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Tomorrow 11 27 38 Sunny
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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 31 - Nov 13, 2005

GOVT LOWERS COTTON CROP ESTIMATE BY 2.5M BALES

The federal government has revised its cotton crop production estimate downward by conceding that the crop was likely to be short by about 2.5 million bales of its ambitious original target of 15m bales.

But experts and many farmers, including progressive growers feel that the final output may be further scuttled by another one to two million bales.

They also describe that the revision as belated because the state of the crop had been known for some weeks. A reduced yield was indeed on the cards after rains and windstorm in the first week of September that caused widespread flower shedding and as temperature was high with matching humidity during crucial stages of the crop's development undermined the crop.

High temperature with low humidity is conducive for the crop's growth but it is damaged when both factors are on the higher side. That has happened to the crop that is now being harvested.

Another aspect of the crop worrying farmers is apprehension that that the weight of the produce would be somewhat less than it is on an average year. What exactly has happened can be identified by analyses only but experts are of the view that the final output is likely to be undermined by this factor.

At his press conference in Islamabad, the Federal Minister for Food, Agriculture and Livestock, Sikandar Hayat Bosan, said that monsoon floods vastly destroyed the crop in three districts of southern Punjab that forms the cotton belt of the province. The districts are Rahimyar Khan, Layyah and Muzzafargarh.

However, they weren't the only cotton growing areas affected by weather. A high velocity windstorm and not floods had hit the crop in most of the cotton regions of Punjab. This has already been reported in the press and the authorities should have assessed the situation earlier, experts say.

SIX FIRMS ANNOUNCE RESULTS

As the mandatory one month from the end of quarter ended September 30 almost draws to close, financial results of companies start pouring in. On Tuesday last several companies declared results.

Shell Pakistan posted a profit after tax (PAT) at Rs982 million for the quarter ended September 30, 2005, compared with Rs651 million earned in the same period last year.

Nestle Pakistan made a profit of Rs845 million on sales valued at Rs12.8 billion for 3Q2005, compared with PAT at Rs769 million on sales worth Rs9.7 billion in the comparable period last year. GlaxoSmithKline posted a PAT of Rs1,235 billion on sales valued at Rs6,923 billion. This compared with PAT of Rs1,164 billion on a turnover of Rs6,803 billion.

Earlier on Monday, Pakistan Oilfields announced a PAT at Rs1,441 million for three months ended Sept 30, showing a growth from Rs660 million in the same time last year.

Askari Commercial Bank announced a PAT at Rs1,434 million for nine months ended Sept 30, 2005, compared with Rs1,513 million in the same time last year.

Indus Motors reported 1Q05 PAT at Rs466 million on net sales valued at Rs7,108 million, up from Rs368 million on sales of Rs6,521 million. That translated into eps at Rs5.93, compared with Rs4.69 in last comparable period.

Boards of directors to announce results on Wednesday and Thursday include those of Fauji Fertilizer Company, Engro Chemicals, Sui Southern Gas Company, Pakistan Petroleum Limited, Bank of Punjab, DG Khan Cement, Unilever, Nishat Mills, PTCL and others.

BANKS SEE LOW INTEREST RATES

Banks on Wednesday last invested huge money in 12-month treasury bills in anticipation of a reduction in interest rates in near future.

The State Bank, which held an auction of treasury bills for all three maturities and set a small target of Rs5 billion, went far beyond its target as it found offered rates attractive and within its target.

However, these huge investments by the banks at this stage when the money market looks short of liquidity reflected their approach towards interest rates.

Analysts said the banks invested Rs13.425 billion in T-bills of 12-month maturity, with a hope that the interest rates would decline in future. The cut-off yield for the 12-month paper was 8.79 per cent. The State Bank picked up Rs4.81 billion for three-month and Rs240 million for six-month T-bills at a cut-off yield of 8.1 per cent and 8.13 per cent per annum, respectively. The cut-off yields on all three maturities remained unchanged. The banks have offered a total of Rs26.506 billion for T-bills.

$12BN PLAN FOR RECONSTRUCTION

The government is working on a $10-12 billion reconstruction plan for the quake-stricken regions of Azad Kashmir and the NWFP. According to a newspaper report, the government would arrange about 45 per cent funding (roughly $5 billion) for the plan which is expected to be submitted to the president and the prime minister on November 15 for approval.

The government expects that a donors' conference in Geneva will contribute substantial grants to help Pakistan rebuild roads, bridges, schools and colleges, hospitals, government offices and villages in the quake-hit areas.

The pledges of about $1.2 billion had been made and the government was expecting $4 billion from international donors and bilateral creditors before the end of November to effectively execute the plan, it added.

DELHI OFFERS $25 MILLION FOR QUAKE VICTIMS

India said it had offered an assistance of $25 million to Pakistan for relief and rehabilitation of earthquake victims. An Indian foreign ministry spokesman said the commitment was made by Junior Indian Minister Oscar Fernandes in Geneva. Mr Fernandes represented India at a meeting for earthquake relief to Pakistan organized by the UN Office of the Coordinator for Humanitarian Affairs at Geneva.

"The Government of Pakistan would be welcome to use this contribution for rebuilding homes and rehabilitating people, reconstructing the infrastructure and restoring essential services," the spokesman said.

BUSH ANNOUNCES PRIVATE-SECTOR DRIVE FOR AID

US President George W. Bush has said that executives from some of the world's best-known firms would spearhead efforts to raise private-sector aid for victims of the massive earthquake in Pakistan.

"In the coming days, they will ask Americans to donate directly to a fund set up to provide help to the earthquake victims," Mr Bush said in a statement released by the White House.

The executives leading the aid drive were Jeff Immelt, chairman and chief executive of General Electric; Hank McKinnell, chairman and CEO of Pfizer; Sandy Weill, chairman of Citigroup; Anne Mulcahy, chairman and CEO of Xerox; and Jim Kelly, former chairman and CEO of United Parcel Service of America, Mr Bush said.

PPIB OKAYS THERMAL PROJECTS OF $2BN

The federal government has approved setting up of about 3,000-mw of thermal power projects in the private sector with an estimated total investment of more than $2 billion.

A decision to this effect was taken at a meeting of the board of directors of Private Power and Infrastructure Board (PPIB) presided over by Minister for Water and Power Liaqat Ali Jatoi.

The board also decided to process the project proposals on a fast track basis to avoid power shortfalls in the next couple of years.

The board decided to issue letters of support (LoS) to 200-mw Orient Power Project to be located at Balloki near Lahore and 123-mw Star Power Project at Daharki in Sindh. The construction work on these two projects would start in a couple of months.

The PPIB board also approved in principle the issuance of letters of interest (LoIs) to five independent power producers (IPPs), which are already operating in the country, to set up additional plants of 1,125-mw.

MILLS BUILDING UP LONG POSITIONS

The cotton market showed a firm trend as mills continued to build up long positions at the current levels fearing further increase in prices.

As a result, physical business expanded to about 20,000 bales, mostly from Punjab ginneries, interesting feature being that bulk of the business was finalized below or around Rs2,400 per maund.

SBP DESIGNS FRAMEWORK FOR RISK MANAGEMENT

The State Bank has designed stress-testing framework for all banks and DFIs to improve risk management capacity to ensure the financial health of these institutions.

The SBP issued a set of guidelines for banks and DFIs for the strengthening of risk management skills. The circular said that the financial institutions all over the world were increasingly employing sophisticated techniques for managing risks. Stress-testing is one of such techniques, which has been used to assess risk exposures across the institution and to estimate the changes in the value of the portfolio, if exposed to various risk factors.

"Keeping in view the divergence of skill level and available resources among banks and DFIs, the model, initially, focuses on "Simple Sensitivity Analysis". However, with the increasing know-how and availability of more data the model will over the time undergo further refinement," said the circular.

PPL PROFIT RISES

At the annual general meeting of Pakistan Petroleum Limited, directors told shareholders that PPL had earned an after tax profit for the year 2004-05 (July-June) amounting to Rs8.6 billion, reflecting an improvement of 30 per cent over the previous year. Earning per share stood at Rs12.57 for the latest year and Rs9.65 for 2003-04.

PICIC FINANCIAL RESULTS

PICIC Asset Management Company Ltd - investment adviser to PICIC Investment Fund (PIF) and PICIC Growth Fund (PGF) -- announced results of the funds for 1Q05 ending Sept 30.

In a press statement, the management company stated that during the quarter under review, total income increased to Rs774 million as compared to a loss of Rs112 million in the corresponding period last year, showing a growth of 791 per cent, which also included realized capital gains on account of NRL privatization.

PIF declared an interim cash dividend at 10 per cent (Re1 per certificate), resulting in a cash payout of Rs284 million for the quarter. PGF declared an interim cash dividend at 15 per cent (Rs1.5 per certificate) and an interim bonus at 20 per cent, resulting in a payout of Rs551 million.

DOLLAR FALLS BELOW RS60 AFTER SIX MONTHS

The greenback on Wednesday last slipped below Rs60 after six months in the open market as sellers rushed to liquidate their holdings, said currency dealers.

They said that the flow of donations had accelerated from all over the world for earthquake victims and the exchange companies were busy in making pay orders for liquidating the dollars into rupees.

The US dollar on Wednesday traded at Rs59.90 in the open market and in the inter-bank market it stood at Rs59.74 to a dollar, the level last time hit on April 25 this year.

PIA'S REVENUE UP

The PIA's Board of Directors meeting was held under the chairmanship of Tariq Kirmani to review the recent performance and future plans of the national flag carrier.

It said aggregate revenue was recorded at Rs15,981 million in this quarter as against Rs14,556 million last year, denoting an improvement of Rs1,425 million.

GERMANY APPROVES ENERGY PROJECT

The German Ministry of Economic Cooperation (BMZ) has approved the Renewable Energy and Energy Efficiency (REEE) project for Pakistan. It was disclosed by Guntram Glassbrenner, an energy efficiency expert from German Development Cooperation-GTZ, in a meeting with Small and Medium Enterprise Development Authority experts at Smeda head office .

Mr Guntram was accompanied by Martin Kruska, head Climate Change Services of EUTECH, a leading German company dealing in energy management.

ABL PROFIT

Pre-tax profit of Allied Bank jumped by 20 times to Rs3.394 billion during the third quarter ended September 30, 2005, as compared to Rs163 million in the same period last year.

 
 

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