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COVER STORY

LEASING AND MODARABAS

July 28 - Aug 03, 2003  
ISSUE # 30  

The leasing companies and modarabas have virtually assumed the role of DFIs in Pakistan. They survived when fresh investment was low but the entry of commercial banks into leasing business has created uneven playing field. While the cost of funds may be higher for leasing companies, the prudent risk management has kept rental recovery high and mostly in-time. However, it is yet to be seen, how do they perform as the competition heats up?

 

 

 

 

CEMENT
The construction industry is pressing the government for importing cement if the local cement manufacturers fail to pass on the benefits of the 25 per cent duty cut and substantial reduction in fuel cost. The cement industry, in order to maintain the price level, has allegedly formed a cartel so that it could dictate the cement prices in the market. Currently, the cement industry is running at 62 per cent capacity utilization.

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TEXTILE SECTOR
The textile sector which continued to be the spread head of the economy, gaining momentum for robust growth as a result of substantial investment during last three years. The textile sector invested over $2 billion for Balancing-Modernization-Replacement (BMR) besides expansion in the existing projects. The heavy investment is in line with the challenges of the open global trade with effect from January 2005. More textile units by the local investors as well as in collaboration with foreign partners are also coming up especially in Karachi.