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Saturday, 6 October, 2012 SECP’s stellar September g Registers 244 firms of Rs3.74bn authorised capital in the month g 185 companies upped their total authorised capital by Rs4.86bn KARACHI STAFF REPORT The Securities and Exchange Commission of Pakistan (SECP) registered 244 companies during September. The authorized capital and paid-up cap- ital of these companies is Rs3.74 billion and Rs390 million respectively. During the month, applications/returns for increase in authorized capital for 185 companies were accepted, with the total authorized capital incre- ment of Rs4.86 billion. Seventy-nine companies filed applications/returns for increase in paid-up capital with the total increment amounting to Rs1.51 billion. The new incorporations include 218 private companies, fol- lowed by 14 single-member companies and 4 each as public unlisted com- panies, non-profit associations and foreign companies. The foreign companies belong to South Korea, Oman, China and Singapore. Foreign investment by nationals from Afghanistan, China, Iran, Peru, Romania, Spain, UK and US has been witnessed in 10 new local companies. These companies are from construction, food and beverages, fuel and energy, IT, trading and communication sectors. With 29 companies the services sector has the highest number of new incorporations, followed by trading with 28, tourism with 18, construction with 16, communications and I.T. with 12 each, and food and beverages sector with 11 companies. The Lahore Company Registration Office registered 85 companies, followed by Karachi and Islamabad CROs, registering 72 and 53 companies respectively. The Peshawar, Multan and Faisalabad CROs registered 15, 10 and 7 companies respectively, while Quetta and Sukkur CROs registered 1 company each. Foreign buyers continue to have B2B meetings KARACHI STAFF REPORT During the last two days of 7th Expo Pakistan, many MoUs have been signed while B to B meetings also continued on Friday. According to TDAP officials, Chief Executive TDAP Tahir Raza Naqvi has held separate meetings with various trade groups, delegations especially from, South Africa, Egypt, Australia, Russia, Afghanistan and others. Besides the business to business meetings and interactions were separately being or- ganized by members of FPCCI and KCCI. The chief executive said that all the possible facilities were provided to the importers/foreign buyers and local businessmen to avail the business opportunities at the yearly held Expo Pakistan, while taking to media. The businessmen were freely hav- ing interactions with each other while various foreigners group were also holding meetings with the CE TDAP to discuss issues related to technical things, matters related to policy level and facilitation. According to Naqvi, the final data, importers orders and total outcome of the event would be shared with media by end of the mega event. However he ex- pressed his satisfaction over the two days’ event specially arranged for the foreign visitors. He said the expo center would be open for public from Saturday to Sunday. The foreign buyers, who met the concerned Pakistani companies’ representatives during the exhibitions have in- formed him that majority of them had good deals with the country’s ex- porters and also have placed orders worth millions of dollars. KARACHI ISMAIL DILAWAR A S expected the central bank on Friday slashed its discount rate by 50 basis points to 10 percent from 10.5 percent for the next couple of months. The regulator, however, urged the government to take “comprehen- sive” fiscal reforms, keep its budgetary bor- ings from it in check and avoid the negative consequences of excessive borrowings from the scheduled banks. The central bank also proposed an effective overhaul of the gover- nance structure of the energy sector that, it believes, is important for the revival of pri- vate credit, investment and sustainable medium to long term economic growth. To take effect from the 8th of this month, the rate-cut was decided by the Central Board of Directors of the State Bank of Pakistan (SBP) at its meeting held here at SBP with SBP Governor Yaseen Anwar in chair. A continued deletion in the inflation rate that contracted in September to single digit, 8.8 percent happens to be the major attrib- utable factor in the 50bps rate-cut. “A con- sistent deceleration in inflation since May 2012, to 8.8 percent in September 2012, is more than earlier estimates. Thus, despite an expected uptick in H2-FY13, the overall in- flation outlook has improved. In fact, the likelihood of meeting the 9.5 percent infla- tion target for FY13 has increased,” the SBP said. At the macro level, it said, it seems that the effect on inflation of falling private in- vestment demand was becoming more pro- nounced than the influence of high fiscal borrowings. “The disaggregate CPI inflation data also show that this could be a beginning of a broad based trend. The number of com- modities with double digit year-on-year in- flation has slightly come down in the last few months after a secular increase over the last three years; first in the food group and now in the non food group as well.” The decline in 20 percent trimmed core inflation measure, to 10.4 percent in September, is slower than the fall in CPI inflation. “This indicates persistence of inflation expecta- tions due to iner- tial effect of high infla- tion experi- enced in the recent past, overall rising trend in fiscal bor- rowings from the SBP, and depreciation of exchange rate,” it said. The regulator said the recent fall in inflation together with a retire- ment of Rs412 billion of fiscal borrowings from SBP during Q1-FY13 could bring down core inflation further by having a beneficial impact on inflation expectations. This would depend, however, on the fiscal authority’s re- solve to maintain this trend in the coming quarters, the bank warned. While discussing the previous rate cut announced in August 2012, the Monetary Policy said that a declin- ing inflation together with weak growth in credit to private busi- nesses was the basic context in which SBP re- duced its policy rate by 150 bps in August 2012. “The resumption of monetary easing, in this environment, was deemed necessary to influence the behavior of borrowers in the private sector and scheduled banks to step up efforts to im- prove their intermediary role,” the SBP said adding a host of factors needs to be consid- ered for this to be sufficiently effective. “Prominent among these are considerable improvement in the availability of energy and reduction in fiscal borrowing needs from the banking system. The former is expected to facilitate an increase in the demand for credit and the latter would help in improving the supply of credit to the private sector.” Further support to SBP’s initiative can come from realization of expected foreign financial inflows that would alleviate the balance of payment concerns and help in easing the considerable fiscal pressure on domestic bor- rowings, the bank added. “The effectiveness of SBP’s current monetary policy stance con- tinues to weigh upon improvement in the fis- cal position, better availability of energy, and an increase in foreign financial inflows,” it said. The central bank pointed out that weak foreign fi- nancial inflows are the main challenge faced by the balance of payment position. “The external current account balance, on the other hand, is small and shrinking. In fact, during the first two months of FY13, it posted a surplus of $884 million. This is pri- marily due to robust growth in remittances, $2.5 billion received in July and August 2012, and receipt of $1.12 billion Coalition Support Funds in August 2012,” it said. Ac- cording to SBP, the constrained by energy shortages and weak global economy, the ex- port growth remained subdued. The import growth has also slowed down and most of the incremental increase over the correspon- ding period of last year is because of price impact, it observed. The retirement of gov- ernment borrowings to SBP was made possible by substantial borrowings from the scheduled banks; Rs437 billion during 1 July–21 September FY13, it said adding that consequently, the outstanding amount of liquidity injections by the SBP has increased to Rs611.5 billion by the end of Q1-FY13. “While this may not be an optimal situ- ation, it is necessary in current circum- stances. This is because some base money creation is essential to avoid an economic depression. The creation of money through the other source, accumulation in the Net Foreign Assets (NFA) of the banking system, is difficult due to weak foreign financial in- flows. Similarly, the SBP (Amendment) Act (2012) requires at least zero net flow of fiscal borrowings from SBP during a year,” the bank observed. To continue to keep borrow- ings from SBP under check and avoid the negative consequences of excessive borrow- ings from the scheduled banks, comprehen- sive fiscal reforms should not be delayed further. “These include, but are not limited to, broadening of the tax base, reduction in wasteful subsidies and better coordination between federal and provincial governments in terms of keeping the consolidated fiscal position under control,” said the SBP. SBP’s quite the slasher! ISLAMABAD ONLINE The United States and Pakistan are holding each other responsible for the delay in much awaited Bilateral Investment Treaty (BIT) that has been considered a breakthrough in the Pak-US bilateral relations, sources re- vealed. The representative of the US side claims that the BIT draft has been finalized for the signing. The American officials were of the view that they have finalized the modalities of the agreement and Pakistani side working on the technicalities of the BIT pact. While on the other side Pakistani au- thorities are claiming that ball is in the Americans court and the BIT could be sign when and where the US authorities say. The treaty between both countries was earlier expected to be signed during this month but now it has been delayed for un- specific period. A high level official of Board of Investment (BOI) told this agency that in- ternational agreements were not taken place over night as it was time taking process. “Pakistan does not seem that the Bilat- eral Investment Treaty between both coun- tries could be sealed during current financial year 2012-13,”the official said, adding that there were many financial and defence re- lated issues remained unresolved during re- cently held talks between both countries. The US officials are confident that the treaty would be signed in the current fiscal. A 6-member US team held talks with Board of Investment officials on 27-28th Au- gust to discuss unresolved issues of consid- erable importance to conclude the BIT. Pak-US BIT started in 2004 and continued till 2006 but many issues remained unre- solved. The biggest stumbling block was ar- bitration rules in case of any dispute. After a five-year deadlock, the Board of Investment took the initiative to restart the negotiation process last year. It is pertinent to mention here that Saleem H.Mandviwalla last month expressed the hope that BIT will lead to Free Trade Agreement (FTA) be- tween the two countries, resulting in market access and increase in exports to the US markets and more investment from the US as both the countries had already signed draft of the treaty earlier this year. IT’S YOUR FAULT! NO, IT’S YOURS! Pak-US officials hold each other responsible for delay in Bilateral Investment Treaty ISLAMABAD APP The Sensitive Price Indicator (SPI) for the week ended on October 4, for the lowest income group up to Rs.8,000, registered decrease of 0.53 per cent as compared to the previous week. The SPI for the week under review in the above mentioned group was recorded at 181.34 points against 182.31 points regis- tered in the previous week, ac- cording to provisional figures of Pakistan Bureau of Statis- tics (FBS). The weekly SPI has been computed with base 2007-2008=100, covering 17 urban centers and 53 essential items for all income groups and combined. The SPI for the combined group decreased by 0.73 per cent as it went down from 188.33 points in the previous week to 186.96 points in the week under review. As compared to the corresponding week of last year, the SPI for the combined group in the week under review witnessed increase of 6.41 percent. As compared to the last week, the SPI for the income groups from Rs.8001- 12,000, 12,001-18,000, 18001-35,000 and above Rs.35,000 decreased by 0.56 percent, 0.61 percent, 0.71 and 0.88 percent respectively. During the week under review average prices of 20 items registered decrease, while that of 06 items increase with the remaining 27 items' prices unchanged. The items which recorded decrease in their average prices dur- ing the week under review included onions, chicken live (farm), petrol, bananas, tomatoes, lawn, pota- toes, kerosene, gur, moong pulse (washed), vegetable ghee (loose), ma- soor pulse (washed), mustard oil, red chillies (powder), wheat flour (bag), sugar, gram pulse (washed), rice (irri- 6), diesel and mash pulse (washed). The items which registered in- crease in their prices included egg hen (farm), LPG( 11 kg cylender), bread (plain), rice basmati (broken), long cloth and garlic. The items with no change in their average prices during the week under review included wheat, beef, mutton, milk (fresh), curd, milk (powdered), cooking oil (tin), vegetable ghee (tin), salt (powdered), tea (packet), cooked beef, cooked dal, tea (prepared), cigarettes, shirt- ing, georgette, sandal (gents), chappal (gents), sandal (ladies), electric charges, gas charges (upto 100m3), firewood, en- ergy savor, washing soap, match box, tele- phone local call and bath soap. Slashes discount rate further by 50bps to 10pc Weekly inflation falls PRO 06-10-2012_Layout 1 10/6/2012 4:08 AM Page 1
