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Last updated: Friday 23 Dec, 2005-12.30 P.M (PST)

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KARACHI
Today 12 26 38 Sunny
Tomorrow 11 27 38 Sunny
Day after 11 28 38 Sunny
LAHORE
Today 1 20 87 Sunny
Tomorrow 2 20 87 Sunny
Day after 2 21 87 Sunny
ISLAMABAD
Today 0 18 59 Sunny
Tomorrow 0 18 59 Sunny
Day after 0 21 59 Sunny
HUM%: Humidity In %
FOR.: Weather Forecast
updated: Fri - Sun 23-25 Dec, 2005

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KARACHI         - 021 LAHORE          - 042 ISLAMABAD    - 051 FAISALABAD   - 041 MULTAN          - 061 PESHAWAR    - 0521 CANADA          - 1 KUWAIT           - 965 INDIA               - 91 IRAN                - 98 U.K                   - 44 U.A.E                - 971 U.S.A                - 1

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IN THE NEWS
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. PAKISTAN
 

 

 

 

 
  PAKISTAN

Oct 17 - 23, 2005

TEXTILE EXPORTS UP 13.6PC

The total value of textile exports increased by 13.64 per cent to $1.602 billion during the first two months (July-August) of the current fiscal as against $1.413 billion the same period of last year.

Official data showed that the export of garment, cotton yarn, bedwear and cotton cloth registered a massive growth, while knitwear, tents, synthetic textile and made-up articles recorded a negative growth during the period under review.

Product wise details showed that the export of cotton yarn increased by 45.51 per cent, cotton cloth by 40.97 per cent, readymade garments by 65.54 per cent, bedwear by 42.36 per cent and towels by 2.50 per cent.

However, export of knitwear declined by 26.33 per cent, tents, canvas and tarpulin by 39.58 per cent and art, silk, synthetic textile by 34.47 per cent during the period under review.

The export of primary commodities during July-August 2005-06 registered an overall growth of 21.37 per cent over the same period of last year. The export of rice increased by 39.25 per cent, raw cotton up by 86.7 per cent and fish & fish preparations rose by 93.22 per cent.

While the other three important sectors of the economy - engineering, surgical goods and leather tanned - recorded a decline of 15.33 per cent, 1.13 per cent and 26.2pc, respectively.

Further analysis showed that the export of electric fans declined by 7.64 per cent and specialized machinery for particular industries fell by 30 per cent. While auto parts registered a growth of 8.48 per cent during the period under review.

The export of leather manufacturers increased by 32.94pc and footwear by 52.42 per cent during the July-August 2005-06.

The export of cutlery registered a growth of 16.54 per cent, sports goods 9.80 per cent and petroleum products 13 per cent during the period.

The export of jewellery declined by 24.46 per cent, furniture 85.36 per cent and molasses by 44.06 per cent. Export of gems increased by 2.35 per cent.

ECONOMIC GROWTH TO REMAIN UNHURT

More than two million people have been displaced and property worth billions of rupees lost due to the earthquake, but some economist and analysts believe that economic growth will remain unhurt.

With each passing day loss of life and property is rising and the situation demands huge spending to support the dying people, while the cost of rehabilitation of the displaced is not estimated. However, economists believed that huge demand for monetary spending would create serious shortage of funds to be resulted into widening of budget deficit, wrapping up of several projects and reduce the spending under annual development plan.

Some economists insisted that the economic growth would remain unhurt as the areas destroyed were insignificant in terms of contribution to the economic growth and the country would achieve 7.6 per cent GDP growth for the year 2005-06.

"Neither any textile mill was damaged nor any harm was caused to the cotton crop," said a textile mill owner Abdul Aziz. He said the industrial infrastructure was intact while the agriculture also remained unhurt. Textile sector would be able to achieve its production and export targets as it received no damage by the earthquake. Similarly, the auto, engineering, water and power sectors would continue to move smoothly.

Economists said that several industrial sectors would witness enhanced economic activity as a result of reconstruction of the destroyed areas. "The contribution of this region to the country's economic growth and GDP is minimal," said Tanvir Abid, head of research at Live Securities.

The government has set the budget deficit at 3.8 per cent (Rs263 billion) of the GDP for the year 2005-06. It has been announced by the government that the aid committed by the international community is insignificant, which means that that the government would have to bear the maximum load of spending for the rehabilitation of quake-hit areas.

Analysts estimated that the government would have to spend at least Rs50 billion for the settlement of about over two million displaced people.

BUDGET DEFICIT MAY WIDEN TO 4.3PC

The budget deficit is likely to be in the range of 4.1 per cent to 4.3 per cent of the GDP during the fiscal year 2005-06 as against 3.8 per cent announced in the budget following the fallout of the Saturday's earthquake on the economy.

An analytical report of ABN Amro said that the budget deficit would be wider than their earlier forecast of 4 per cent of the GDP.

It has to be stressed, however, that it is still too early for a definitive assessment of the final outcome on this score.

The report also forecast that the CBR would be unable to maintain the impressive momentum of tax collection it has managed so far in the first quarter of this year, and full year tax revenues will fall short of the budgeted target by around 1.3 per cent.

According to the report, the earthquake will have direct fallout on the government's budgetary position. As the enormous scale of rebuilding effort required, it becomes clear the initial Rs5 billion allocated for relief/reconstruction will need to be upped substantially.

GOVT SEES NO MAJOR FINANCIAL IMPACT

Pakistan's finance managers insist that the devastation caused by Saturday's earthquake will have no negative impact on the economy or budgetary targets. Independent economists just do not agree, although, they say, it is difficult to tell the exact extent of the impact of the tragedy at this point in time.

"It is difficult to tell the extent of the likely impact of the earthquake on the economy as we don't yet know the exact magnitude of the damage, and how much will rehabilitation and reconstruction effort cost," says economist Dr Faisal Bari. "But the colossal tragedy will definitely affect economy and the government's budgetary targets."

The unprecedented earthquake is reported to have killed more than 40,000 people so far, and rendered more than 2.5 million homeless, razing the entire cities to the ground in the NWFP and Azad Jammu & Kashmir. Thousands, including women and children, are yet to be rescued from the debris of the collapsed buildings.

INDUSTRIAL OUTPUT HIT BY WORKERS' DEPARTURE

A number of labour force and workers employed in city's mega industrial estates have left for their homeland to either mourn the death of their family members or manage food and shelter for the loved ones who have survived the earthquake that claimed over 40,000 lives in northern Pakistan.

Many industrial workers from the quake-hit areas are in the process of going back, as huge rush at upcountry bus routes and railway stations is causing delays in their timely departure.

A large number of workers and labour force, who usually prefer going back home a few days ahead of Eid with gifts and parcels for their children and parents, will now be facing a strange ordeal after reaching home empty handed - with only tears in their eyes.

EC TO REVIEW DECISION ON BEDLINEN

European Commission Director General Trade Peter Carls has assured that the EC would look into the dumping margins of eight Pakistani exporters of bedlinen disclosed recently.

He was talking to Pakistan's Commerce Secretary Syed Asif Shah at Geneva, according to a statement issued by the commerce ministry.

Mr Peter assured that the matter would be looked into before sending the recommendation with regard to imposition of final anti-dumping duty to the EC Council of Ministers.

CUT-OFF YIELD ON TBS REMAINS UNCHANGED

The State Bank on Wednesday sucked in Rs4.527 billion through auction of three, six and 12 months treasury bills and kept the cut-off yield on the papers unchanged.

Market experts were expecting an increase in the cut-off yield on 6-month paper in the wake of rising inflation and higher interest rates.

The weighted average annual yield on 6-month and three-month TBs also remained unchanged at 8.1388 and 8.1 per cent, while the yield on 12-month paper showed a slight increase to 8.7907 from 8.7896 per cent.

The SBP accepted bids of Rs3.386 billion for three-month paper, Rs240 million for six-month and Rs644 million for 12-month bills. The SBP remained below the auction target of Rs5 billion.

SHANUL HAQ HAQEE PASSES AWAY

Noted poet and renowned man of letters Shanul Haq Haqqee died from complications of lung cancer in Canada on Tuesday. He was 88. Mr Haqqee leaves five sons and one daughter. Like his wife, well-respected teacher Salma Haqqee who died exactly two years ago, he was buried in Toronto, Canada, where five of his children were by his side when he died in his sleep.

PAKISTAN LOBBYING FOR CUT IN TARIFFS

Pakistan has tabled a proposal on industrial goods relating to tariff reduction formula and treatment of unbound tariffs. A senior official was quoted as saying that Commerce Minister Humayun Akhtar Khan was lobbying for acceptance of Islamabad's proposal for reduction of tariffs on industrial goods.

Elaborating further, the official said that Pakistan was proposing a simple Swiss formula with two distinct coefficients for developed and developing countries. These coefficients should be based on an objective criterion.

RECONSTRUCTION EFFORTS MAY LIFT ECONOMY

Pakistan's efforts to recover from the worst natural disaster in its 59-year history are expected to eventually boost slowing economy and support its currency and stocks.

But analysts said given the northern areas' small contribution to the country's $100 billion economy, any losses would be more than compensated by the reconstruction efforts and aid inflow.

"With the epicentre of the losses in the northern areas, the impact on the wider economy will not be large. In fact, as reconstruction picks up it will be positive for the economy," said Sakib Sherani, ABN AMRO's head of research in Islamabad.

Pakistan's economic infrastructure of ports, airports, dams, factories, telecommunications, financial system, power plants and refineries has largely been spared, and the northern areas constitute a minute portion of the country's agricultural land and industrial estates, Mr Sherani added.

BANKS ASKED TO DEFINE DORMANT ACCOUNTS

The State Bank of Pakistan has directed all banks to immediately develop a well-defined and transparent policy regarding the dormant accounts. The SBP in a circular observed that the banks were classifying the deposit accounts as dormant or inoperative without intimating the same to accountholders causing considerable inconvenience to them.

"Banks should immediately develop a well-defined and transparent policy, if not existing presently, duly approved by the president of the bank for the purpose," says the circular.

GARMENT EXPORTERS SEEK R&D SUBSIDY

The Pakistan Readymade Garments Manufacturers & Exporters Association (Prgmea) has urged the Ministry of Commerce to extend the research and development (R&D) subsidy to promote garment exports to Turkey and other non-traditional markets.

SBP INJECTS RS19.2BN INTO BANKING SYSTEM

The State Bank has injected over Rs19 billion into the banking system that witnessed heavy discounting last week due to severe liquidity crunch.

The SBP conducted reverse Open Market Operation (OMO) and injected Rs19.2 billion to save the market from shortage of liquidity. Due to heavy withdrawal from banks, primarily to avoid Zakat deduction, the banking system witnessed a serious scarcity of liquidity.

The shortage pushed the inter-bank money rates very high and the overnight rate touched 8.9 per cent per annum, just below the discount rate of nine per cent.

AUTOMAKER PROFIT UP BY 37PC TO RS306M

Dewan Farooque Motors Limited (DFML) - the last of the listed car manufacturers - announced financial figures for the year ended June 30, 2005 on Monday, posting 37 per cent growth in after tax profit to Rs306 million, from Rs223 million in the previous year.

The Board declared cash dividend at 15 per cent. Diluted earning per share (eps) for FY05 worked out at Rs3.97 as against Rs2.90 during FY04. The market price of the DFML stock on Monday stood at Rs27.60, which produced the price-to-earnings (p/e) ratio of 7x.

Analysts stated that higher profit ensued from dual impact of volumetric growth in sales and improved operating margin, the latter rising to 7.7 per cent from 6.4 per cent. The company sold 15,999 vehicles during FY05, reflecting growth of 33 per cent from 12,031 units sold last year.

 
 

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