference on Monday, he said out of $2.4 billion proposed assistance, 60 per cent had been earmarked specifically for programmes that have a direct impact on poverty reduction. In terms of projected allocations for the various sectors, 27 per cent is for the social sector, 22 per cent for governance and finance, and 13 per cent for agriculture and rural development.

25 TFCS FLOATED IN TWO FISCAL YEARS

Around 25 issues of Term Finance Certificates (TFCs) worth Rs15.74 billion were floated in the capital market during last two fiscal years and more are expected in the current financial year, according to latest data of Karachi Stock Exchange (KSE).

Total 39 issues of TFCs worth Rs22.09 billion have been floated since 1995 that captures 5 per cent of the market capitalization.

The leasing sector leads in issuance of TFCs with 28.4 per cent share, fuel & energy 21.5 per cent, chemical & pharma 17.4 per cent, banks & investment companies 8.6 per cent, synthetic & rayon 8.2 per cent, and textile 5.2 per cent.

SBP TEAM IN DUBAI

A three-member team of State Bank officials has left for Dubai to explore the possibility of investing part of its foreign exchange reserves in fixed income securities.

Bankers close to the SBP told that the team, headed by deputy governor Tawfiq A. Husain, would meet senior fund managers there.

The fund managers would brief the delegation on how gainfully Pakistan can invest in the world market some $750 million out of its $7.3 billion liquid forex reserves.

DOLLAR DOWN 1.2 PER CENT

The US dollar shed 22 paisa against the rupee in the inter-bank market. Senior bankers said the dollar closed at Rs 59.31/Rs 59.33 for ready buying and selling against the weekend close of Rs 59.53/ Rs 59.55.

OMAN TO INVEST

Oman would explore more investment opportunities in various fields, particularly in petroleum, financial and industrial sectors of Pakistan, to take benefit of the climate of restored investors' confidence.

WB TO GIVE $20M LOAN

The government and the World Bank signed legal documents for $20 million interest free loan the WB would offer to support Community Infrastructure and Services Project in Azad Kashmir.

PIA EARNS

The PIA had earned a pre-tax profit of Rs552 million during the first half of the current year. In the first quarter of the year, PIA had earned a pre-tax profit of Rs.1.097, million but due to slump in passenger traffic there was a loss during the second quarter, Director Finance PIA informed the Board.