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IN THE NEWS
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  PAKISTAN

Nov 14 - 20, 2005

EUROPEAN COMMISSION GRANTS 20 PC CONCESSION TO PAK TEXTILES

The European Commission has agreed to grant 20 percent concession on the normal rate of customs duty on Pakistani textile products with effect from January 2006.

Humayun Akhtar Khan Federal Minister for Commerce disclosed this at a meeting held at the All Pakistan Textile Mills Association.

Describing the decision as a big success he said that the success was due to efforts of the government. He clarified that there is no such thing that Pakistan has not agreed to some conditions imposed by the EU, however pledged to continue the efforts for achieving GSP plus status for Pakistan.

Regarding government's policy to export entire stocks of cotton lying with the Trading Corporation of Pakistan and short crop in the current season resulting to hike in the prevailing cotton prices, APTMA urged the commerce minister to review the policy on urgent basis and allow TCP cotton for sake to local mills alone.

Ahmed Kuli Khan Khattak, Chairman APTMA speaking on the occasion expressed his concerned that the government has not done enough on gaining access to the EU GSP Plus scheme for textile items. He was of the view that excluding Pakistan from GSP Plus scheme by Eruo0peean commission is unfair given the country's increasing development needs and key role in the international struggle against terror.

The minister was informed that over past five years, spinning capacity of Pakistan has enlarged but the government has failed to give a clear cut policy on increasing the cotton crop to ensure availability of sufficient cotton locally at reasonable rates. The minister however agreed to take the stakeholders into confidence in policy making and promised to look into the existing policy of disposal of cotton held by the TCP.

EXPORTS TO CHINA UP 36 PER CENT IN NINE MONTHS

Pakistan's exports to China show an upward trend, registering an increase of about 36 per cent in nine months of this year. The exports were amounted to around $612 million from January to September as against $448 million in the corresponding period last year.

According to the Chinese customs authority, there was a considerable increase in the export items like cotton yarn, cotton fabric, leather, chromium ore, copper and chemical. The Chinese side calculates the export figures on the basis of the origin of the exported items, including those come to the mainland through Hong Kong, and the Chinese financial calendar is counted from January to December.

According to a report there was still great room for enhancing the exports, particularly of non-traditional items, including sport and engineering goods, handicrafts, furniture, surgical instruments, marble, onyx, jewellery and agro-based products.

Pakistan's exports to China are likely to get further boost, when tariff on a number trading items would be reduced to zero under the early harvest programme (EHP) to be effective from January 2006.

Shahid Mahmood, commercial counsellor in Pakistan Embassy, expressed the hope that the trade volume would increase in the coming months, when the list of export items to China would also include rice, mango and some other agro-based products. He was confident that Pakistan's annual exports to China would reach around $800 million by the end of December.

The bilateral cooperation on the government-to-government-level has been excellent over the years. A number of major public sector development projects have been undertaken in the country with the financial and technical assistance of state-run Chinese companies.

JORDANIANS INVITED TO INVEST IN OIL AND GAS

Petroleum and Natural Resources Minister Amanullah Khan Jadoon has appreciated the government of Jordan for its help and assistance for earthquake victims and also lauded Shaheen Business and Investment Group's $50,000 donation for relief and rehabilitation efforts.

The minister was talking to a seven-member Jordan's Shaheen Business and Investment Group (SBIG) led by the deputy prime minister and discussed with them investment opportunities in petroleum and mineral sectors.

Mr Jadoon said that there existed a lot of potential and opportunities for the Jordanian group to invest in oil, gas and mineral sectors, besides participating in the proposed gas, LNG and coastal refinery projects for the mutual advantage.

Petroleum secretary Ahmed Waqar gave a detailed briefing about oil, gas and mineral sectors development activities in Pakistan. He said during the last five years, the petroleum sector had witnessed a tremendous growth, increasing oil production from 55,000 to 66,000 bpd, gas from two to 3.7 billion cubic feet and LPG to 1,500 tons per day.

SBP RAISES RS7BN, INJECTS RS11BN

The State Bank has simultaneously picked up liquidity through sale of treasury bills and then injected higher amount through reverse repo to cool down the heated money rates.

The SBP sold treasury bills of three-month, six-month and 12-month maturity without a change in cut-off yield. The central bank raised Rs7.652 billion, which immediately created a liquidity shortage and the SBP came back with Rs11.480 billion to inject into the system.

Banks preferred to invest in one-year T-bills despite a liquidity shortage and were willing to invest more, as the bids offered for 12-monthn T-bills alone accounted for Rs17.142 billion. The total bids offered for investment were of Rs20.952 billion.

The SBP sold T-bills of three-month for Rs352 million at a cut-off yield of 8.1 per cent, six-month for Rs150 million at 8.1388 per cent and 12-month for Rs7.150 billion at 8.7784 per cent.

COTTON ARRIVALS FALL BY 24 PC

A total of 4.737 million bales of cotton have reached the ginning factories till Nov 1, 2005 compared to last year's 6.258 million bales, showing a production shortfall of 24.30 per cent.

According to the fortnightly report issued by the Pakistan Cotton Ginners Association (PCGA), in 20 cotton-growing districts of Punjab a total of 33,35,712 bales arrived at the factories compared to last year's 48,27,833 bales on the same date. So, the crop had shown a steep shortfall of 48.11 per cent.

In nine districts of Sindh, the production had been estimated so far at 1,401,780 bales compared to last year's 1,430,736 bales, showing a nominal decrease in output. A PCGA spokesman told APP that in view of the shortfall in production the cotton rates had slightly gone upward. The government's support price rate for phutti is Rs975 per 40 kg and that of lint Rs2,269 per maund.

CHICKEN PRICES SHOOT UP

Chicken prices have touched the ceiling, rising to Rs80 from Rs76 on November 1, Rs70 on October 1 and Rs60 per kg on September 1, 2005. Similarly, poultry meat prices are currently ruling at Rs135-140 per kg from Rs130 on November 1, Rs120 on October 1 and Rs105 on September 1.

As a result of this, owners of broasted chicken outlets have also increased the price by Rs20 for a full broast, while chicken tikka sellers have raised the price by Rs5 from Eid day.

CELLPHONE USERS TO REACH 16M BY DEC

The Pakistan Telecommunication Authority (PTA) in its annual report 2005 has forecast over 16 million mobile cellular telephone subscribers by December 2005, which is expected to cross 26 million by 2006. Quoting a research done by Business Monitor International (BMI) on Pakistan mobile market, a report said, there would be more than 16 million mobile subscribers by December 2005 and it is expected to cross 26 million by 2006.

BESTWAY TO TAKE OVER MUSTEHKAM CEMENT

The Privatization Commission of Pakistan has privatized state-owned Mustehkam Cement Limited (MCL) and its ownership, management and control is being handed over to the Bestway Group of UK, says an official handout .

The Privatization Commission (PC) had earlier called for bids to privatize the MCL on September 15 and three companies took part in the bidding process.

The Bestway Cement Limited offered the biggest price of more than Rs3.2 billion and subsequently was offered to take over the MCL.

The Bestway later on deposited 25 per cent of the total bidding amount i.e. more than Rs800 million on October 8.

NBP'S RATING

The Moody's Investors Service has upgraded the rating of the National Bank of Pakistan (NBP) amid reports of improved financial strength of the Bank.

According to a press release issued by the NBP, Moody's upgraded the financial strength rating (FSR) of the bank to D- from E+. The rating outlook is stable.

QUAKE TOLL EXCEEDS 87,000: WB

The death toll in earthquake has jumped to 87,350 after a new count of the dead in Pakistan, the World Bank and the Asian Development Bank reported.

According to these reports, Pakistan's official toll jumped by 13,000 - from 73,000 to 86,000 -- and might increase further. India has reported 1,350 deaths in occupied Kashmir.

The increase in death toll followed the discovery of more bodies in Mansehra and Azad Kashmir from the areas previously inaccessible to assessment teams due to landslides.

The report points out that UN workers are still racing to bring shelter to the 350,000 most desperate survivors one month after the disaster.

TALKS FOR SECURING PTCL DEAL RESUME

A Pakistani team led by Minister for Privatization Dr Abdul Hafeez Sheikh has resumed in Dubai negotiations with Etisalat of UAE to complete the $2.6 billion endangered privatization of Pakistan Telecommunication Company Limited (PTCL).

A senior government official said the managing director of Goldman Sachs - Pakistan's financial adviser on PTCL sale - has also joined the negotiations currently going on at different working group levels in the UAE.

SHARE PURCHASE ACCORD SIGNED

Siemens Pakistan has signed an agreement with Privatization Commission (PC) for acquiring 53 per cent shares of Carrier Telephone Industries (CTI) held by Pakistan Telecommunication Company Limited (PTCL).

The share purchase agreement (SPA) was signed by Privatization Commission Secretary M. Tahsin Khan Iqbal, PTCL CEO Junaid Khan and Siemens Pakistan Divisional Director Sheikh Tahir Javed.

The PC offered 53 per cent shares held by PTCL in CTI for sale to a qualified investor as "a going concern" basis with management control, as a part of the privatization process of the telecommunication sector.

LOCAL RICE PRICES STEADY

Pakistani rice prices remained steady over the past week, but dealers said they would ease in the coming days on healthy supply. "The demand from exporters is there, but prices are expected to come down slightly due to the good supplies, which are improving continuously," said a Karachi-based dealer.

Dealers said supplies had picked up in the central Punjab and in the southern Sindh. They expected supply to rise further in the coming weeks.

The dealer said exporters had so far made commitments for around 250,000 tons of rice. "We are expecting a bumper crop this year, and will hopefully export over 1.5 million tons."

Pakistan expects a crop of more than five million tons, against last year's 4.8 million. Annual domestic consumption is about 2.3 million tons.

RS20BN EARMARKED FOR COMPENSATION PAYMENT

The federal government has earmarked Rs20 billion for payment to earthquake victims in the NWFP and Azad Kashmir as an immediate measure to mitigate their sufferings.

The decision was taken at a high-level meeting held here on Monday with President General Pervez Musharraf in the chair. Prime Minister Shaukat Aziz and senior officials involved in relief efforts attended the meeting.

The meeting decided that Rs25,000 would be given for each affected house; Rs100,000 to be paid to families which lost a member or members and Rs25,000 to 50,000 to each injured. A portion of the amount has already been given to the NWFP and Azad Kashmir governments.

ISLAMABAD HOPES TO JOIN APTA

China and five other countries South Korea, India, Bangladesh, Sri Lanka and Laos at their ministerial-level meeting have unanimously decided that the membership and scope of the Bangkok Agreement should be further expanded.

While converting the name of Bangkok agreement as Asia-Pacific Trade Agreement (APTA), they were agreed in principle that other regional countries like Pakistan should also be allowed to work as its active members, promoting intra-regional trade.

BANK BRANCHES

Pakistan and India have agreed to open up banking sector and allowed establishment of two bank branches on reciprocal basis after a gap of 40 years. In this regard an understanding has already been reached between the Reserve Bank of India (RBI) and the State Bank of Pakistan (SBP) on granting permission for opening of bank branches, the SBP announced in a press release.

 
 

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