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

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3 DAYS FORECAST
In oC

CITIES MIN MAX

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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

Nov 28 - Dec 04, 2005

INDUSTRIAL PRODUCTION FALLS SHARPLY

Production in various segments of large-scale industrial sector except for pharmaceuticals and leather fell sharply in the first two months of the current fiscal year giving clear signals that economic growth as well as exports would be affected significantly this year.

Latest official data shows that textile sector, the main foreign exchange earner, posted a growth of just 6.3 per cent compared to 30 per cent during July-August last year.

Production of cotton yarn dropped to 7.1 per cent from 17.4 per cent and cotton cloth fell to 6.5 per cent from 47 per cent during the period under review. These two items fetch $3 billion as export proceeds for the country.

Food and beverages growth rate of production fell to 9 per cent compared to 16.8 per cent in the corresponding period last year. Wheat milling dropped 3.8 per cent from 21.1 per cent and cooking oil production growth was just 7.1 per cent compared to 42.1 per cent during the corresponding period of last year.

Production of chemicals, which is a sign of industrial activities, grew at the rate of 5.9 per cent compared to 16 per cent in the same period last year. The country achieved the 8.4 per cent GDP growth last year and chemical usage was on much higher side.

Metal industries went under reverse gear as its growth fell by (minus) 62pc from an increase of 4.7 per cent during the last two months of the previous year. Pig iron and billets, which are used for infrastructure development and housing and construction, fell sharply during the period.

Fertilizer production also showed poor performance as the growth remained at 15pc while it was 97.3 per cent during the two months of last year reflecting the agriculture sector's slow growth in the coming months. The cotton crop alone valued at over Rs140 billion (100,000 bales equal to Rs1 billion).

The booming automobile, which played key role in boosting the large-scale manufacturing sector last year, showed a growth of 29 per cent compared to 51 per cent the same period last year.

Output of tyre and tubes dropped from 17.7 per cent to 13.3 per cent and electronics from 84.5 per cent to 6 per cent during the period.

Only the pharmaceutical sector grew by 14.9 per cent from negative 1.4 per cent and the leather products rose to 14.5 per cent from negative 9.1 per cent during the said period.

PAKISTAN PURCHASES 0.650M TONS WHEAT

Pakistani traders are expected to import more wheat with deals totalling 200,000 tons expected for January-February shipment, traders and a government official were quoted as saying.

Traders have already finalized import deals for 650,000 tons of milling wheat, after a duty cut this year, and cargoes of 300,000 tons had reached Pakistan up to Nov 15.

But Qadir Bux Baluch, Pakistan's wheat commissioner, said traders were likely to buy more to meet growing need in Karachi.

"Most of the previous imports were for Karachi and Sindh which still needed extra supplies of maybe another 200,000 tons or so," Mr Baluch said. "Traders are continuously in the market at the moment."

Karachi-based traders said supplies of locally produced wheat for the city of more than 15 million people were slow after bad weather trimmed last year's crop and also damaged its quality.

Pakistan's wheat output fell to 21.5 million tons from a target of 22.5 million after rain in March and wind in May damaged crops in central Punjab, which produces 80 per cent of the country's wheat.

The cost of trucking wheat from Punjab is also reflected in higher prices in Karachi.

Muhammad Najib Balagamwalla, chief executive of Pakistan-based Seatrade Group, said the poor quality of government wheat was the main reason behind a surge in imports for the city.

"The government is offering 30 per cent damaged wheat grain but prices are as high as high-quality Australian wheat," Mr Balagamwalla said.

"The landing costs of imported wheat are comparatively cheap in Karachi so millers and traders are aggressively booking cargoes from abroad," he added.

RS250BN FLOW FOR RECONSTRUCTION TO BOOST ECONOMY

President General Pervez Musharraf has said that the funds pledged at the donors' conference would be used for bolstering the quality of life as the government did not only want to restore the devastated infrastructure, but to pursue a need-based strategy.

Addressing a ceremony marking the launch of the National Volunteers Movement, the president said that the injection of a hefty Rs250 billion into reconstruction work would help bolster economic activity in the country.

He announced Rs150,000 each for rebuilding over 400,000 houses destroyed by the quake.

"This will surely be helpful in mitigating the sufferings of people in the 28,000sq-km mountainous region of NWFP and Azad Jammu and Kashmir."

He said that under the owner-based strategy for reconstruction of houses the government would extend an additional Rs25,000 to people aimed at raising houses in conformity with standards of quake-proof structures.

AUSTRALIA PLEDGES ADDITIONAL $37M

Australian Prime Minister John Howard has assured his country's full support for the reconstruction and rehabilitation efforts as he announced an additional US$37 million for quake victims.

Mr Howard announced this while visiting quake-stricken Dhanni village, some 50km along the Neelum Valley Road. He played cricket with children living there in a makeshift relief camp for quite some time, besides visiting a field hospital run by a 96-member team.

Appreciating the services being rendered by Australia's medical team, he said they were boosting the morale of locals.

"I am pleased to announce that Australia will provide a further 50 million (Australian) dollars (US$37 million) for victims of the disastrous October 8 earthquake in Pakistan, to provide relief for the winter and for reconstruction in the longer term," he told reporters. Australia has already donated US$10.4 million.

PAKISTAN SEEKS GREATER ACCESS FROM EU

Pakistan has sought greater market access from the European Union, the United States and other major Western countries for its exports to offset negative impact of the October 8 earthquake on its overall economy and growth momentum, said a newspaper report.

President Gen Pervez Musharraf and Prime Minister Shaukat Aziz have personally taken up this issue with a number of countries as part of their recent campaign for securing maximum economic concessions and financial help for reconstruction and rehabilitation effort.

Most of the EU members have shown willingness to treat Pakistan on a par with Sri Lanka, the report said. Pakistan had requested the EU to provide those special concessions under the new generalized system of preferences to be effective from January 1, 2006 which they have committed to Sri Lanka in the aftermath of tsunami.

$37.3M ADB LOAN FOR HYDROPOWER PROJECT

The Asian Development Bank (ADB) will help to bridge a pending electricity shortfall and encourage the development of hydropower resources in Pakistan through a new $ 37.3 million loan.

The loan will help finance an approximately 80 megawatt power plant located downstream of the Mangla Dam on the Jhelum River in Azad Kashmir.

This is ADB's first proposed assistance to a private sector hydropower project in Pakistan and the first such project to be developed in the region.

The New Bong Escape Project, so called because of its position on the escape channel from the existing Mangla power station, will be a "run-of-the-river" scheme involving no new dam or reservoir and will thus have minimal environmental and social impacts.

The electric power generated by the project will feed into the national grid, according to an ADB news release.

RETURN ON 6-MONTH T-BILLS RAISED

The State Bank raised the cut-off yield on benchmark six-month treasury bills, signalling an interest rates hike in future.

The SBP held an auction of T-bills and picked up Rs61.945 billion, much less than the target of Rs90 billion. A significant change was the rise in the six-month T-bills cut-off yield which was pushed up by 15 basis points.

However, the SBP picked up the minimum amount, just Rs768 million, for six months at the rate of 8.3910 per cent. The highest amount of Rs53.102 billion was collected for 12-month T-bills at a cut-off yield of 8.7907 per cent. The central bank raised Rs3.337 billion for three-month T-bills at a cut-off yield of 8.1 per cent.

The SBP had set a target of Rs90 billion for the T-bills auction but remained far behind despite huge inflows of Rs90 billion scheduled for the same day.

US TEXTILE BUYER HINTS AT DOUBLING PURCHASES

A leading US textile buyer, Steve and Barry, which runs 98 stores, has hinted at doubling purchases from Pakistan from $50 million to $100 million.

This was stated by Jitendra Bhatia, manager, sourcing and vendor development, while speaking to members of the Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) recently.

Mr Bhatia said his firm was keen to buy jeans, jackets and sportswear from Pakistan for sale to university students who were its major customers. He said the firm had shifted its offices to India to save working cost and had appointed agents in Pakistan.

POULTRY IMPORT FROM SEVEN COUNTRIES BANNED

Pakistan has imposed a ban on import of poultry products from seven more countries as a precautionary measure against any outbreak of avian flu in the country.

The decision was made public through a notification issued here by commerce ministry by amending the Imports and Exports (Control) Act, 1950 .

According to the notification, import of poultry and poultry products and captive live birds have been banned from South Korea, Japan, Myanmar, Taiwan, Hong Kong, Malaysia, South Africa and Greece.

A number of other countries from where import were banned earlier include Vietnam, Thailand, Indonesia, Cambodia, Laos, Malaysia, Russia, Kazakhstan, Mongolia, Turkey, Romania and China on account of Avian Influenza H5N1 strain.

SIEMENS' PROFIT RISES

Siemens Pakistan reported a profit of Rs779 million during the year 2005 ending September 30, showing a rise of 89 per cent over the last 2004. Basic earning per share rose to Rs100.24 compared to Rs53.10 a year earlier.

EIGHT PARTIES PRE-QUALIFY FOR PS BID

The Privatization Commission Board has pre-qualified eight parties for the sale of Pakistan Steel. The board, which met under the chairmanship of Privatization and Investment Minister Dr Abdul Hafeez Sheikh, pre-qualified eight parties for entering into the data room for due diligence of Pakistan Steel Mills Corporation (PSMC), while three parties were conditionally pre-qualified subject to the formalities of additional information by them.

The meeting was informed that the successful bidder for KESC - the consortium of Hasan Associates led by the Al-Jumaih Group of Saudi Arabia - had deposited $100 million out of the total bid offer of Rs20.24 billion and a letter of acceptance had been issued to them, while the remaining proceeds would be received by the end of the current month, followed by handing over the management control of the company to the consortium.

BD OFFERS INCENTIVES TO CAPTURE MARKETS

After achieving $6 billion in garments and made-up exports, Bangladesh is now entering home textiles in a big way by allowing duty-free import of plant and machinery as well as raw material, including raw cotton and accessories.

Pakistan, which has been enjoying an edge in home textiles the world over, will be the first victim of this development because Bangladesh besides having its internal advantages is also categorized as Least Developed Country (LDC) that allows it to have duty-free access to the EU and US markets.

Against this Pakistan is presently paying 13.1 per cent punitive duty on its exports of bedlinen to European Union (EU) plus 12 per cent customs duty, thereby taking a net impact of over 25 per cent.

GOLD PRICE HITS NEW PEAK

The rising trend of bullion rate on international markets continues to exert pressure on the domestic prices at a time when marriage season is at its full swing. Gold rates on Tuesday surged to Rs9,635 per 10 grams from Rs9,515 a day earlier.

Gold price was Rs9,085 per 10 grams on November 11, 2005. In the last 12 days, gold became costlier by Rs550. The 10 tola gold bar now costs Rs112,620.

 
 

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