Pages: 7 proft.com.pk Friday, 13 January, 2012 Prospects of the Islamic banking industry Page 4-5 Two pronged European predicament Page 3 Provincial burden to rise by Rs75b Page 7 T he rupee has been on steady de- cline since the past two months, with the exception of the past two days. Most are quite aware of the wors- ening balance of trade position with ex- ports for 1h-FY12 arriving at $11.24 billion and imports standing at $22.71 billion. Remittances, which were the na- tion’s pride for keeping the economy out of red, have this time failed to buttress the struggling current account despite registering an unprecedented level over $6 billion during the last six months. in the face inelastic imports, exports have seemed to be the only maneuver- able saving grace. however, the general opinion regarding power shortages caus- ing supply deficits, especially with refer- ence to the textile sector, is also a favourite example and ostensibly a sig- nificant impediment. it takes the sector only one year of glory for the SBP and other policy makers to start reveling in the idea of its permanence and glorify the fact that the fiscal imbalance did not affect the external account in the days of cotton gains and surpluses. Reflecting on other interesting cor- relative developments in the last two months, KiBOR in excess of 12 per cent, ie higher than the discount rate signals impending liquidity constraints in the banking system. The last two T-Bill auc- tions have also been witness to the low participation levels, extremely unlike the preceding fiscal year, and bid patterns that showed quotation of high rates that led to complete rejection of the earlier bid in Dec-11. Theoretically this would also imply that banks are either short of funds or unwilling to lend to anyone given that the private sector credit has not ventured further than the Rs3.1-3.2 trillion from the end of FY11, and short-term govern- ment bonds seem to hold no spark lately. This implies that the shortage of funds is reflecting itself on the currency as higher interbank exchange rates are being quoted, resulting in the ongoing depre- ciative phase for the rupee. Delving into the investigation of the first hypothesis, it seems that banks are most definitely not short of funds. A lat- est report on liquidity held in excess of the CRR shows, that in the later week of Dec-11 when KiBOR hit the12 per cent high, banks on average held around Rs10 billion/day (Rs70 billion/wk) in excess of the CRR. Similarly, an OMO con- ducted over the last two days extracted liquidity worth Rs41 billion. Why would SBP further squeeze liquidity if the mar- ket was already short? On the other hand, the ‘unwilling- ness’ hypothesis may very well hold some truth. During the first half of FY12, the SBP has lent an incremental Rs151 billion (versus Rs80 billion dur- ing 1h-FY11) and scheduled banks have lent Rs668 billion (versus Rs206 billion) to the government for budget- ary borrowing. This coupled with a de- cline in Net Foreign Assets of Rs130 billion during the 1hFY12 (Rs127 bil- lion increase during 1hFY11) is pre- sumably rendering a double whammy on the exchange rate. Simple arith- metic would reveal that banks have an incremental hold up of around Rs662 billion, explaining their reservations about money lending and raising the price of the rupee. On the darker predictive side, the rupee can be expected to go even further down as the date of iMF payment ap- proaches. And touching base with the well known exports and power deficit connection, the slow growth in external receipts can be expected to continue as no resolution of the power and gas sup- ply issue seems to be approaching. Since this is the land of the impure, the rent seeker and the opportunist, i would suggest lets all speculate and thrive! Cheers!! The weakening currency dilemma SITUATIONER SAkINA HuSAIN FBR collects Rs846b revenue in 1H2011-12 LAHORE IMRAN ADNAN F eDeRAl Board of Revenue (FBR) has collected revenue of Rs846 billion during the first six months of the current fiscal 2011-12 (July-December). FBR also witnessed an increase of over 34 per cent or Rs216 billion during the same period of previous year. Figures show that lahore large Taxpayers Unit (lTU) has witnessed an increase of Rs17 billion or 25 per cent in the first six months of the fiscal 2011-12. lahore lTU has collected revenue of Rs53.5 billion during the first half of the current fiscal, whereas, Rs36.5 billion revenue was collected during the corresponding period of last year. Breakup shows that on account of income Tax, lahore lTU has collected Rs12.3 billion in the first half of the current fiscal, while revenue of Rs8.6 billion was collected during the corresponding period of previous year. in General Sales Tax (GST), revenue receipts of lahore lTU has witnessed Rs33.7 billion during the period under review, which showed Rs13.1 billion increase from last fiscal figures. Similarly, on account of Federal excise Duty (FeD), revenue collection has stood at Rs7.5 billion, which showed an increase of Rs0.2 billion from fiscal 2010-11. FBR’s lahore lTU Director General Mustafa Ashraf indicated that despite economic depression and energy crisis, revenue collections had witnessed substantial increase, which showed tax machinery’s efforts to increase tax revenues. he said FBR had initiated an aggressive revenue generation and collection campaign from the start of the current fiscal, considering the overall depressed economic situation in the country. he pointed out lahore lTU had also recovered some Rs1 billion arrears, stuck up in appeals and other cases. in addition, lahore lTU had created a demand for Rs2.5 billion additional revenue collections, during the period under review, he maintained. Ashraf underscored that increase in revenue collection was result of better monitoring and extra efforts of the tax machinery. lahore lTU had ensured timely tax collection from withholdings agents and followed FBR’s Broadening Tax Base (BTB) programme through which a good number of new taxpayers were added to the tax base. WAPDA lashes out at govt’s rudderless power sector reforms ISLAMABAD AMER SIAL W hile strongly criti- cising the power sec- tor reforms that are under implementa- tion, Water and Power Development Authority (WAPDA) has demanded improvement in governance in distribution companies (DiSCOs). WAPDA has also called for enhancing accountability in lieu of in- creasing the already towering power tar- iff as the revenue gap could be filled through improving their efficiencies, says the entity’s presentation on the en- ergy issues for the National Assembly Special Committee on energy crisis. PRESENTING TNT The presentation could not be made on Wednesday, as the members were not interested in listening to usual pre- sentations. The presentation contains fireworks that could have ignited the committee into grilling the Ministry of Water and Power (MOWP) on its poor planning and implementation on the power sector reforms which is holding the economy hostage. ROLE REASSIGNMENT Demanding reassignment of the role of integrated power planning, develop- ment and transmission to WAPDA as it has mandate under the WAPDA Act, to prepare centralised plans for develop- ment of power in hydel, thermal and re- newable energy resources including those dealing with transmission lines. PePCO should not be saddled with the responsibility of establishing new ther- mal power plants in the public sector as it neither has the mandate nor the plan- ning and implementing departments to undertake these activities. RESTRUCTURING AND DECLINE Government had started the re- structuring of WAPDA, in early 1990s, with the vision that the break-up of its various departments and decentralisa- tion will make management more ef- fective however it has not materialised. WAPDA’s Power Wing was replaced by PePCO, whose top management exercised the same cen- tralized control over DiSCOs. Criticising the boards of directors of DiSCOs, it says they have failed to con- tribute significantly to the improvement and functioning of these companies. The quality and effectiveness of some of its key departments have deteriorated alarmingly. The Power Planning depart- ment, under NTDC, is a particularly ex- ample of decline in standards. CPPA has not become fully functional despite the lapse of a significant period since its in- ception. The operational and financial sustainability of PePCO appears to be seriously threatened unless immediate remedial measures are taken. LACK OF VISION On the circular debt, it says even though it has been cleared many times during last four years, it reemerges as PePCO’s monthly revenues fall, short of its expenditures by Rs20 billion per month. This is unsustainable and the ex- isting revenue gap is solely because of the mismanagement and flawed imple- mentation of the reform program. Criti- cising the government on its lack of vision, it says by picking up bank loans for revenue gap of Rs300 billion, the government paid tariff differential sub- sidies of Rs470 billion since 2007 to PePCO. Despite passing on fuel price impact by making almost 100 per cent tariff increase, the gap between revenue and the cost is still not narrowed. GROSS MISMANAGEMENT illustrating the gross mismanage- ment in generation companies (GeN- COs), it says, due to poor maintenance, they were producing almost six billion less units per annum than their opti- mum level. GeNCOs are burning more fuel worth Rs11 billion per annum more than normal efficiency level. NTDC is losing power worth Rs6 billion per annum in transmissions because of losses more than the normal standards. heSCO, PeSCO, QeSCO and MePCO compositely are losing power worth Rs90 billion per annum in the distribu- tion system. These DiSCOs are also not recovering revenue of almost Rs 90 bil- lion in a year. These are the real reasons of existing circular debt which has paral- ysed the national economy and has made the life difficult of a common man. RECOMMENDATIONS it recommends, the MOWP must recognise that PePCO is a transitory entity meant to prepare DiSCOs and GeNCOs for privatisation. They should facilitate PePCO for its strategic objectives only. Day to day management of company’s business affairs should not be a ministerial concern. For im- proving DiSCOs performance, it asks for taking provincial government boards so that they are administratively involved in controlling line losses and to improve rev- enue recovery from consumers. To ensure better collection and delivery of services, the selected inefficient feeders of DiSCOs should be leased out. Differential tariff must be implemented without taking into account the administrative losses and poor revenue recovery. The basic issue of most of the DiSCOs is poor governance and lim- ited accountability. There should be no po- litical and administrative interference in DiSCOs. GeNCOs must be leased out. PePCO has deviated from its given role, therefore must be rolled back to avoid fur- ther deterioration of performance of ex- WAPDA entities. The available energy must be consumed prudently and its industrial consumption should be preferred. g HESCO, PESCO, QESCO and MEPCO not recovering Rs90 billion per annum g Wapda demands reassigning role for integrated power planning, development and transmission g GENCOs burning more fuel worth Rs11b per annum PRO_Layout 1 1/13/2012 6:49 AM Page 1
Transcript
Pages: 7 profit.com.pk Friday, 13 January, 2012
Prospects of the Islamicbanking industry Page 4-5
Two pronged Europeanpredicament Page 3Provincialburden to rise byRs75b Page 7
T he rupee has been on steady de-cline since the past two months,with the exception of the past two
days. Most are quite aware of the wors-ening balance of trade position with ex-ports for 1h-FY12 arriving at $11.24billion and imports standing at $22.71billion. Remittances, which were the na-tion’s pride for keeping the economy outof red, have this time failed to buttressthe struggling current account despiteregistering an unprecedented level over$6 billion during the last six months.
in the face inelastic imports, exportshave seemed to be the only maneuver-able saving grace. however, the general
opinion regarding power shortages caus-ing supply deficits, especially with refer-ence to the textile sector, is also afavourite example and ostensibly a sig-nificant impediment. it takes the sectoronly one year of glory for the SBP andother policy makers to start reveling inthe idea of its permanence and glorifythe fact that the fiscal imbalance did notaffect the external account in the days ofcotton gains and surpluses.
Reflecting on other interesting cor-relative developments in the last twomonths, KiBOR in excess of 12 per cent,ie higher than the discount rate signalsimpending liquidity constraints in thebanking system. The last two T-Bill auc-tions have also been witness to the lowparticipation levels, extremely unlike thepreceding fiscal year, and bid patterns
that showed quotation of high rates thatled to complete rejection of the earlierbid in Dec-11.
Theoretically this would also implythat banks are either short of funds orunwilling to lend to anyone given thatthe private sector credit has not venturedfurther than the Rs3.1-3.2 trillion fromthe end of FY11, and short-term govern-ment bonds seem to hold no spark lately.This implies that the shortage of funds isreflecting itself on the currency as higherinterbank exchange rates are beingquoted, resulting in the ongoing depre-ciative phase for the rupee.
Delving into the investigation of thefirst hypothesis, it seems that banks aremost definitely not short of funds. A lat-est report on liquidity held in excess ofthe CRR shows, that in the later week of
Dec-11 when KiBOR hit the12 per centhigh, banks on average held around Rs10billion/day (Rs70 billion/wk) in excessof the CRR. Similarly, an OMO con-ducted over the last two days extractedliquidity worth Rs41 billion. Why wouldSBP further squeeze liquidity if the mar-ket was already short?
On the other hand, the ‘unwilling-ness’ hypothesis may very well holdsome truth. During the first half ofFY12, the SBP has lent an incrementalRs151 billion (versus Rs80 billion dur-ing 1h-FY11) and scheduled bankshave lent Rs668 billion (versus Rs206billion) to the government for budget-ary borrowing. This coupled with a de-cline in Net Foreign Assets of Rs130billion during the 1hFY12 (Rs127 bil-lion increase during 1hFY11) is pre-
sumably rendering a double whammyon the exchange rate. Simple arith-metic would reveal that banks have anincremental hold up of around Rs662billion, explaining their reservationsabout money lending and raising theprice of the rupee.
On the darker predictive side, therupee can be expected to go even furtherdown as the date of iMF payment ap-proaches. And touching base with thewell known exports and power deficitconnection, the slow growth in externalreceipts can be expected to continue asno resolution of the power and gas sup-ply issue seems to be approaching.
Since this is the land of the impure,the rent seeker and the opportunist, iwould suggest lets all speculate andthrive! Cheers!!
The weakening currency dilemmaSITUATIONERSAkINA HuSAIN
FBR collects Rs846brevenue in 1H2011-12
LAHORE
IMRAN ADNAN
FeDeRAl Board of Revenue(FBR) has collected revenue ofRs846 billion during the first six
months of the current fiscal 2011-12(July-December). FBR also witnessedan increase of over 34 per cent or Rs216billion during the same period ofprevious year. Figures show that lahorelarge Taxpayers Unit (lTU) haswitnessed an increase of Rs17 billion or25 per cent in the first six months of thefiscal 2011-12. lahore lTU has collectedrevenue of Rs53.5 billion during thefirst half of the current fiscal, whereas,Rs36.5 billion revenue was collectedduring the corresponding period of lastyear. Breakup shows that on account ofincome Tax, lahore lTU has collectedRs12.3 billion in the first half of thecurrent fiscal, while revenue of Rs8.6billion was collected during thecorresponding period of previous year.in General Sales Tax (GST), revenuereceipts of lahore lTU has witnessedRs33.7 billion during the period underreview, which showed Rs13.1 billionincrease from last fiscal figures.Similarly, on account of Federal exciseDuty (FeD), revenue collection hasstood at Rs7.5 billion, which showed anincrease of Rs0.2 billion from fiscal2010-11. FBR’s lahore lTU DirectorGeneral Mustafa Ashraf indicated thatdespite economic depression andenergy crisis, revenue collections hadwitnessed substantial increase, whichshowed tax machinery’s efforts toincrease tax revenues. he said FBR hadinitiated an aggressive revenuegeneration and collection campaignfrom the start of the current fiscal,considering the overall depressedeconomic situation in the country. hepointed out lahore lTU had alsorecovered some Rs1 billion arrears,stuck up in appeals and other cases. inaddition, lahore lTU had created ademand for Rs2.5 billion additionalrevenue collections, during the periodunder review, he maintained. Ashrafunderscored that increase in revenuecollection was result of bettermonitoring and extra efforts of the taxmachinery. lahore lTU had ensuredtimely tax collection from withholdingsagents and followed FBR’s BroadeningTax Base (BTB) programme throughwhich a good number of new taxpayerswere added to the tax base.
WAPDA lashes out at govt’srudderless power sector reforms
ISLAMABAD
AMER SIAL
While strongly criti-cising the power sec-tor reforms that areunder implementa-tion, Water and
Power Development Authority(WAPDA) has demanded improvementin governance in distribution companies(DiSCOs). WAPDA has also called forenhancing accountability in lieu of in-creasing the already towering power tar-iff as the revenue gap could be filledthrough improving their efficiencies,says the entity’s presentation on the en-ergy issues for the National AssemblySpecial Committee on energy crisis.
PRESENTING TNT
The presentation could not be madeon Wednesday, as the members werenot interested in listening to usual pre-sentations. The presentation containsfireworks that could have ignited thecommittee into grilling the Ministry ofWater and Power (MOWP) on its poorplanning and implementation on thepower sector reforms which is holdingthe economy hostage.
ROLE REASSIGNMENT
Demanding reassignment of the roleof integrated power planning, develop-ment and transmission to WAPDA as ithas mandate under the WAPDA Act, toprepare centralised plans for develop-ment of power in hydel, thermal and re-newable energy resources includingthose dealing with transmission lines.PePCO should not be saddled with theresponsibility of establishing new ther-
mal power plants in the public sector asit neither has the mandate nor the plan-ning and implementing departments toundertake these activities.
RESTRUCTURING AND DECLINE
Government had started the re-structuring of WAPDA, in early 1990s,with the vision that the break-up of itsvarious departments and decentralisa-tion will make management more ef-fective however it has notmaterialised. WAPDA’s Power Wingwas replaced by PePCO, whose topmanagement exercised the same cen-tralized control over DiSCOs.
Criticising the boards of directors ofDiSCOs, it says they have failed to con-tribute significantly to the improvementand functioning of these companies. Thequality and effectiveness of some of itskey departments have deterioratedalarmingly. The Power Planning depart-ment, under NTDC, is a particularly ex-ample of decline in standards. CPPA hasnot become fully functional despite thelapse of a significant period since its in-ception. The operational and financialsustainability of PePCO appears to beseriously threatened unless immediateremedial measures are taken.
LACK OF VISION
On the circular debt, it says eventhough it has been cleared many timesduring last four years, it reemerges asPePCO’s monthly revenues fall, short ofits expenditures by Rs20 billion permonth. This is unsustainable and the ex-isting revenue gap is solely because ofthe mismanagement and flawed imple-mentation of the reform program. Criti-cising the government on its lack of
vision, it says by picking up bank loansfor revenue gap of Rs300 billion, thegovernment paid tariff differential sub-sidies of Rs470 billion since 2007 toPePCO. Despite passing on fuel priceimpact by making almost 100 per centtariff increase, the gap between revenueand the cost is still not narrowed.
GROSS MISMANAGEMENT
illustrating the gross mismanage-ment in generation companies (GeN-COs), it says, due to poor maintenance,they were producing almost six billionless units per annum than their opti-mum level. GeNCOs are burning morefuel worth Rs11 billion per annum morethan normal efficiency level. NTDC islosing power worth Rs6 billion perannum in transmissions because oflosses more than the normal standards.heSCO, PeSCO, QeSCO and MePCOcompositely are losing power worthRs90 billion per annum in the distribu-tion system. These DiSCOs are also notrecovering revenue of almost Rs 90 bil-lion in a year. These are the real reasonsof existing circular debt which has paral-ysed the national economy and hasmade the life difficult of a common man.
RECOMMENDATIONS
it recommends, the MOWP mustrecognise that PePCO is a transitory entitymeant to prepare DiSCOs and GeNCOs forprivatisation. They should facilitate PePCOfor its strategic objectives only. Day to daymanagement of company’s business affairsshould not be a ministerial concern. For im-proving DiSCOs performance, it asks fortaking provincial government boards sothat they are administratively involved incontrolling line losses and to improve rev-enue recovery from consumers. To ensurebetter collection and delivery of services,the selected inefficient feeders of DiSCOsshould be leased out. Differential tariffmust be implemented without taking intoaccount the administrative losses and poorrevenue recovery. The basic issue of mostof the DiSCOs is poor governance and lim-ited accountability. There should be no po-litical and administrative interference inDiSCOs. GeNCOs must be leased out.PePCO has deviated from its given role,therefore must be rolled back to avoid fur-ther deterioration of performance of ex-WAPDA entities. The available energy mustbe consumed prudently and its industrialconsumption should be preferred.
g HESCO, PESCO, QESCO and MEPCOnot recovering Rs90 billion per annum
g Wapda demands reassigning role for integratedpower planning, development and transmission
ISLAMABAD: Pakistan Telecommunication Companylimited (PTCl) has inaugurated a revamped andremodeled PTCl islamabad F-7/2 One Stop Shop (OSS),as part of its new “Customer First” campaign, whichfocuses on building an enhanced customer careexperience. The inauguration ceremony was attended byPTCl’s senior executives as well as the OSS staff. “AtPTCl, our customers always come first,” said Seniorexecutive Vice President Commercial, Naveed Saeed,while addressing the inauguration ceremony. PRESS RELEASE
LG’s new Magic RemoteControl adds innovative functions LAHORE: lG electronics (lG) unveiled a new remotecontrol for its CiNeMA 3D Smart TVs, the magic remote.The new remote control maximises user convenience witha new set of additional functions, namely voicerecognition, wheel, magic gesture and pointing. “lG hasbeen striving to constantly improve the comfort andconvenience with which our customers use the CiNeMA3D Smart TVs,” said havis Kwon, President and CeO oflG home entertainment Company. PRESS RELEASE
LAHORE: Picture shows winners and participants of JazzInami Hungama held in Islamabad. PRESS RELEASE
LAHORE: Pictures shows CEO Zahid Hussain Zafar Abbas, Naveedand Tony at LH Borjan shoes outlet opening. PRESS RELEASE
kARACHI: Mr Ali A Jamali, senior GM marketing divisionexchanging agreement with Mr Irfan Qureshi, head of carfinancing, Bank Alfalah. PRESS RELEASE
kARACHI: Mr Ahmed Shuja kidwai (COO of Al Baraka Bank)with Mr Ayub Butt (CEO of ZRG). Mr Shafqaat Ahmed, CEO of AlBaraka Bank can also been seen the picture. PRESS RELEASE
kARACHI: Ms Talat Rahim, Secretary General English Speakingunion of Pakistan, hosted a lunch at her residence in honour ofBarrister Shahida Jamil, President English Speaking union ofPakistan. Picture shows Begum Tehmina Habibullah, withhostess and chief guest. PRESS RELEASE
SMEDA urges internationaldonors to extend cooperation
LAHORE
STAFF REPORT
SMAll and Medium enter-prises Development Author-ity (SMeDA) has urged the
international donor organisationsto extend their cooperation in im-plementation of SMe facilitationprojects to be developed by SMeDA.
Khurram Khan, General ManagerCentral Support SMeDA, at a meetingwith a delegation of Assessment andStrengthening Programme (ASP), ob-served that Pakistan’s SMe sector re-
quired broad-based intervention forgrowth, which had not been possibleby SMeDA in the full swing due toscarcity of funds. The funding gap canbe bridged with assistance of interna-tional and local donor organisations.he informed that three important pro-grammes had recently been launchedby SMeDA by the funding of interna-tional donor agencies, that include“early Recovery and Restoration ofFlood Affected Communities Pro-gramme” and” legal empowermentProgramme for Marginalised Busi-nesses in Pakistan” funded by UNDP
and “economic Revival of KP andFATA” project funded by World Bank.GM SMeDA observed that there was ahuge demand in the private sector forcapacity building and training needs.he called upon ASP to persuade thedonor agencies for joining hands withSMeDA to fill this gap in Pakistan.
earlier, in a presentation re-garding SMeDA, ASP delegationwas informed that there were 26 ap-proved PSDP projects for Rs3. 2 bil-lion under implementation as thecommon facility centres for SMesacross the country.
iqbal Ahmad Raja, ProvincialDirector ASP, while exchanging hisviews regarding SMeDA’s contribu-tions towards SMe development,said SMeDA was amongst a fewgovernment institutions which hada very good reputation among inter-national donor agencies. he assuredof his fullest cooperation to bringASP related donor agencies onboard with SMeDA for co-develop-ing SMe facilitation projects, espe-cially in capacity building andtraining areas.
Azerbaijan has marketfor Pakistani rice and fruits
KARACHI
STAFF REPORT
AzeRBAiJAN has ahuge demand for Pak-istani agriculturalproducts especially,Basmati rice and
fruits, including mango, dates andothers. The two countries also havea potential of joint ventures in phar-maceutical and manufacturing ofsurgical goods.
This was said by ambassador ofAzerbaijan in Pakistan DashginShikarov in a meeting with officebearers of Karachi Chamber ofCommerce and industry (KCCi) atKCCi head office on Thursday.
he informed President Asif Alizardari’s visit to Azerbaijan was ex-pected shortly and during his visitPakistan-Azerbaijan BusinessForum will be established.
he further stated in the JointMinisterial Session held in Decem-ber 2011 that both sides have de-cided to enhance economic relationsat par to the political relations. Ac-cording to the ambassador, Azerbai-jani visa regime is strict forcountries worldwide, however, forthe citizens of Pakistan and Turkey,the visa policy is open.
Pakistan and Azerbaijan aretwo Muslim brother countries,having profound love and regardfor each other. he said Pakistanafter Turkey was the second coun-try to recognise Azerbaijan. Pak-istan supports Azerbaijan on thedispute of Armenia and likewise,Azerbaijan supports Pakistan onthe dispute of Kashmir.
he said Karachi Chamber’s rec-ommendation will be treated as ad-equate requirement for issuance ofbusiness visas. he invited President
KCCi to take a business delegationto Azerbaijan and informed aboutthe possibility of investment in oiland gas exploration sector and elec-tricity export to Pakistan.
The ambassador informed Pak-istan can export its value-addedagricultural products to Azerbaijanlike, mangoes, dates, fruits, sportsand surgical goods. he said Azerbai-jan has a liberal investment policyand Pakistani can invest there.Azerbaijan also has a strong indus-trial base and textile industry.
Talking to the ambassador,President KCCi Mian Abrar Ahmadurged the Azerbaijani investors toinvest in oil and gas exploration sec-tor in Pakistan and highlighted thepossibilities of trade in agriculturalvalue-added products. he was of theview that economic relations be-tween Central Asian Republics andSAARC countries will be a win-win
situation and bring economic revo-lution in the region. Azerbaijanwhile taking advantage of the geo-strategic relations of Pakistan, canexport their consignments viaGwadar and other ports of Karachito SAARC, ASeAN and GCC coun-tries. he opined the Western coun-tries never liked the idea to developGawadar port for the progress andprosperity of Pakistan.
According to Abrar, with the ef-forts of KCCi, Pakistan-AfghanistanJoint Chamber is formed and effortsare underway to establish Bombay-Karachi Joint Chamber. he alsoproposed the ambassador about thesimilar cooperation with KCCi’sAzerbaijani counterpart. he also re-quested the ambassador to inviteexhibitors to participate in KarachiChamber’s My-Karachi Oasis ofharmony exhibition, scheduled tobe organised in July 2012.
Industrial stakeholdersmull over energy crisisLAHORE: industrial stakeholdersare all set to suggest a way forwardon energy crisis to the governmentwhich is to be finalised at thetaskforce meeting at APTMAPunjab office today. it may benoted that Prime Minister YusufRaza Gilani had desired fromGohar ejaz last Saturday, to advisethe federal cabinet on ways toovercome the energy crisis; afterconsulting the stakeholders of theindustry. Accordingly, a specialtaskforce on energy has been setup under the leadership of Goharejaz and represented by theindustrial stakeholders fromchemicals, fertiliser and powersectors. This taskforce woulddevise a roadmap to address theenergy shortage faced by theindustrial sector. Prime ministerhas desired finalisation ofrecommendations from thetaskforce within six days. Thetaskforce would recommend a wayforward to overcome the gasshortage of up to 1,000 MMCFD,during winter and 500 MMCFD,during summer on SNGPlnetwork to keep industry wheelrunning throughout the year.Representatives from industrialstakeholders would finaliserecommendations onuninterrupted gas supply toindustry, fertiliser and powersectors. STAFF REPORT
Dr Ismail becomesPBIT’s new chairmanLAHORE: Government of Punjabhas appointed Dr Miftah ismail asthe new Vice Chairman of PunjabBoard of investment and Trade(PBiT). Dr ismail has a PhD inPublic Finance and Politicaleconomy from Wharton School,University of Pennsylvania. he haspreviously worked at the iMF inWashington, DC and is anindustrialist whose businessinterests include confectionery,biscuits, plastics and financialservices. he aims to be a bridgebetween the business communityand government, trying to encourageand facilitate local and foreignbusinesses to invest in Punjab. At hisappointment Dr ismail said Punjaboffers some of the most lucrative andlow- risk opportunities for investorsin Asia, especially in the fields ofenergy, agriculture, livestock anddairy, mines and minerals, andtourism. “i am, therefore, lookingforward to working with theprofessional and enthusiastic teamat PBiT to deliver the Chief MinisterShabaz Sharif’s vision,” he added.PBiT has been functioning as aninvestment promotion agency of thePunjab government since 2009 andhas had many successes during ashort tenure. it was previously led bytwo very dynamic private sectorprofessionals, Rizwanullah Khanand before him, Pir SaadAhsanuddin. STAFF REPORT
Fisheries departmentholds training courseLAHORE: Fisheries Researchand Training institute, FisheriesDepartment Punjab is holding athree day training course for fishfarmers on “Prosperity throughFish Farming” from 16th to 18th ofJanuary, 2012. The objective ofthis training is to provide essentialmodern scientific techniquesabout aquaculture and fishfarming to farmers and to informthem about soil and waterconditions. This training course isbeing touted as going a long wayin increasing the knowledge of thefish farmers. The scientifictechniques that would be divulgedin the course are in synchronywith modern day techniques, andhence, the farmers would be ableto enhance their farmingtechniques via this programme. itis an ideal opportunity for them tolearn the various methodologies inmaking fish farming a prosperousexercise.The interested personsmay contact the office of directorFisheries Research and Traininginstitute on Wahaga road,opposite Manawan Police Station,lahore on 16th January at 9:00am. hostel facility forparticipants will be available freeof charge. For further details, theinterested candidates may contacton the following phone numbers:042-36522895 and 042-36522896. STAFF REPORT
PIAF urges govt tofulfill its commitmentLAHORE: Pakistan industrial andTraders Association Front (PiAF)has urged the government to fulfillits commitment with the businesscommunity and ensure two-day gassupply to Punjab. in a jointstatement issued on Thursday,Chairman lahore Townshipindustries Association iftikharBashir Chaudhry and ChairmanAuto Parts Manufacturers andexporters Association Tahir JavedMalik said it was very unfortunatethat despite an assurance bygovernor Punjab to Presidents of allChambers of Commerce andindustry in Punjab and Chairmen ofTrade and industrial Associationsgas supply could not be restored.They said gas load shedding haspushed industry to the wall, which isalready facing huge difficulties, likeelectricity shortage, high input costand high markup, etc, butgovernment was playing the role of asilent spectator. They said theindustry is already facingunannounced prolonged electricityload shedding that has alreadycrippled the industrial activities,while closure of gas is putting morefuel to the fire. At the moment,when the industrial production wasat its lowest ebb and the businesscommunity was facing difficulties indealing with banks, the gas loadshedding was crushing them, theyadded. STAFF REPORT
PRO_Layout 1 1/13/2012 6:49 AM Page 2
The european debt crisis has donned thegarb of that vicious circle that continuesto tantalise and torment the thinkingheads around the globe, simultaneously.Gulping Portugal, then Greece and the
latest one to take a plunge; italy – the problem hasshowed no signs of easing up. The year 2011 was beingtouted as the year when the european hierarchy gottheir act together, and came up with the solution to therecent to fix – as time told so cruelly for the europeans;that wasn’t to be. The Greek tragedy evolved into a
south european crisis,which then went on to be-came a pan-europeandilemma. And at the tailend of 2011, the economicpicture was unmistakablygloomy. And to those whoflaunt the ‘inevitability’ ofthe chain of events, shouldtake into account the bla-tant failure on the part ofeuropean leaders to curtaila couple of vicious spirals –which eventually culmi-
nated in the aforementioned vicious circle.The first spiral traces its origin to the public debt
to the banks and back; which also gave birth to doubtsover the ability of the governments to service thesedebts, and this in turn absolutely pulverised anyinkling of confidence that europe’s banks might havehad. The banks weren’t able to lend for obvious rea-sons, which resulted in the weakening of the respectiveeconomies and eventually the bond prices further fell– to pour more misery over the damaged europeanbanks. The european Central Bank seems to have con-trolled the spiral some what via guaranteed liquidityfor three years, but the doubting Thomas still believesthat eCB’s actual agenda is alluring banks into buyingthe troubled countries’ bonds. Considering the fact thateCB’s provision of unlimited liquidity doesn’t actuallysolve the targeted debt problem, one senses the ration-
ale behind the claims that eCB’s maneuvers are in-tended to cater to banking problems instead of the debtissue. Spiral number two covers fiscal consolidationand pedestrian growth. Tax augmentation and truncat-ing public spending are still very much needed. Therewould come a point, inevitably, when recession andunemployment might instigate a political reaction, andof course uncertainty about the future governmentswouldn’t exactly be a reassuring tonic. To counter thissecond spiral, growth is the segment that should beearmarked and worked upon, even though the externalenvironment is not exactly favourable.
So what exactly is the way forward for the euro-peans? enhancing growth would require a two-pronged approach – one that caters to both supply anddemand. Now, considering that SMes (Small andMedium-size enterprises) are the driving force behindthe creation of job opportunities, eCB’s endeavour torestore liquidity to the banking system becomes ab-solutely pivotal. The governments as well, would haveto do more than just chipping in to ensure that the sup-ply-side measures are taken care of. There is a direneed of countering the interest groups that are becom-ing a major hindrance in the path of individual and col-lective recovery of the europeans and covering thisparticular base would allow economic growth to finallytake center stage in this european drama.
And of course, satisfying all stake holders would bea herculean task; and while many a hercules have per-formed this task in european history, it would take anunprecedented – at least in the recent times – level ofunderstanding on the part of individual units if europewants to drag itself out of this fiscal fix. For this task eu-rope’s social model can become an archetype. All thestakeholders must be brought on a common platform,and the one that loses out must be given its due compen-sation; and building on from this mutual understanding,the goals – that seems improbable as this piece is beingscribed – might finally become tangible realities.
Another important façade worth considering is thefact, that merely cutting interest rates wouldn’t makethings fall into place. Upping asset prices and loweringeuro’s exchange rates will result in eCB buying bondson secondary market. To cut to the chase, the matterwould then require quantitative easing. europe cancome out of its predicament if all the individual nationsand the respective stakeholders do their jobs properly;keeping in mind the greater good of the entire conti-nent and not only nurture the vested interests.
The writer is King’s College London graduate andcurrently employed as a financial consultant at
Privitisation Commission, Pakistan.
AT a time of increasing inter-national financial isolationfor islamabad, the UAePakistan Assistance Pro-gram continues to provide
crucial and appreciated assistance from atime-tested, all-weather friend. Alreadywith the coalition support fund caught inofficial logjam, the iMF program aban-doned and other multi- and bi-lateraldonors shying away because they take cuefrom the Fund, Pakistan’s fiscal positionhas come under immense strain. And con-sidering our troubles with natural andmanmade disasters over the last few years,the financial choke could not have come ata worse time for the government of Pak-istan.
The UAePAP is all the more appreci-ated because in addition to helping containnegative fallout of the mammoth human ca-tastrophe created in the wake of the floods,the program caters to social and infrastruc-ture projects with significant positive spill-over. education and health projects insome of the areas where they are mostneeded will not only empower a new gener-
ation entering the competitive job marketin the future, they will also slowly but effec-tively negate influences of extremism sorampant in the periphery. But of far greaterimmediate intrinsic value are projects per-taining to the water sector and social over-head capital – roads, buildings, etc.
The good thing about the latter is thatwhile more roads, bridges and purificationplants are always welcome, their initiationcreates valuable job opportunities andstimulate consumerism, two of the mostbasic features of any coordinated attemptto snap out of persistent stagflation. islam-abad would do well to emulate the UAemodel when undertaking targeted fiscal ex-pansion of its own.
interestingly, while foreign grants areknown to be politically motivated and sectorspecific, the one in question clearly addressesthe people of Pakistan – from displaced suf-ferers ravaged by hellish floods to innocent,deprived children growing up in extremist,merciless surroundings to the army of unem-ployed, unable to subsist. A friend in need isindeed a friend in deed.
The UAEPAP initiative
European financialdilemma is a two wayquagmire, and acollective endeavour isthe need of the hour
Two pronged European
predicament
Azeem Haye
E D I T O R I A L
Marketing waste
MY mentor and goodfriend, NadeemChawhan an organi-sational story teller,once said, “if you’re
smart and know how to market a prod-uct, you can sell anything even if itscrap, packaged and presented in theright manner.” i looked at him, andthought, how on face value it seems todwell a lot about the abilities of a mar-keter but can it really be true? Can wastereally have any economic value for any-
body? And as it is with all things‘Chawhan’, it did turn out to be true. Foronly a few days back i came across avery interesting article titled ‘Waste Not:in Ghana, fecal sludge could be blackgold’. Ghana, it turns out, does not havea proper sewerage system, with house-holds relying on dumping companies toempty their latrines. Sometimes, whenpeople can’t pay for the dumping trucks,the toilets are shut down and peoplehave to rely on other places to defecate.The sludge collected is then dumped inthe sea, with disastrous environmentalconsequences.
What really struck me about the ar-ticle was, that instead of treating it as aproblem this social entrepreneurtreated the problem as an opportunity.The plan, Murray introduced was sim-ple. instead of people having to pay fortheir tanks and latrines to be emptied,he plans to pay them for the waste – ortake it for free and use it to convert it
into a product that sells. What’s hisidea? Along with their research andfunding partners which include Colum-bia University, the Gates Foundation,and the Swiss Federal institute ofAquatic Science and Technology, theywill turn human waste into industrialfuel that can potentially run industries,and build the world’s first fecal-sludge-to-biodiesel plant funded by Bill andMelinda Gates Foundation.
enter 1986. The first PC virus evermade was a job done at Chahmiran,near the lahore Railway Station. Thisvirus was made by two brothers, AmjadFarooq Alvi, 26 at that time and BasitFarooq Alvi, 19 who were self taughtprogrammers. in a shop called BrainComputer Services, expensive softwarewas sold cheaply for as little as $1.50each. This made it a very good bargainfor foreigners thronging lahore as well,and when they went back with copies ofthe softwares little did they know that
those copies were in-fected with the Brainvirus. The fact thattwo self taught man-aged to shake theworld, sitting in thesmall part of inner la-hore is nothing lessthan pure genius. Want to know wherethe two brothers went? Well theyopened their own company called BrainNet, pioneers in the field of the internetservices industry.
Why have i cited the two stories to-gether, because this is exactly what Pak-istan needs. We need creativity, we needingenuity and companies and organisa-tions owe us a responsibility to nurturethese talented individuals of Pakistan.Telecom companies in Pakistan havetaken a lead by identifying areas that needsupport and ensuring that communities,individuals and villages are facilitated.Such steps are surely very encouraging
and one hopes thatother companies willfollow suit. Telenor forinstance has sponsoredtraining labs for dis-abled people, whileMobilink and Ufonehave also launched a
plethora of similar campaigns. At the endof the day, what really makes a differenceis investing in social enterprise, in proj-ects that convert a problem into an oppor-tunity. People like the Alvi brothers arespread across Pakistan and their talentsmerely need to be tapped in, to find cre-ative solutions to seemingly difficult prob-lems that plague the country.
All we need to do is market our prod-ucts the right way and find out of the boxsolutions to our dilemmas.
Writer is News Editor, Profit.Comments and queries [email protected]
Ali Rizvi
For comments, queries and contributions, write to:
If you’re smart andknow how to market aproduct, you can sellanything even if it’s crap
KuNWAR KHuLDuNE SHAHIDSub-Editor
MAHEEN SyEDSub-Editor
Abundant natural resources
This is with regards to the article, “Copper politics and state of economy”,published on 11/01/12. it does not need any new evidence that we have abundantnatural resources in our country, but we have tried little to exploit them properly toget rid of our economic woes. The only exception was our self-sufficiency in naturalgas, but thanks to our planners that millions of new connections to gain politicalmileage by successive governments, especially during Musharraf’s regime,criminally uncalculated distribution of CNG station permits and conversion ofindustries to gas for power generation due to government imposed exorbitant costof diesel and furnace oil that today gas has become a rare commodity. The nationstarved itself for the country’s nuclear programme, but it has only helped usbecome equipped with nuclear weapons and there are no chances that the nucleartechnology can be used by our scientist for peaceful means, especially for powergeneration. Our celebrated nuclear scientists are not even capable to overhaul theailing Chashma and KANUPP plants to solve the energy crisis. Trillions of rupeesof the poor nation were spent over years on the nuclear and missile programmeswith no audit requirement. however, the country’s nuclear assets instead ofmaking it invincible have made it more vulnerable.
LONE RANGER
LAHORE
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Friday,13 January,2012
04news
We were the first international bankin Pakistan to get an Islamic bankinglicense. In Islamic banking we haveincreased our customer base
CEO Standard Chartered Pakistan,Mohsin Nathani
Prospects of the Islamic banking industry
Shari’a, Banking and RevolutionHuMAyON DAR
T he suggestion of using islamicbanking and finance as a tool forsocial reform has added relevanceto the countries in the Middle east,
which are facing political turmoil and thecollapse of many well-established regimes.in countries such as Pakistan, which facesthe humongous task of a war on terror anda potential revolution in making, islamicbanking and finance can be used to promotemoderation in social behaviour and themodernisation of financial relations.ISLAMIc fInAncIAL pRODuctS:in the last three decades, a number of newislamic financial products have been devel-oped primarily by applying islamic nomi-nate contracts in new ways to achieve theeconomic profiles of conventional products,so as to allow Muslims to have access to fi-nancial services in ways that are not contra-dictory with their belief. This was indeed amammoth effort in which different stake-holders, including governments, interna-tional regulatory bodies, law firms, Shari’ascholars, accountants and many moreplayed instrumental roles. Consequently,there is now a wide range of islamic finan-cial products available, which offer the eco-nomic benefits of conventional products ina Shari’a compliant way. This process maybe termed as conversion of conventionalproducts into islamic. Some industry ex-perts such as Professor Volker Neinhaus ofGermany, however, argue that this is at thesame time conventionalisation of islamicbanking and finance as well, because thisprocess of conversion of conventional prod-ucts brings the economic profiles of conven-tional products into islamic banking. Thisis perhaps a valid argument.pRODuct DEvELOpMEnt: Thequestion that arises is whether islamicbanking and finance should continuewith this kind of product development orattempt to develop a new system com-prising institutions and products, whichare distinctly different from conventionalfinancial institutions and the productsthey offer. in other words: what kind ofinnovation is required to develop a finan-cial model for Muslims (and possibly forothers who may share the underpinningvalues of that model/system), which of-fers real benefits to the communities andnot mere financial sophistication.
Many industry observers and propo-nents of islamic banking and finance
argue that it must have distinct social ob-jectives for it to survive and sustain in oth-erwise fiercely competitive financialmarkets. So far the real value propositionof islamic banking and finance is in termsof Shari’a compliancy. it is now time tostart thinking about topping up its valueproposition in terms of its contribution tosocial responsibility and commitment tothe communities it attempts to serve.SOcIAL OBjEctIvES: islamic bank-ing and finance must have social objec-tives, which must attempt to bring socialreforms by way of promoting good eco-nomic agents. it should come up with a no-tion of a good economic agent and allowonly such agents (individuals and institu-tions) to be part of the islamic banking andfinance practice and movement. One wayof defining good economic agents is interms of efficiency, ethics, responsibility,and charity. Thus, an economic agent isgood if it is efficient (e.g., does things welland quickly), ethical (e.g., honest, trans-parent and just), socially responsible, andcharitable. A certain threshold level of ef-ficiency, ethics, social responsibility andcharitable giving must be set for acceptingan economic agent in the islamic financialservices industry, as a user or as a providerof such services, including the serviceproviders to the suppliers. This is some-thing very different from the current prac-tice of islamic banking and finance.RHEtORIc RAtHER tHAn REAL-Ity: islamic finance at present empha-sises upon rhetoric more than its currentreality. The current reality is that islamicbanking and finance is competing with itsconventional counterpart and has yet todevelop its own niche. This is reflected bya huge emphasis in islamic banking and fi-nance on the maintenance of profit equal-isation reserves and investment riskreserves, and the relevance of what isknown as a commercial displacement risk.All of these concepts and practices areused to ensure that islamic banking and fi-nance remains as close to conventionalbanking as possible. in fact, in the coun-tries where islamic banking and finance isbeing provided a level-playing field, treat-ment of islamic banking products is ex-actly the same as their conventionalcounterparts for the purpose of tax neu-trality. While measures such as tax neu-trality are helpful for the practice ofislamic banking and finance, these aredocumented proofs that islamic financial
products are indeed no different from theirconventional counterparts in terms oftheir economic effects. it must be empha-sised here that the author is not arguingthat the current islamic financial productsare not Shari’a compliant; he is just refer-ring to the fact that they offer similar eco-nomic benefits to conventional products.This is indeed the time for islamic bankingand finance to pause and think for a whilewhat future path it would like to take.Many industry observers believe that is-lamic banking and finance must find itsniche, which according to them is not inthe mainstream. Once it has identified itsniche, it must also identify what type of is-lamic banking and finance its potentialusers would like to see developing.MARkEt fOR ISLAMIc fInAncE:Admittedly, the market for islamic bank-ing & finance is limited. Only about 1/4of Muslims are interested in islamicbanking & finance. This means that outof an estimated global population of 1.6billion Muslims, 400 million are inter-ested in islamic banking and finance. Al-though per capita income ranges fromless than $500 per annum to over$50,000 per annum in the countrieswhere islamic banking and finance ex-ists, the incidence of islamic banking isbiased in favour of higher per capita en-vironments. if we choose $1,000 percapita as a conservative estimate of theannual income of those who are inter-ested in islamic banking and finance,then an additional annual $400 billion isavailable for islamic banks and financialinstitutions to draw their business from. ExpAnDIng HORIzOnS: however togo from the present size of $1.14 trillion (asreported in the Global islamic Finance Re-port 2011) to the forecasted $1.6 trillion (asprojected by the islamic Financial ServicesBoard for 2012), will be difficult if Westernand local conventional financial institu-tions do not inject their money into islamicbanking & finance. One way of doing so isfor Muslim governments and political par-ties (e.g., Pakistan Tehrik-e-insaf and Pak-istan Muslim league (N)) to adopt islamicbanking as a tool for social reform, whichcould serve as an important part of the rev-olution brewing in the Muslim world ingeneral and Pakistan in particular.
The writer is a Shari’a advisor to anumber of banks and financial
institutions and can be contacted at
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05
Friday,13 January,2012
news
in My view
In my view, it was
not a good idea to
convert the existing
branches into
Islamic mode
BILAL MuSTAFAManaging Director Bank of khyber,
islaMiC alternatives
We have strived to make Islamic
alternatives for all conventional
products that serve genuine needs
of business so that our segment
of population embracing Islamic
Banking can be fully benefited
JuNAID AHMEDCEO Dubai Islamic Bank Pakistan
Cash reCoveries
So far, we have net NPLs of
about Rs45 billion and we
have so far made cash
recoveries of Rs21 billion
which is the highest figure
in the industry
NAEEMuDDIN kHANPresident Bank of Punjab
Mobile banking
Mobile-banking can be an important
tool to access the unbanked as
compared to approximately 28m
bank accounts there are almost
60 million unique cell-phone users
ZAkIR MAHMOODHBL President
JAvED MAHMOOD
Prospects of the Islamic banking industry
Javed Mehmood talks to Afaq Khan, Head of Islamic Banking Standard Chartered Bank of Pakistan,discussing various aspects of Islamic banking and the role of Standard Chartered Bank in promoting it
Q: What products and services does Standard
chartered Saadiq offer in pakistan for its
consumer banking and SME customers?
A: Standard Chartered Saadiq offers cur-rent and savings accounts, term deposits,Shariah compliant credit card, takaful,home financing and SMe trade and fi-nance facilities. The enhanced Saadiqsuite includes new products such as theSaadiq platinum and PiA co- brandedplatinum debit cards; Saadiq platinumand PiA co-branded platinum creditcards; and Saadiq saver plus monthly sav-ings account. We also offer comprehensiveemployee banking products. SCBPl is thefirst and only bank in Pakistan that haslaunched Shariah-compliant credit card,Saadiq with the aim to promote islamicBanking in the country.
Q: Standard chartered Islamic Banking has made its
mark in a very short period; do you think it has grown
enough to be an alternative to conventional banking?
A: Growth of islamic Banking has been dueto an alternative being available wherebyconsumers can get the same services as con-ventional banking without having to compro-mise on their beliefs. islamic banking isgrowing and with the passage of time, asmore and more products and services are of-fered, it will be on par with conventionalbanking as an alternative available to con-sumers in line with their values and beliefs.
Q: What prompted ScBpL to initiate
and expand Islamic
Banking in pakistan?
A: Pakistan offers immense potential for is-lamic Banking and depicts an optimistic out-look for the growth prospects of the islamicBanking industry. Our goal as a bank is to beable to offer consumers, islamic bankingservices, which are comparable in terms of di-versity and convenience, to suit the needs ofcustomers in parallel with our conventionaloffering and then let them choose. Our key tosuccess is our customers who have confidencein the Standard Chartered brand name. is-lamic Banking is our way of recognising theneeds of our customers and offering financialsolutions in line with their values and beliefs.We strive to offer the same commercial con-venience as conventional banking in terms ofa diverse suite of products, ease of access toour network and availability of islamic Bank-ing products and services through all Stan-dard Chartered Bank branches.
Q: What would be the
strategy of ScBpL to maximise
Islamic Banking in pakistan?
A: A: Our strategy is very clear – we want tooffer a diverse suite of products to meet cus-tomer needs and offer the same ease, conven-ience and accessibility to islamic Bankingproducts and services that are being offeredin conventional banking.
Q: What is the customers’
response to Saadiq
credit card in pakistan?
A: Saadiq credit card is the only Shariahcompliant card in the market. Thisunique offering is in line with our visionto promote islamic Banking in the coun-try through continuously offering a di-verse suite of products to meet customerneeds in a Shariah compliant way. Re-sponse has been very positive and wehave recently expanded our credit cardsuite to offer platinum and co-brandedplatinum cards as well.
Q: Does Standard chartered
offer priority banking for its
Islamic Banking customers?
A: Absolutely. We are proud to offer theperfect blend of exceptional service, uniquebenefits and expert solutions tailored tohelp islamic Banking customers achievetheir priorities. Priority banking also offersa dedicated call centre exclusively for pri-ority banking customers. The propositionincludes dedicated relationship managersand exclusive priority banking experiencein dedicated state of the art priority centers.No matter what the customers’ prioritiesare, they can count on us to recognise theirpriority status and provide the bankingservices they deserve - not only in Pakistan,but also around the world.
Q: What is the branch
network for
Islamic Banking?
A: Customers can avail islamic bankingproducts and services from 143 StandardChartered Bank branches with over 500 re-lationship managers spread across 32 cities.
Afaq Khan is the CeO of Standard Chartered Saadiq - the interna-tional islamic banking business of Standard Chartered Bank. Afaqjoined Standard Chartered Bank in 2003 with the mandate tolaunch the islamic business division for the Bank. Since then, Afaqhas been responsible for the strategic build up of the internationalislamic banking business covering retail, corporate and invest-ment banking, across geographies with a wide suite of product ca-pabilities and award winning solutions. Afaq has been individuallyawarded the prestigious euromoney award for “Outstanding Con-tribution to islamic Finance” in 2010 and also named the “2010islamic Banker of the Year” in the london Sukuk Summit. Afaqholds an MBA from the University of Western illinois and wasborn in 1962. Prior to joining Standard Chartered, he was theGlobal head of Asset Finance and Advisory at hSBC Amanah, andbefore that with Citibank for 13 years in various functions.
PROFILE OF AFAQ KHAN
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top 5 perForMers sector wiseSyMBOL OPEN HIGH LOW CuRRENT CHANGE vOLuME SyMBOL OPEN HIGH LOW CuRRENT CHANGE vOLuME
Alfalah GHP Cash Fund 501.2900 501.2900 501.2900 Askari Islamic Asset Allocation Fund 114.7196 111.8516 111.8516Askari Islamic Income Fund 103.6501 102.6136 102.6136 Askari Sovereign Cash Fund 100.6900 100.6900 100.6900 Atlas Income Fund 519.3500 514.2100 514.2100 Atlas Islamic Income Fund 519.0900 513.9500 513.9500Atlas Money Market Fund 516.9700 516.9700 516.9700 Atlas Stock Market Fund 453.1500 444.2600 444.2600 Crosby Dragon Fund 82.9800 81.3500 81.3500 Crosby Phoenix Fund 102.5100 102.5100 102.5100 Dawood Islamic Fund 0.0000 0.0000 0.0000Faysal Income & Growth Fund 103.9600 102.9300 102.9300Faysal Islamic Savings Growth Fund 101.4000 101.4000 101.4000 Faysal Money Market Fund 101.1400 101.1400 101.1400Faysal Savings Growth Fund 101.4400 101.4400 101.4400 First Habib Cash Fund 100.8800 100.8800 100.8800 First Habib Income Fund 100.8900 100.8900 100.8900 First Habib Stock Fund 101.4400 99.4500 99.4500 HBL Income Fund 98.8551 98.8551 98.8551 HBL Islamic Money Market Fund 100.2278 100.2278 100.2278 HBL Islamic Stock Fund 105.1082 103.0473 103.0473
Fund Offer Repurchase NAv
HBL Money Market Fund 100.2768 100.2768 100.2768 HBL Multi Asset Fund 87.0103 85.3042 85.3042 HBL Stock Fund 97.6745 95.2922 95.2922 IGI Income Fund 101.8987 100.8898 100.8898IGI Stock Fund 112.3545 109.6141 109.6141 JS Principal Secure Fund I 121.5000 111.5200 117.3900 JS Principal Secure Fund II 104.1200 96.5000 101.5800 KASB Cash Fund 0.0000 0.0000 100.1087Lakson Equity Fund 106.3763 103.2779 103.2779 Lakson Income Fund 102.2115 100.7009 100.7009 MCB Cash Management Optimizer Fund 100.5994 100.5994 100.5994MCB Dynamic Cash Fund 103.2259 101.6775 101.6775 MCB Dynamic Stock Fund 83.2931 83.2931 85.4288 NAMCO Income Fund 108.2753 108.2753 108.2753 National Investment Unit Trust 26.55 25.74 25.74PICIC Income Fund 101.3261 101.3261 101.3261 UBL Capital Protected Fund II 106.7800 101.4400 106.7800UBL Islamic Savings Fund 100.4576 100.4576 100.4576 UBL Savings Income Fund 101.9855 100.9757 100.9757
Interbank RatesUS Dollar 90.2474UK Pound 138.3944Japanese Yen 1.1730Euro 114.9481
Buy SellUS Dollar 91.00 92.00Euro 114.64 116.52Great Britain Pound 138.10 140.02Japanese Yen 1.1712 1.1838Canadian Dollar 88.45 90.92Hong Kong Dollar 11.53 11.79UAE Dirham 24.68 24.92Saudi Riyal 24.18 24.39Australian Dollar 92.74 95.55
PRO_Layout 1 1/13/2012 6:55 AM Page 6
Friday,13 January,2012
news
07
The coming era will mark the age of abundance ofknowledge. Machines will continue to get smarterthan humans, and in addition to education, mobile technology will take over all financial,information transfer and communication services
Wateen Telecom CEO, Naeem Zamindar
ISLAMABAD
AMER SIAL
The government suffered amajor embarrassment onThursday when it was forced bythe intending liquefied Natural
Gas (lNG) importers to desist from hur-riedly converting the liquefied PetroleumGas (lPG) import terminal at the PortQasim without due diligence and provid-ing a guarantee for level playing field. MEEtIng WItH pRIvAtE SEc-tOR: Top heads of three private sectorcompanies, Global energy infrastruc-ture, engro Vopak and Pakistan Gas-port held a meeting with the officials ofthe Ministry of Petroleum, Oil and GasRegulatory Authority (OGRA) alongwith the representatives of the UnitedStates Agency for international Devel-opment (USAiD). An informed sourcesaid that they sought clarification from
the government on its intended lNGimport from Qatar, and retrofitting atProGas lPG import terminal to enableit to handle lNG imports. The terminalwas purchased by the state owned SSGCto expedite lPG imports in the publicsector. They also expressed grave con-cern over the demand of $10 millionguarantee upfront from OGRA, whichthey termed unjustified as they were toinvest $300 million in lNG import ter-minal and $1 billion in trade finance.puBLIc SEctOR pARtIcIpAtIOn:They said the entry of public sector in lNGimport would negatively affect their busi-ness plans as the government was not in-terested to buy gas from them and hadasked them to find third party buyers.They proposed that the governmentshould look into possibility of buying lNGfrom them if their prices were competitivewith the Qatari lNG. They also opposedutilisation of lPG import terminal for
lNG, as they pointed out that the terminalwas on the main shipping channel andeven a study conducted by Port Qasim Au-thority had termed construction of anylNG terminal a security risk. They saidthat even if government went ahead withits plans the international shippers wouldnot enter the channel, as it was against theinternational standards. Secretary Petro-leum, the source said was not aware ofthese issues and said that he would lookinto the matter to resolve it.Lng IMpORtS fROM QAtAR:Talking to reporters on Thursday Petro-leum Minister Dr Asim hussain said thatthe government would start lNG importsfrom Qatar and it would be injected in thenational transmission network. he said1300 mmcfd gas equivalent of lNGwould be imported as the channel couldnot handle a ship carrying 500 mmcfdequivalent lNG. The minister said priceof imported lNG will be included in the
weighted average and consumers wouldhave to pay higher price for gas. he saidimports will start within next eightmonths. The current average consumerprice for local gas supplies is $3.5mmBTU as compared to lNG price of 18mmBTU. This will significantly increasethe domestic consumer price.BRIDgIng DEMAnD AnD Sup-pLy gAp: The minister said he wasmaking efforts to bridge the demand andsupply gap in gas supply through importsbut OGRA was hindering his efforts.When asked who in OGRA was opposinghis moves as all top officials of OGRAwere very compliant of ministry’s policydecisions, he said tampering in the policydirectives was done by the middle cadreofficials who try to implement their owntheories. Giving an example he said therewas no condition of guarantee for lNGimports but some where from the middleit came up and now the investors were
being forced to give a guarantee of $10million upfront, even though they had tomake complete investment on their ownfor importing and selling lNG.
A statement issued by the ministrysaid that while chairing a meeting withlNG importers, Secretary Petroleum ejazChaudhry dispelled the impression thatgovernment was violating the lNG policyand emphasized that the import processwould be based on merit and completelytransparent. it was decided that a commit-tee will be notified comprising of the rep-resentatives of the petroleum ministry,OGRA and representatives of lNG import-ing companies to look into the detailedprocess of lNG import and to resolve con-cerns of the importers. it was clarified thata separate expression of interest (eoi)would be advertised for lNG tolling. Sec-retary Petroleum chaired the meetingattended by representatives of OGRA,USAiD and lNG importers.
LNG investors force govt to provide level playing field
Cement manufacturersin south increase prices
KARACHI
STAFF REPORT
CeMeNT manufacturers in the southernregion have increased cement prices byRs50 to 100 per tonne, effective fromtoday. Thatta Cement and Al-Abbas
Cement have increased their cement prices byRs100 per tonne to Rs7,100 per tonne. Whereas,lucky Cement and Attock Cement have increasedtheir cement prices by Rs50 per tonne to Rs7,550and Rs7,650, respectively.Domestic cement prices have remained resilientaround Rs400 per bag, despite an oversupply ofaround 12.8mn tonnes after Fauji Cement broughtits 7,200 tonnes per day plant online.international coal prices on the other hand, havebeen tracing a declining trajectory, losing morethan 10 per cent since the start of 2QFY12. Coalprices have averaged around $109 per tonne (RBfob) in 2QFY12 compared to $118 per tonne in1QFY12, cooling off by 7 per cent QoQ. ‘We believe,this opposite movement in cement and coal pricesis expected to widen the gross margins of thedomestic cement manufacturers, hinting at ahealthy profitability growth during 2QFY12,’ saidSyed Abid Ali at Ahl.According to the latest figures issued by AllPakistan Cement Manufacturing Association(APCMA), cement manufacturers sold 15.4mntonnes of cement in 1hFY12; a 4 per cent YoYimprovement, when compared with 14.8mntonnes in 1hFY11. Total dispatches in December 2011 jumped by 19per cent MoM to 2.7mn tonnes as compared to2.3mn tonnes sold in November 2011. This wasmainly on account of 24 per cent MoMimprovement in domestic sales coupled with a 5per cent MoM improvement in exports.
BOK’s call centre starts operationskARAcHI: The Bank of Khyber (BOK) iscommitted to increase the quality of its services tothe customers by providing them centralised pointof contact across the country; this was stated byBilal Mustafa Managing Director BOK whileformally inaugurating BOK’s dedicated Call Centrethis morning at Karachi. The BOK Call Centreinauguration ceremony was also graced by Nadeemelahi Country head & Managing Director TRGPakistan, Ayub hamid Group head hRD BOK, AsifMasood, head Operations Financial institutions,TRG, Mr. Babar Pervez Business Manager TRGPakistan, Mr. Masood Wahindna head investmentBOK, Syed Ali Nawaz Gilani head Marketing andTariq Khan Divisional head Financial institutionsBOK apart from senior executives of both BOK &TRG Pakistan. Bilal Mustafa said that BOK nowwith increased net work of branches throughoutthe country with islamic and conventional mode offinancing is aiming to reach to their customersthrough latest technology which should be securein use and efficient in response. PRESS RELEASE
KARACHI
ISMAIL DILAWAR
The phased devolution of at least 17ministries to the provinces underthe 18th ConstitutionalAmendment has increased, what
the central bank says, the annual financialburden of the federating units to the tune ofaround Rs75 billion. What is alarming is thefact that this “resulting increase” in theprovincial current expenditures, on accountof higher wage bills, pension liabilities,operations and maintenance costs, etc,might leave as the state bank describes,“fewer resources” for the developmentprojects at least in the short run.On the other hand, the cash-strappedfederal government, whose average annualexpenditure on these ministries during lastfour fiscal years was recorded at Rs65billion against the budgeted Rs78billion, would be provided with afiscal space of around Rs75 billionfor the current budgetary year,2011-12 terms.According to official figures, thefederal government spent Rs67.4billion in FY08, Rs63.5 billion inFY09, Rs70.1 billion in FY10 and Rs59.4billion in FY11 against a budget allocation
of Rs70.6 billion, Rs82.9 billion, Rs91.4billion and Rs66.6 billion, respectively, onthese ministries. This is sans expenses thefederal government incurred on account ofthe higher education Commission (heC).The federal government, which is bracing for afiscal deficit of over five per cent of the GDPthanks to its ever-increasing currentexpenditures, is left with 31 ministries to takecare of, after the devolution. “Financial burdenon the provinces is expected to increase withthe abolition of the concurrent list,” State Bankof Pakistan (SBP) observed in one of its latestreports on state of the country’s economy.The four provinces are already spending hugesums on account of current expenditures.According to ministry of finance, during FY11the current expenditures of Punjab, Sindh,Khyber Pakhtunkwah and Balochistan stood,respectively, at Rs375.5 billion, Rs248 billion,Rs121.7 billion and Rs85.9 billion. Thepreceding year, FY10, saw them spending
Rs303.2 billion, Rs184.6 billion, Rs102.3billion and Rs56.1 billion. The financialbalance of the provinces, especiallyPunjab and Sindh, usually remains inthe red zone as FY10 witnessed Punjab
facing a fiscal deficit of Rs33.8billion and Sindh Rs10.5
billion. The year in reviewsaw the two provinces
collecting revenues of Rs401.7 billion andRs241 billion against an expenditure ofRs435.5 billion and Rs251.5 billion.
last year, however, the four provinces’financial balance set in the green zone withPunjab marking a surplus of Rs48.1 billion,Sindh Rs20.5 billion, KPK Rs50.3 billion andBalochistan Rs15.6 billion. But, at the sametime the landmark constitutional change hasopened new windows of revenue generationfor the provinces in the face of, what theState Bank said, GST on services, federalexcise duty on well-heads of oil and gas,state lotteries, duties on property, taxes oncapital value of immovable property and“any fees” the provincial governments levyon the devolved areas. it is worthy to bementioned here that Sindh governmentclaims to have collected Rs11.5 bilion during1hFY12 under the head of GST on services.
however, if the provinces failed to tapthis potential they would find themselves inhot waters. With the abolition of federalconcurrent legislative list under 18thAmendment, the provincial governmentshave been devolved some 17 federalministries in three different phases. Theministries devolved in the first phase includethe local government and rural development,population and welfare, special initiatives,youth affairs and zakat and ushr.
