After completing her 'O' levels and 'A' levels from
the Foundation Public School and The Lyceum, she joined the Institute of
Business Management specializing in Finance. Being a diligent student,
she was awarded the Gold Medal for having the highest Grade Point
Average in her BBA/MBA class. After her MBA, she worked at the Japan
Credit Rating Company Limited for nearly 18 months where she analyzed a
number of financial institutions, textile and chemical companies. She
was also involved in the credit rating of Term Finance Certificates.
Currently, she is working as an Investment Analyst at Khadim Ali Shah
Bukhari and is analyzing Fertilizer and Textile sector and Financial
we say that the GDP growth is driven by the agriculture sector in
say that agriculture primarily determines our GDP growth would be quite
true, in particular the cotton crop. As we have seen in the early
nineties, the year the cotton crop is poor the GDP growth slows down.
This is due to a number of reasons: 1)
Pakistan is an agrarian economy and hence not only does agriculture feed
and cloth us but is also the sole source of income for the majority of
the population. 2)
It provides raw material for most of our industrial sectors for example
textile and sugar. Therefore, the year the cotton crop is poor the
textile sector is adversely affected by rising raw material costs. Thus
both directly and indirectly agriculture determines Pakistan's GDP
are the reasons for lower yield in various crops?
per hectare for most crops in Pakistan is lower than the average for the
region for a number of reasons. Firstly, farm sizes and practices, the
small average farm size makes most modern tools and mechanization of
farming techniques unprofitable for the farmer. As a result we continue
to use antiquated techniques such as bullock driven ploughs and manual
harvesting. Each process takes longer and hence whereas other regions
get two crops per season we only get one. Secondly, farmers are not
educated about the most effective use of fertilizer and crop rotation so
as to improve their soils. Growing the same crop year after year robs
the soil of its nutrients. Therefore, crop rotation is often cited as
one of the best ways to correct this problem. Each soil is different and
hence the NPK mix required is different. However, most farmers believe
that just using urea is enough and yields are affected. Lastly, lack of
resources, as the average farmer is fairly poor he cannot afford to make
timely investments to improve yield.
can we improve yield?
most important factor to improve yield is to provide the farmers with
adequate resources and to educate them for using these resources
effectively. Fertilizer companies and the agricultural institutions are
attempting to do this but effort by the government is lacking. Farmers
must be made aware of optimum fertilizer mix, the type of pesticides to
be used and crop rotation to enhance income. Furthermore, the government
should also help the growers to effectively market their product so that
they can get the maximum possible price. Lately, efforts have been made
to enhance funds available to the sector by encouraging commercial banks
to increase agricultural credit and the average rates on the loans have
declined significantly. I believe that the government needs to ensure
that the right people get the loans at the right time. Another factor
having the potential to improve yield is timely availability of water.
Although we have a very advanced irrigation system, considerable
proportion of water is lost. I believe that this needs to be corrected
via greater storage facilities and small dams.
PAGE: What has
been the trend in Non-performing Loans during the last three years?
the 1990's NPLs rose drastically mainly due to corruption in the system.
The levels became so astronomical that the banks overall performance was
badly affected. During the last three years the banks have become
increasingly aware of this menace and efforts have been made to make
credit disbursement more efficient and improve recovery. This is largely
due to the State Bank of Pakistan putting pressure on the banks
especially the nationalized commercial banks and increasing disclosure
requirements by the financial institutions. In addition, professional
management inducted into the large nationalized banks has also
contributed significantly to the decline in the pace of NPLs growth.
Furthermore, the level of provisioning against these loans has increased
considerably, which is a very positive sign.
PAGE: With the
declining interest rates, returns on bank deposits have become virtually
negative. What is the way out?
return on deposits being approximately 4% for most of the banks and the
inflation rate being nearly 5%, depositors are earning a negative real
rate of return. What is needed is effective investment management where
the savers have a diversified portfolio i.e. a mix of investments in
equities, fixed income securities, National Saving Schemes and bank
deposits. This would optimize the risk return trade-off and ensure that
the savers get sufficient returns.
offer attractive dividend yield. Why are investors shy to invest in
the current declining interest rates scenario, dividend yields and
returns on equity investments are very attractive. However, the main
reason why the average investor is wary of investing in the stock market
is the lack of awareness. He is not sure how the system works and what
are the possible pitfalls. He is also not provided accurate information
on a timely basis, which could enable him to make an informed investment
decision. Hence, he is unwilling to take the risk. What is needed is to
promote the awareness of how the stock exchanges operate, here the
brokerage community can play an active part.