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 5. TRADE  6. GULF



Dec 31, 2001 - Jan 06, 2002

New bank on the cards to loan small enterprises

The government has decided to establish Small and Medium Enterprise (SME) Bank with an initial capital of one billion rupees to offer loans to small and medium enterprises.

"This new SME bank will be inaugurated on Jan 1 to arrange considerable loans for our small and medium enterprises in order to further strengthen pace of industrialization in the country," said Minister for Finance Shaukat Aziz.

On Wednesday, he said that Small Business Finance Corporation (SBFC) and Regional Development Finance Corporation (RDFC) were being merged into one organization to be called SME Bank.

He said that SME Bank would work like Micro Finance Bank and would be run by highly competent professionals, a number of whom had just been recruited from the private sector.

"We are making a powerful Board of the SME Bank so that it could function without any outside interference," the Finance Minister said. He said the Board would be totally independent to take vital decisions to promote SMEs in all the four provinces.

"And after having streamlined on modern lines the SME Bank will be privatized," Mr Aziz said, adding that the government would ensure that the new bank should offer loans to deserving small and medium enterprises.

The finance minister also said that from the first week of January 2002, he would start holding separate negotiations with the United States, Japan, Germany, France and South Korea for getting the issue of interest rate finalized on loans, rescheduled by the Paris Club recently.

The process of negotiations, he said, would have started by now had there been no Christmas and New Year holidays. These negotiations, he said, would have to be finalized by Sept 30 next year as per the decision of the creditors of the Paris Club.

SBP making changes in forex system

The State Bank of Pakistan (SBP) is making necessary changes in the foreign exchange system for the benefit of exporters. SBP Governor Dr Ishrat Hussain announced on Wednesday that the process of changing the foreign exchange system would be completed before the end of this year.

Speaking at a luncheon gathering of the businessmen, organized by the North Karachi Association of Trade and Industry (NKATI), the SBP Governor made it clear that there was no ceiling fixed for the bank credits for the private sector.

FDI records 58pc rise in July-Nov

Foreign Direct investment (FDI) has recorded 58 per cent increase to $161.60 million in July-November 2001 against $102.40 million during the corresponding period last year.

"This shows that foreign investors have started reposing confidence in Pakistan and business-friendly policies of the government," says an announcement of the Board of Investment (BoI), on Monday. It expects that FDI flow during the current financial year will be around $500 million.

SBP keeps banks liquid ahead of year-end

The State Bank on Wednesday left much of excess liquidity in the inter-bank market to help banks finance the year-end withdrawals.

The SBP sucked in Rs9.3 billion from the market and left more than this to keep banks liquid enough at the year-end: the auction of the treasury bills through which the SBP siphoned off excess liquidity had generated Rs20 billion bids. But the SBP accepted only Rs9.7 billion bids at discounted rates to mop up Rs9.3 billion - and left the rest of the liquidity in the market.

"The purpose is to help banks finance anticipated withdrawals at the year-end," said treasurer of a leading foreign bank.

Telephone line rent increased

The Pakistan Telecommunication Authority on Monday authorized the PTCL to increase monthly line rent of its connections across the country.

"PTA has allowed a cap of Rs300 per month on line rent, which is higher by Rs18 as compared to the existing rate," a PTA press release said. The PTA has approved the PTCL's proposal to reduce installation charges from Rs3,690 to Rs2,000.

3 Chinese firms to invest in oil, gas

Heads of three Chinese Petroleum Companies met President General Pervez Musharraf on Saturday and expressed their willingness to invest in Pakistan for undertaking oil and gas exploration.

The President told them that his government was laying greater emphasis on the development of the natural resources, particularly, oil, gas and coal. He assured the foreign investors particularly those from the friendly country of China that they would get all possible incentives to undertake the task.

Petroleum Minister Usman Aminuddin who was present during the meeting told APP that the companies would soon enter into formal agreement with Pakistan for exploration of oil and gas. The companies, he added, have also expressed their interest in off-shore drilling.

M.F.M.Y Industries to buyback at Rs11.50

The board of directors of M.F.M.Y Industries has decided to buyback shares from the minority shareholders at the rate of Rs.11.50 per share, leading to its subsequent delisting from the Karachi Stock Exchange as sought by the management.

The buyback price has already been approved by the Karachi Stock Exchange and the company's board meeting will be held on Dec 28, to give green signal for the moping operation, according to KSE sources.

PIBs get huge response

Despite a one per cent cut in the coupon rate the 10-year Pakistan Investment Bonds attracted many investors on Saturday when the bonds were first sold at the reduced rate.

The State Bank said it received Rs26.45 billion bids for the bonds against the target of Rs10 billion.

The SBP sold about Rs10.45 billion worth of bonds at the cut-off premium of 37 paisa per Rs100.