FINANCE

 

Dec 16 -Dec 22 , 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF


EURO 140M GERMAN HELP FOR UPLIFT PLANS

Pakistan and Germany the other day agreed on the utilization of an overall amount of grants, soft loans and debt for development swaps of approximately 140 million Euro.This was decided during the negotiations held in Islamabad for the first time since 1996 on German-Pakistan development cooperation. This sends out a clear signal that relations in the development field are now returning to normal.

 

The two governments had already agreed last year - under the overcharging aim of poverty reduction - to focus in future on three areas, namely: basic education, basic health and renewable energies, and this is where the new funds are being targeted.

Germany's commitment to renewable energies is part of the pledge Chancellor Schroeder made in Johannesburg to forge a strategic partnership with developing countries in the energy sphere.

Germany has long been involved in hydropower in Pakistan and this year a soft loan of Euro 301.1 million from the financial cooperation fund has been allocated to the financing of a medium- sized hydropower station in the north of the country.

Euro 25 million are being targeted at health projects, including the National Health Academy in Islamabad which will benefit from the allocation of Euro 2 million (technical co-operation) being provided for the training of medical staff.

This year, the German government once more agreed on a debt-for- development swap with

The same amount in debt relief had already been made available last year and will be used to introduce a technical stream at more than 1000 secondary schools.

POWER TARIFF CUT BY 12 PAISA

The cabinet the other day decided to reduce the prices of various utilities and, as a first step, slashed power tariff by 12 paisa per unit with immediate effect.

"The cabinet has decided to give certain relief to the common man by reducing the prices of essential utilities like power, gas, ghee, sugar, flour, etc.; "Information Minister Sheikh Rashid Ahmad told newsmen after the first meeting of the Prime Minister Mir Zafarullah Khan Jamali's cabinet.

However, he pointed out, electricity prices were being reduced by 12 paisa per unit for all consumers - domestic, industrial, commercial and agricultural.

NEW $200M BONDS NEXT YEAR

The government is considering issuing new $200 million bonds early next year after having received better credit rating from international credit rating agencies.

Official sources said here recently the Ministry of Finance has contacted a number of global investment banks to sell the new bonds on behalf of Pakistan.

"Most probably the new bonds will be issued either in dollar or euro," said a senior official of the ministry.

S&P RAISES PAKISTAN'S LONG-TERM RATINGS

Pakistan's long-term foreign currency sovereign credit rating has been raised to B from B- while the long-term local currency sovereign credit rating has been raised to BB- from B+ by Standard and Poor's Rating Services.

Standard and Poor's (S&P) says outlook for both long-term ratings is stable. At the same time, the rating agency has reaffirmed its B short-term local and foreign sovereign credit ratings on Pakistan.

BANKS HAVE EXCESS LIQUIDITY TO SELL LOANS

State Bank Governor Dr Ishrat Husain the other day said the banking system had excess liquidity, necessitating aggressive marketing to sell their loans.

Presenting the address of welcome to Adviser to the Prime Minister on Finance and Economic Affairs Division, Shaukat Aziz on the inaugural session of Housing Finance Conference here, organized by the SBP, Dr Ishrat said the competitive forces, reduced borrowing demand from the government, lower interest rates, upsurge in rupee deposit mobilization, de-dollarization of the economy and rising inflows of remittances have created an excess supply of loanable funds at the disposal of the banking system.

DADEX ETERNIT

For the latest year ended June 30, 2002, Dadex posted pretax profit amounting to Rs16.8 million on a turnover of Rs525.6 million. Profit before tax last year was Rs29.7 million with the turnover at Rs599.0 million. Earning per share worked out at Rs1.18 for the latest year.

$700M NSS CERTIFICATES SOLD

Overseas Pakistanis have purchased special saving certificates and special defence certificates worth over $700 million only in one month period.

According to sources in the Central Directorate of National Saving (CDNS), these certificates were sold in the United Arab Emirates (UAE) in November this year, and there were expectations that by December 30, 2002, about $100 million would have been sold due to better interest rate being offered to overseas Pakistanis.

ADB TECHNICAL ASSISTANCE GRANT FOR PUNJAB

Asian Development Bank (ADB) has approved a technical assistance (TA) grant of $680,000 to the Government of Pakistan for enhancing capacity for resource management and poverty reduction in the province of Punjab.

The grant, according to ADB announcement here the other day, includes co-financing by the Poverty Reduction Cooperation Fund for $230,000 and the Government of United Kingdom for $200,000.

The TA would provide input to the proposed Punjab Resource Management Programme, which is in ADB's loan pipeline for 2003.