observed that Pakistan
was the single largest recipient of the bank's direct assistance to the
private sector amongst all development member countries of the ADB.
Total assistance to the sector now stood at $402
million (Rs14 billion), including $241 million as assistance to private
sector enterprises and over $129 million as complementary loans. In
addition to the direct assistance provided to the private sector, the
ADB generates business opportunities for the private sector through its
public sector activities and helps governments create enabling
conditions for private sector investment. In this connection, it had
provided more than $2 billion so far. He said an SME Sector Development
Programme for $200 million was proposed for this year.
Privatization and Investment Minister, Dr Hafiz
Sheikh, on the occasion assured the Asian Development Bank of his
government's full support in its programme for strengthening private
sector, particularly the SME sector in view of its role in economic
development. The minister commended the ADB's decision to launch a
Public-Private Infrastructure Finance Project for $200 million.
Referring to his experience of working with the World Bank and as
adviser to the government of Sindh, he said it was for the government to
set the pace for multilateral agencies in the initiatives for
development and not vice versa.
RS70BN DEBT RAISED THRU PIBS IN '02-03
The government raised more than Rs70 billion local
debt through sale of long-term Pakistan Investment Bonds in fiscal year
July/June 2002/03 against the initial target of Rs25 billion. Senior
bankers say what forced the government to increase its borrowing through
PIBs to this extent was a one-time big auction of Rs30 billion bonds
towards the close of the last fiscal year.
The government did this to increase the yield on
these bonds that serves as a benchmark for determining the rates of
return on national saving schemes. But generally the government
borrowing through PIBs overshot the target because it helped the
government retire more expensive debt secured through national saving
schemes in the past. Government sources say that Rs25 billion target set
initially in the last year budget for borrowing through long-term bonds
was indicative in nature.
OPIC MAY NOT APPROVE FINANCING FOR TEXTILE
The textile sector may not be considered for project
financing out of the $100 million facility, the Citibank has earmarked
for project financing after entering into a risk-sharing participation
agreement with Overseas Private Investment Corporation (OPIC) of the
USA. Top bankers well versed with OPIC financing said the textile sector
would not be able to get project financing under this facility primarily
because OPIC would not approve of it. The reason is that the US itself
is a textile exporting country and OPIC normally does not encourage
financing of textile sector of the competing nations. When a bank makes
loans under a facility approved by OPIC for risk sharing it normally has
to seek the OPIC approval for the reason that OPIC being a party to it
has to evaluate all risks involved.
PTCL DECLARES 35PC DIVIDEND
Pakistan Telecommunication Company Limited (PTCL)
declared dividend at Rs3.50 (35 per cent) for the year ended June 30,
2003 and net earnings slightly above Rs23 billion, beating analysts'
forecasts on both counts. Market was expecting the telecom giant to
announce dividend at Rs3 (30 per cent) per share and post after tax
profit in the range of Rs21.2 to Rs21.8 billion.
PICIC TO SET UP INSURANCE COMPANY
Pakistan Industrial Credit and Investment Corporation
(PICIC) proposes to establish an insurance company that would offer
general insurance services.PICIC already owns a commercial bank and had
recently expressed intention to launch into consumer financing. The
PICIC board also declared right issues for all the 13 ICP funds under
PICIC management. The 13 ICP funds constitute Lot 'B' and comprise 2nd;
5th; 6th; 7th; 9th; 10th; 13th; 14th; 16th; 17th; 18th; 22nd and 24th
GOLD SHOOTS UP
Gold prices have shot up by Rs168 per 10 grams in the
local markets to close at Rs7,210 on September 22 from Rs7,042 per 10
grams on September 18, as a result of rising international prices in the
SLIC HOLDS 82PC MARKET SHARE
With State Life Insurance Company of Pakistan (Slic)
still clinging on to the lion's share of 82 per cent of the life
insurance market in Pakistan, the four private sector life insurance
companies are struggling to wrest their portion of the business, with
mixed success. Ten years down the road, following the re-opening of life
insurance business to the private sector in 1993, progress, albeit slow,
is noted in the four companies — all listed at the stock market.
At the close of last financial year ended December
31, 2002, the total gross industry premium stood at Rs10,288 million, of
which Slic commanded 81.5 per cent. Among the private companies, EFU
Life took the lead with 10.64 per cent; Commercial Union followed with
5.2 per cent; American Life Assurance held 2.42 per cent and
Metropolitan Life — the tinniest of the companies — eked out just
about 0.22 per cent of the gross premium. Total premium underwritten by
the private sector companies during the year was up by 23.7 per cent
over the earlier year.