The new assistance will support the legal,
institutional and capacity-building costs of devolution and related
reforms with a focus on local government performance, accountability
and service delivery.
According to an announcement made by the local
office of the Asian Bank, the ADB over the last two years has been
assisting the government of Pakistan in its efforts to create an
enabling environment for service delivery and poverty reduction
through reforms in legal, technical and fiscal domains in support of
decentralisation. To date, the ADB has provided $1.4 million in grant
for fiscal decentralisation, an essential component of the
In addition, it has provided a grant of $600,000
for gender reform programme, which is essentially linked to the larger
reform menu leading to decentralisation of financial and
administrative functions from the provincial to local governments.
As further support for fiscal decentralisation, the
ADB in September this year has approved an additional $450,000
technical assistance grant to support implementation of
This technical assistance grant is scheduled to
become effective in October 2002 and will be implemented over a period
of 18 months from October 2002 to March 2004. The support to
implementation of devolution technical assistance is designed in the
context of the requirement to mobilise and direct an array of
technical, institutional, and fiscal resources in support of
devolution in Pakistan. This assistance will reinforce the federal
government's efforts to coordinate development assistance for
EFFECTIVE YIELD ON PIBS FALLS
Banks and corporates continue to buy 10-year
Pakistan Investment Bonds at high premiums foreseeing a drop in its
yield in future.
Banks and corporate funds bought these bonds for up
to Rs110.75 per every Rs100, thus accepting 9.3 per cent yield per
year against the fixed coupon rate of 11 per cent. The State Bank sold
Rs12.2 billion bonds to mop up Rs13.5 billion from a fairly liquid
DOLLAR SLIPS BELOW RS59
The US dollar fell below Rs59 in the inter-bank
market. This was not unexpected. Senior bankers said they were
anticipating this amidst rising inflow of foreign exchange.
Dealers at leading banks said the dollar closed at
Rs58.96-Rs58.97 for buying and selling against the previous close of
Rs59.01-Rs59.02. They said earlier in the day the dollar traded as low
ISLAMIC TFCS MAY HIT MARKET
Three leading modarabas are likely to come up with
Islamic term finance certificates by the end of this year if the
regulators clear way for their introduction.
Modaraba managers say they badly need TFCs to raise
money because borrowing funds from banks is becoming unfeasible,
particularly after the entrance of the banks in the leasing business.
MASHREQ ACCORD WITH
Mashreq Bank — the foreign bank operating in
Pakistan — has entered into an amalgamation agreement with Crescent
Investment Bank Limited (CresBank) and International Housing Finance
Limited (IHFL), CresBank announced.
The agreement signed and sealed, stipulates that
CresBank and IHFL would be amalgamated with Mashreq Bank, as joint
venture partners. The arrangement would create a "locally incorporated
banking company," which would be a stock market listed entity.
PICIC DECLARES DIVIDEND
Relying on the steadfast clientele, Pakistan
Industrial Credit and Investment Corporation (PICIC), set a new record
among the banks and Development Finance Institutions by declaring
highest dividend of 33.5 per cent for the year ended June 30, 2002.
The Privatization Commission has finalized a
financial advisory services agreement with Merrill Lynch for
disinvestment of Pakistan Petroleum Limited (PPL).
According to the Privatization Commission, Merrill
Lynch was the top ranked firm amongst the five firms participated in
the bidding process for the financial advisory services contract. An
agreement will be executed shortly in this regard.
ENGRO'S PROFIT RISES TO RS854M
Engro Chemical Pakistan posted a net profit of
Rs854 million for the period January-September 2002, up 21 per cent
from the level of last year.
The demand for the private sector credit is not
picking up pace leaving banks with no choice but to invest surplus
liquidity in the government securities.
In the first quarter of this fiscal year all
commercial banks combined saw credit retirement of Rs28 billion from
the private sector. Heads of credit of leading local and foreign banks
say that in October net credit disbursement has started but the pace
has been very slow.
Metropolitan Life Assurance Company of Pakistan
Limited — the smallest of the four private sector life insurance
companies — said that the Board of Directors had recommended issue of
right shares in the ratio of 2:3.
The company expects to raise Rs40 million through
the current right, which it said would enable the company to meet the
statutory requirement of minimum paid-up capital.
SINDH TO GET RS600M MORE
The Sindh government will get about Rs600 million
more than budgeted share of the federal divisible pool in the current
fiscal year following the decision to refix provincial ratios of
resources distribution on the basis of population census in 1998.