FINANCE

 

Dec 02 -Dec 15 , 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF


JAPAN TO RESCHEDULE $5BN DEBT

Japan has made all necessary arrangements for the rescheduling of its $5 billion bilateral debt owed by Pakistan by December this year."We have just concluded negotiations with France and Germany to reschedule their $2 billion debt (each $1 billion) and now we will be signing a bilateral agreement before Dec 30 with Japan for $5.3 billion debt as per the decision of the Paris Club," said Secretary Economic Affairs Division (EAD), Dr Waqar Masood Khan.

 

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

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. Then there were individual creditors who committed to either cancel their debts or have shown their willingness to swap them for social sector funding for up to $1.5 billion.

According to officials of the ministry of finance, the full extent of relief would be measured once the country had worked out all the bilateral agreements with bilateral creditors. But based on rescheduling alone, a 30 per cent reduction in net present value of outstanding stock of debt has been achieved.

With the addition of cancellation, debt swaps and interest rate reduction, this figure was likely to rise to about 40 per cent of reduction in net present value.

The present government claims that over the past three years, it had lowered the burden of the most expensive foreign debt liabilities on Pakistan by nearly $2 billion from $38 billion to $36 billion as on June 30 this year.

TWO EXCHANGE COMPANIES SET TO START OPERATIONS

NBP Exchange Company Ltd has got the State Bank licence to work as a foreign exchange company and its management says the company will start operations from January 1, 2003.

Chief Executive of H&H Exchange Company Ltd. Haji Haroon said his company had also got the SBP licence adding that the company would start operations sometimes next month.

NBP Exchange Company is a wholly owned subsidiary of state-run National Bank of Pakistan and is set to start business with a paid-up capital of Rs300 million.

RS220M FINANCING SYNDICATED

Saudi Pak Industrial and Agricultural Investment Company has syndicated a term finance facility to the tune of Rs220 million to meet the cost of balancing, modernization, replacement and expansion programme of Nina Industries Limited, one of the leading export-based textile companies in Pakistan.

Led by Saudi Pak Industrial and Agricultural Investment Company, the other participants of the new syndicate are Saudi Pak Commercial Bank and Pak Libya Holding Company, according to a company source.

ADB FINANCIAL MARKET PLAN

The Asian Development Bank is expected to finalize and approve its financial market governance programme, aimed at strengthening Pakistan's weak financial sector, next month.

This was stated by ADB representative in Islamabad Mashruk Ali Shah while addressing a seminar on strengthening corporate governance in Pakistan organized by the SECP in collaboration with UNDP.

The ADB official said the FMG programme would help alleviate poverty in the country by facilitating private sector-led economic growth and generating jobs. He said the programme would also help the financial sector mobilize resources on a long-term basis through savings and investment.

CUT IN TBS RATE

The State Bank cut the weighted average yield on six-month treasury bills to 4.76 per cent from the previous 6.34 per cent. This paves the way for reducing the export refinance rate from 6.5 per cent in November to 5.5 per cent in December.

Senior bankers said the central bank mopped up Rs24.4 billion against the target of Rs20 billion in an out-of-schedule auction of T-bills. The SBP had to auction six-month T-bills instead of three-month and one-year T-bills to lower the export refinance rate which is linked with the weighted average yield of six-month bills.

LOCAL BANKS BEGIN CREDIT MARKETING

Big banks with surplus liquidity are going to launch a campaign for credit marketing. They have already started renewing their relationship with large corporate customers.

Top business leaders say relationship managers of large local banks including those in the public sector are making frequent visits to business houses for this purpose.

"Relationship managers of National Bank and Muslim Commercial Bank visited our business house and made a detailed presentation on how best we can borrow from them," said a former chairman of All Pakistan Textile Mills Association.

RECKITT BENCKISER

For Reckitt Benckiser the fast moving consumer goods company (FMCG) that makes household and pharmaceutical products (mortein, veet, dettol, disprin, robin blue, air wick, cherry blossom, disprol and others) the staggering loss of Rs213 million suffered in 1999 is now a distant memory. That was the first deficit ever encountered by the company.

SAUDI PAK

The 81st board of directors meeting of Saudi Pak Industrial and Agricultural Investment Company Limited approved a total financing of Rs490 million to 13 companies in manufacturing services and financial sectors.