profit 23th november, 2011

Wednesday, 23 November, 2011Pages: 8 profit.com.pk

KSE witnesses record low activity Page 4

ISLAMABAD

AMER SIAL

The government has noplans to cut rs290 billionPublic Sector DevelopmentProgramme (PSDP) for the

current fiscal year. rs71.6 billion hasbeen released for infrastructure, so-cial and other projects during July 1to November 18.20 pc funds released in second quarter: An officialsource said the Ministry of Finance hasnot shared any intention to slash PSDPand funds were being regularly releasedfor different projects. Under the releasemechanism, he said, during the firstquarter July-September of the currentfiscal year 20 per cent of funds were re-leased while during the second quarteranother 20 per cent of the ceiling wouldbe released. he said the governmentwas following austerity measures but sofar there were no indications of anyplans to cut the PSDP. Austerity meas-

ures could work to control expendituresbut if adopted for development projectsthey work to impede growth and jobs.“We are releasing funds as allocatedunder the budget.”prioritising development:All the government departments weredirected to utilise the funds firstly forprojects that were more than 90 percent complete and then give preferenceto other under implementation proj-ects that were more than 60 per centcomplete. however, he said that insome cases initiation on new projectswhich were critical for the country’sgrowth were allowed like the DiamerBhasha Dam and Chashma NuclearPower projects. “These are criticalprojects to meet the power require-ment of the country and will takeyears to complete if initiated thisyear,” the source said.

Government has released rs35.4billion for 328 projects in the infra-structure sector, rs35.5 billion for849 projects in the social sector and

rs0.6 billion for 83 other projectsduring July to November 18. The al-locations will pick up in the thirdquarter during which 25 per centand remaining 35 per cent will be re-leased in the fourth quarter of thecurrent fiscal year.fiscal year targets: The an-nual plan for the current fiscal yeartargets a GDP growth of 4.2 per cent,with agriculture growth rate of 3.4per cent, industry 3.7 per cent andservices 5 per cent. Despite the finan-cial constraints and extreme shortageof resources the government in-creased PSDP to rs290 billion for thecurrent fiscal year against the actualexpenditure of rs196 billion duringthe last fiscal year.

The source said rs290 billionPSDP has a foreign exchange compo-nent of rs36.5 billion and rs33 bil-lion for special programmes. Sincethe foreign aid disbursement amountwas handled by the economic AffairsDivision, and releases against special

programmes were being made di-rectly by the Cabinet and Finance Di-visions, the releases of PlanningDivision were exclusive of foreign ex-change amount and special releases.It will be releasing only rs220.5 bil-lion during the current fiscal year.power and educationsector: he said the monthly re-leases to National highway Author-ity and higher educationCommission were made in bulk asthey were empowered to utilise thefunds for different projects on pri-ority. On the power sector projects,he said, the financing of the proj-ects was being arranged by theWater and Power Development Au-thority (WAPDA) and it was notpart of the budget. even thoughthey were being monitored by Plan-ning Commission as under the rulesany project having foreign exchangecomponent of more than 25 percent of the project cost comes underits ambit.

Finance committeeseeks transparencyin CCP

ISLAMABAD

JALALUDDIN RUMI

SeNATe special committee on financeasked Secretary Finance WaqarMasood to submit written assurance

that no charge is proved regardingembezzlement allegations in CompetitionCommission of Pakistan (CCP). Specialfinance committee headed by Senator IshaqDar asked CCP chairperson rahat Konainto submit enquiry reports regardinginvestigation in the cases of Trans Global,Telecom Company and a company from thebanking sector. Committee membersProfessor Khursheed and haroon Akhtaralso ask clarification related to reportsubmitted by finance ministry regardingtwo alleged charges reported in theanonymous email. After the email, thecommittee in light of final observationssubmits its recommendations to Senate’sfinance committee. Senator haroon Akhtarsaid that charges on CCP chairperson, thatthe two cases were not dealt with on meritrelated to CCP chairperson’s sister andhusband, raise question of clash ofinterests. he was of the view that ifaforementioned allegation is established asa norm in market, it would tarnish theimage of the commission. CCP chairpersondenied all charges.

govt still trying tomeet ImF conditions

ISLAMABAD

AMER SIAL

TO meet one of the key conditionalitiesof the International Monetary Fund(IMF), the government is exploring

the possibility of opening a special accountwith the commercial banks to attract fundsfrom public sector enterprises (PSes) andpublic at flexible terms. An official sourcesaid a proposal is under consideration fortransition to a treasury single account tomeet one of the key demands agreed with theIMF under the incomplete $11.3 billionstandby arrangement program. Thegovernment is in the process of amendingrules governing the placement of fundsowned by PSes directing them to investsurplus funds in the government debtinstruments. This will help diversify investorbase in government securities and reducedebt servicing cost. After signing SBA withIMF, the government introduced the conceptof assignment account in 2008. however, asurvey designed by the World Bank, toquantify the amount that could betransferred to the government account withthe State Bank of Pakistan (SBP) remainedinconclusive. The government then opted forbilateral meetings with the institutionsholding rs500 million and above with thecommercial banks but the conclusion wasthat there was a small amount that could betransferred to the Federal ConsolidatedFund (FCF) from the current stock ofgovernment deposits with the commercialbanks. To put the issue at rest, thegovernment instructed all the federalministries, divisions, organisations andattached departments to surrender moneybelonging to the FCF. Otherwise they wouldhave to provide a certificate to the FinanceDivision containing details of accountsmaintained and sources of funding. Thegovernment has failed to submit asatisfactory bankruptcy law to theparliament, even though the cabinetconstituted a committee headed by theFinance Minister to examine the Corporaterehabilitation Act 2011.

KARACHI

GHULAM ABBAS

There would practicallybe no grant of Most Fa-vored Nation (MFN),until negative list of

trade exists between Pakistan andIndia, said Commerce SecretaryZafar Mehmood. he was talking toa group of journalists.

however, Pakistan madeIndia a special case, and was stillformulating the negative list tosave domestic industry. For sectorspecific study and extensive con-sultation, the process was stillgoing on and after in-depth evalu-ation the final list would be pro-

vided to cabinet for approval, thesecretary said.

In reply to a query, Mehmoodsaid the proposed negatives listwould be completed by February2012 after completion of sectorspecific study consultation. Min-istry and Trade Development Au-thority of Pakistan (TDAP) havealready held six extensive meet-ings with all representatives of sec-tors and trade bodies so far.

referring to a joint statementissued after recently held com-merce secretaries meeting in Delhi,he said Islamabad has informedDelhi that consultation process ondevising negative list was almostcomplete. A small negative list

would be finalised and ratified byFebruary, 2012. Thereafter, allitems other than those on negativelist would be freely exportable fromIndia to Pakistan. In the secondstage, negative list will be phasedout. Schedule for this phasing outwill be announced in February2012 at the time the list is notifiedand it is expected that the phasingout will be completed before theend of 2012. The move was insti-gated after Pakistan’s decision totransit from the current positive listapproach to a negative list.

To a question, he replied thatcentral bank of India was mullingover a few options to facilitatetrade. It is being considered that

India might open a bank branch ora subsidiary institution in Pakistanto resolve the banking issue. how-ever Pakistani side, he said hasmade it clear that until banking fa-cility is not there bilateral tradecannot be enhanced.

Secretary said physical infra-structure of the second gate atWagah land route was being de-veloped to ensure un-inter-rupted transit of goods. Allinfrastructure constructionwould be completed, making thenew gate fully operational nolater than end of February 2012.

Talking about the much de-bated Non-Tariff Barriers (NTBs)he said joint working group would

continue interaction to addressany clearly identified sector-spe-cific barriers to trade. he informedthat Indian side, in a meeting heldin Delhi, had also said that all stan-dards and specifications were non-discriminatory, and they areapplied to all countries exportinggoods to India. In reply to a query,he said Indian side has also in-sured that some technical impedi-ments in investment clauseswould be removed to facilitate in-vestment in both countries. Apartfrom trade with India, Mehmoodsaid, Pakistan was also focusing ontrade options with other regionalblocks specially, eCO, D-8, GCC,ASeAN, SAArC and OIC etc.

Govt not to slash fundsfor development projects

No mFN if negative list of trade exists: Sec’y Commerce

PuBlIC SeCtoR DeveloPmeNt PRogRAmme

g Rs71.6 billion released till Nov 18 g Austerity measures for development

projects would impede growthg Important schemes like Chashma

Power Project and Bhasha Dam tobe patronised

PROFIT pages 23-11-2011_Layout 1 11/23/2011 12:11 AM

debate02Wednesday, 23 November, 2011

g tradekey facilitatesover $100 milliontrade transactionsevery month

g website attracts 32million page viewsevery month

JAVeD MAHMooD

TrADeKey is the 3rd largest businessto business website in the world andis facilitating over $100 million tradetransactions every month. It facili-tates various traders worldwide by of-

fering them an online platform to interact withnumerous businesses from around the world. InPakistan TradeKey has more than 400 employeesand by adding the employees from its offices inSaudi Arabia and China, the total workers areover 500. The web-portal has 5.8 million cus-tomers in 220 countries.

In an interview with Profit, Junaid Mansoor,the CeO of the company said that he had vowed tomake his company, number one in the world. Toachieve this goal the entire team of Tradekey ismaking stupendous efforts to evolve the companyinto one of the best, he said.

gAugINg SuCCeSSCeO Tradekey highlighted the fact that his com-pany has a capital investment of $20 million andmore than 9.5 million web-users visit the websitewith over 32 million page views every month. “Sofar over 1 billion visitors have visited our websitein the last 6 years. At our website there are36,000 categories of industries in which we haveproducts by sellers for prospective buyers” he in-formed. TradeKey is the pioneering Business toBusiness website in Pakistan, having most of itsclientele in USA and China. More than $100 mil-lion buying and selling takes place majorly fromUSA, China and europe at this website. As a busi-

ness model, TradeKey doesn’t charge its im-porters and only charges the exporters who getthe chance to sell their products worldwide. Morethan 1 billion people have visited the website andthe active visitors are mainly from China, US,Turkey, Taiwan. Talking about the history of hiscompany Mr Junaid said that TradeKey.com wasformed in 2005 with the vision to support inter-national trade and to virtually gather buyers andsellers from all over the world at a single plat-form. he said “Our dream has come true due tothe encouraging fact that within 6 years we weredeclared as one of the fastest 500 growing com-panies of Asia in a competition held by All-WorldNetwork organised by harvard University”.

CuttINg eDge weB PoRtAlTradeKey.com is the first B2B marketplace that re-ceived Google Page rank 8 and it is also theworld’s first B2B marketplace that earned ISO9001 Quality Management System and ISO 27001Information Security System certifications to en-sure maximum customer satisfaction and safe on-line trading. TradeKey also helps small businessesto convert into global enterprises by providingthem a cutting-edge web-portal; through whichthey can promote their products, find and satisfygenuine buyers and explore international businessopportunities. The global online trade business istouching the mark of $5 trillion but Pakistan does-n’t have any substantial share in it. Internet is in-deed the future of the Pakistani economy and if weutilise its full potential our country can easily ac-celerate its exports significantly in the near future.Currently, TradeKey has 140,000 users in Pak-istan which is very less as compared to its world-

wide consumer base of 5.5 million active users.Promotion of locally produced products throughthe internet in the international market has not yetgained momentum for Pakistani businesses, how-ever; TradeKey is developing Pakistan-specificproducts that would be able to attract a large num-ber of Pakistani manufacturers and exporters tocapitalise on the power of Internet.

tAPPINg loCAl mARketWhile shedding light on the indigenous market,Mr Junaid commented that for now Pakistanicustomers are not used to pay for internet-basedservices and there are so many people who arestill not using the computers and internet to for-tify their businesses. TradeKey offers basic serv-ices with no charges to the Pakistani clients inorder to help them promote their products andservices on an international level, however, theyare charged if they require extensive services. Inorder to facilitate the Pakistani exporters in ex-ploring the extensive trade opportunities throughinternet, TradeKey is also planning to forge part-nerships with Trade Development Authority Pak-istan (TDAP), Small & Medium BusinessDevelopment Authority (SMeDA) and Organisa-tion for Islamic Countries (OIC). Moreover, thecompany is providing an opportunity to Pakistaniwomen entrepreneurs to explore the potential ofinternet-based business. TradeKey has recentlyannounced to launch Women e-Business Incuba-tion Center, to create partnership with Pakistaniwomen. Through this initiative, TradeKey willprovide a platform to women for all their innova-tive ideas with support in areas like product de-velopment, marketing and finance.

emPoweRINg womeN “We want to support and promote women who haveideas and are committed to excellence in the field ofe-business. This programme would make women’sdream come true by enabling them to develop theirown Internet-based businesses with the flexibility ofworking from anywhere at anytime” the CeO in-formed. This facilitation by TradeKey is in pipeline,addition to work from home facility provided towomen workers in developing countries.

gRowth oPPoRtuNItIeS FoR emPloyeeSThe company also provides various growth opportuni-ties to its employees as well, since they would grow withthe expansion of the business. As e-business, specificallyits B2B sector in an emerging phase, there has beenscarcity of human resource that has experience, knowl-edge and skills to play an important role in the develop-ment of this industry. To address this challenge,TradeKey has designed and implemented an innovativestrategy and performance management system knownas the Grow Unlimited Program (GUP). The Grow Un-limited Program (GUP) identifies, appraises and devel-ops performance of its employees in order to meetbusiness objectives. Unlike other conventional perform-ance management systems, GUP gives control to its em-ployees for their own growth so that they can choose thepace of their career development by themselves. This isachieved by pre-defined criteria and performance basedpromotions. A positioning system takes care of the pro-motions of employees through this program. employeesearn points based on their performance every quarterand as an employee accumulates certain level of points,he/she becomes eligible for a promotion.

Tappingbusinessesonline

RoBeRt SKIDeLSKy

POlITICIANS are masters at“passing the buck.” everythinggood that happens reflects theirexceptional talents and efforts;

everything bad is caused by someone orsomething else.

The economy is a classic field for thisstrategy. Three years after the global econ-omy’s near-collapse, the feeble recovery hasalready petered out in most developed coun-tries, whose economic inertia will drag downthe rest. Pundits decry a “double-dip” reces-sion, but in some countries the first dipnever ended: Greek GDP has been dippingfor three years. When we ask politicians toexplain these deplorable results, they replyin unison: “It’s not our fault.” recovery, goesthe refrain, has been “derailed” by the euro-zone crisis. But this is to turn the matter onits head. The eurozone crisis did not derailrecovery; it is the result of a lack of recovery.It is the natural, predictable, and (by many)predicted result of the main european coun-tries’ deliberate policy of repressing aggre-gate demand. That policy was destined to

produce a financial crisis, because it wasbound to leave governments and banks withdepleted assets and larger debts. Despiteausterity, the forecast of this year’s UK struc-tural deficit has increased from 6.5% to 8%– requiring an extra £22 billion ($34.6 bil-lion) in cuts a year. Prime Minister DavidCameron and Chancellor George Osborneblame the eurozone crisis; in fact, their owneconomic illiteracy is to blame.

Unfortunately for all of us, the explana-tion bears repeating nowadays. Depressions,recessions, contractions – call them what youwill – occur because the private-sectorspends less than it did previously. This meansthat its income falls, because spending by onefirm or household is income for another. Inthis situation, government deficits rise natu-rally, as tax revenues decline and spending onunemployment insurance and other benefitsrises. These “automatic stabilizers” plug partof the private-sector spending gap.

True, if governments stop spending alto-gether, deficits will eventually fall to zero. Peo-ple will starve to death in the interim, but thebudget will be balanced. That is the crazy logicof current economic policy in much of europe

(and elsewhere). Of course, it will not be car-ried through to the bitter end. Too much willcrack along the way – the banks, the monetarysystem, social cohesion, the legitimacy of thepolitical regime. Our leaders may be intellec-tually challenged, but they are not suicidal.Deficit reduction eventually will be put intocold storage, either openly, as I would prefer,or surreptitiously, as is politicians’ way. In theUnited Kingdom, there is already talk of PlanA +. Those who see the need for such agrowth strategy, but who also want to helptheir friends, like the idea of tax cuts – espe-cially for the rich. This knocks a hole in cur-rent deficit-reduction plans, but, providedgovernment continues to cut spending, it hasthe benefit (from a conservative’s point ofview) of shrinking the state’s role over time.Apart from questions of fairness, cutting toptax rates is an inferior way to increase spend-ing, because the rich have a higher propensityto save. Tax reductions should be targetedspecifically at the poor if one wants themoney to be spent to stimulate the economy.In fact, the best option of all is for the govern-ment to spend the money itself. Governmentscan do this consistently with a medium-term

deficit-reduction plan by making a crucialdistinction between their budgets’ currentand capital accounts. The current accountcovers spending on services and perishablegoods that produce no assets. The capital ac-count is for buying or building durable assetsthat give a prospective future return. The firstis a charge on taxation; the second is not.

If today’s accounting rules are too in-sensitive to make this distinction, a separateentity could do the investing. A national in-vestment bank would be capitalized by thegovernment, borrow from the private sec-tor, and invest in infrastructure, housing,and “greening” the economy. This would si-multaneously plug a hole in demand andimprove the economy’s long-term growthprospects. There are signs that officials inthe UK and the United States are starting tomove in this direction.

If nothing works, it will be time to sprin-kle the country with what Milton Friedmancalled “helicopter money” – that is, put pur-chasing power directly into people’s pockets,by giving every household a spendingvoucher with an expiration date. This wouldat least keep the economy afloat pending the

development of the longer-term investmentprogram. It would be better if such schemescould be agreed upon by all by G-20 coun-tries, as was briefly the case in the coordi-nated stimulus of April 2009. If not, groupsof countries should pursue them on theirown. The european Union desperately needsa growth strategy. Its current bailout schemesonly help countries like Greece and Italy toborrow money cheaply in the face of prohib-itively high market interest rates, while theschemes’ insistence on more budget-deficitreduction in these countries will reduce eu-ropean purchasing power further. The recip-ient governments will have to cut theirspending; the banks will have to take largelosses. In the long run, the eurozone must berecognized as a failed experiment. It shouldbe reconstituted with far fewer members, in-cluding only countries that do not run per-sistent current-account deficits. everythingelse that has been proposed to save the euro-zone in its current form – a central treasury,a monetary authority that does more thantarget inflation, fiscal harmonization, a newtreaty – is a political pipe dream.

Robert Skidelsky, a member of theBritish House of Lords, is Professor

Emeritus of Political Economy at WarwickUniversity. A version of this article was

first published in Project Syndicate.

The wages of economic ignorance

the tRADekey PheNomeNoN


SOCIAl media has come of age overtime andnow it provides a powerful means to reachout and engage with online population in anextremely cost effective and efficient way.even as social platforms shift in popularity

or come and go, businesses can introduce themselves andinteract with those who share the same interests.

Savvy businesses are already using Facebook, twitter,youTube and so many other platforms to engage theiraudience. Now they have one more; Google+ your busi-ness. Google, a search engine we are so familiar with, re-

leased its social network inJune this year and was ask-ing enterprises and organi-sations to wait for using thesite for business purposes.last Monday (October 7,2011), Google rolled outGoogle+ pages for busi-nesses to create a presenceon the social networkingplatform for connectingwith their users locally andworldwide in a big way.Google+ is google’s answerto Facebook. like Facebook

pages, at Google + pages, businesses can share content- text, photos and video - to not only a network of con-tacts but to anyone using Google services. like Face-book, individuals can have a personal profile at Google+and a Page for local business, place, product or brand,company, institution or organisation. The page can alsosupport arts, entertainment, sports and much more.Overall, it is a social site to post information in differentformats for a cause. So, what is the difference? Whybusinesses should create pages at Google+ for what theyare already achieving at Facebook? A simple answer isthe penetration of the search results.

People search on Google billions of times a day.having Google+ pages can help people transform theirqueries into meaningful connections because Google is

bringing Google+ pages into its search results. Googlehas integrated + into its World Wide Web dominatingsearch engine. In addition, with Google+ direct con-nect, searchers can insert

a “+” before their query and jump directly to abusiness’s Google+ page. Type “+youTube” into aGoogle search box, for instance, and Google will takeyou straight to youTube’s Plus page. This is whereGoogle will have an advantage over Facebook or anyother social media platform. This ability alone givesGoogle+ an edge over other more familiar social net-works. This interesting and innovative feature can bea welcome mat for eager marketeers and is likely to putthem into motion to claim their own brand pages.

Another difference lies in counting Facebook likesand Google +1 that are considered as public endorse-ments. Presently, Facebook has more than 800 millionactive users (Google+ so far has only 40 million in lessthan six months), 50% of them log on to Facebook inany given day and an average Facebook user has 130friends. It will not be an exaggeration to add that al-most everyone online has a Google account. For peoplethat already use features like Gmail, Google Docs andGoogle Calendar, the inevitable integration betweenthese tools and Google Plus is useful. But let me hastento add that counting number of likes or +1 is not ameasure. Instead, businesses that want to track howwell their page are doing can simply use Google+search to look for keywords for their products or serv-ices. Businesses can also use Google Analytics to meas-ure the popularity of their page. Facebook is for people(family and friends) you already know and Google+ isfor netizens who are trying to find relevant informationonline. Marketeers need to pay very close attention be-cause Google+ pages are likely to change users’ searchexperience and web masters’ search engine optimisa-tion forever. Instead of being an aggregator or

a medium to find relevant information about yourproducts and services, Google+ is poised to be both theplatform and means of distribution for content.

While everyone in the tech space is exploringGoogle+ and weighing its potentials, one thing is sure,it is better to claim your own business space withGoogle+ pages and have a presence on it for the backlink to Google. That will make your business moreavailable on Google. Not only that, it is more in linewith engagement marketing.

The writer is Deputy Controller of Examinationsat Lahore School of Economics. He blogs at

http://logicisvariable.blogspot.com/ and can bereached at [email protected]

NeWS reports highlighting thecommunication breakdownbetween ministries ofcommerce and textile, that tooregarding the crucial MFN

debate, are worrying. And it’s no lessunsettling that the initiative with India iscause for confusion at the highest levels tothis day. Usually, we’d expect landmarkdecisions involving the eastern neighbour tohave the highest level sanction fromIslamabad, and as such vigorously debatedwith all relevant ministries and stakeholders.Also, since the MFN argument revolvesaround trade, and textile is our prime exportearner, the ‘solo flight’ charge leveled againstthe commerce ministry defies explanation.

The division betrays something farmore serious than ad hoc decision makingat the top. It shows that not only is there nocredible long-term policy, but moresurprisingly, there seems little regard forthe government’s earning capacity. At therisk of repetition, with textile importantenough to have its own ministry, leaving it

out of crucial trade talks is akin tomaneuvering for political leverage even atthe cost of loss of revenue. Already, therehas been increasing talk of too manynegative spill-overs of the MFN initiativefor the win-win hype to be accepted.

Considering the government’s precariousfiscal situation, it ought to have posturedtowards bolstering manufacturing andindustry with the specific purpose ofincorporation value addition in the exportmix. Not only has no particular patronagebeen accorded to improving the export base,it is becoming abundantly clear that there arefar too many division within the governmentmachinery for trade and revenue generationto be given the attention it deserves anytimesoon. And with the other main earner, taxcollection, also badly compromised, themiddle and lower income groups can lookforward to yet more austerity as the biggerboys play politics. While settling thisargument, those at the helm should remindall parties that they are on the same team, andshould work accordingly.

On the same team?

Savvy businesses arealready usingFacebook, twitter,YouTube and so manyother platforms toengage their audience

Social media

for business

S A J Shirazi

Devil wears Prada

The article raises a number of important is-sues. however, the economically strainedand crises ridden people, like myself, haveredefined luxury/ fashion as per the depthof their wallets. In a way the fashion indus-try is increasing the gap between the richand the poor, the effects may not be imme-diate, but the class difference will come onsurface in the long run. The size of thispond is getting bigger and so are the num-ber and size of fish in it, there is a lot ofbusiness potential here that can be furtherexploited- Ironic how we are an intolerantbunch of mullahs at one extreme and fash-ionistas at the other.

DoDAR KHAn

ISLAMABAD

Economic ties with South Korea

I believe the South Korean ambassador’srecent proclamations are a positive note.South Korea has been one region that wehave criminally neglected and hence suchpositive exclamations from their diplo-mat bode well for the bilateral ties. Whilethe MFN debate continues to hog theheadlines, we need to ensure that we con-tinue to explore other areas and look toenhance our trade with other countries aswell. South Korean ambassador’s propos-als were also meticulously thought out.hence, it seems as if he wasn’t merelygiving the speech for the sake of it he ac-tually wanted things to ameliorate. let’shope we respond positively.

KASHIf IMRAn

kARAcHI

E D I T O R I A L

Europe and the bitter Beijing pill

LeGeND has it that the piedpiper of hamelin was hiredby a town to purge their lo-cality from rat infestation in1284. The pied piper duly en-

snared the rats with the tune of his piper andlured them all away into the Weser river.however the sting in the tale came when theinhabitants refused to pay back the promisedsum to the piper and in turn invoked hisfury-laden antagonism which eventually cul-minated in the pied piper baiting away thechildren of the town. With eurozone border-

ing on a rat-plagued dominion, a south-eastAsian piping giant has all the rhythmic forceto drive away the rats. But is the panic-riddeneurope ready for the payback?

There are quite a few pipers that arebeing touted as europe’s saviours. In fact ifone were to traverse time dilations and moveback in time, europe has proven itself to bethe battle ground for all sorts of piping rival-ries. Although Uncle Sam has been piping allover the globe for the last hundred years orso, 1930’s young Plan or 1947’s Truman Doc-trine are a couple of melodies that bear anuncanny resemblance to the modern dayscenario in europe. Truman Doctrine, inparticular, aided european cause after WorldWar II’s aftereffects had taken their toll; andit proved to be a metaphoric stick used toward off any communist penetration withinUncle Sam’s musically influenced realms.Now, just as the US flexed its economic mus-cle to enhance its hegemony over global mat-ters back then, the gauntlet has been throwntowards China in 2011.

There are quite a few versions of the‘Pied piper of hamelin’ tale. One of themsuggests that the piper amplified his de-mands, from those that were settled prior ratcleansing. Another version narrates the factthat it was actually the town residents whorefused to pay after the pied piper had dugthem out of their quagmire. either way, eu-ropeans should be wary of the repercussionsthat accompany any salvage act.

Beijing has been parrying away sugges-tions that it is willing to be europe’s libera-tor-in-chief. But with Chinese stake in theglobal economic order and the fact thatChina itself has been the major beneficiary ofsuch an order; Beijing might have to rethinkits reluctance. China’s foreign exchange re-serves tower above the rest, and hence theirfortunes are intermingled with the rest of theworld. eurozone being Beijing’s most signif-icant trading partner – with 20 per cent ofthe country’s total exports – connotes that itsstability is of paramount importance to Chi-nese hierarchy. Chinese growth could drop

by seven per cent andreal GDP growth by oneper cent, owing to a oneper cent GDP decline inthe european Union,according to estimates.

There’s no denyingthe fact that China hasthe wherewithal toconjure up a bailoutpackage. But the realopportunity lies in in-vesting in eU and en-hancing domestic consumption ofeuropean products. The Asian pied piperhas quite a few harmonies up its sleeve thatmight prove to be europe’s lifeline. It canaid europe bilaterally by back-stopping thestability facility. It could even purchasebonds from countries like Italy and Spainat generous rates or supply finance viaIMF. In return China could reign supremein financial matters, especially by aug-menting its influence over IMF and its gov-

ernance. however, whatmight pinch the euro-peans is if the rescue acthas a political tradeoff.

With China’s finan-cial sway, the europeanpayback was never goingto be a strictly monetarymatter – China’s euro-pean investment wouldinevitably have a pecu-niary advantage, with orwithout europe’s intent.

however influencing political matters –like asking France to not invite Dalai lama,or countering U.S decision-making in Italy– could be too big a price for europe to pay.Salvation has a price tag, the people ofhamelin learned it the hard way; europewouldn’t want to follow suit.

The writer is Sub-Editor, Profit. He can bereached at [email protected]

Kunwar Khuldune Shahid

For comments, queries and contributions, write to:

email: [email protected] Ph: 042-36298305-10 Fax: 042-36298302 website: www.pakistantoday.com.pk

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We d n e s d a y, 2 3 N o v e m b e r, 2 0 1 1

With Eurozonebordering on a rat-plagued dominion,a south-east Asianpiping giant has allthe rhythmic force todrive away the rats

kuNwAR khulDuNe ShAhIDSub-Editor

mAheeN SyeDSub-Editor


Wednesday,23 November,2011

04news

Secretary Petroleum, ejaz Chaudhary

Pakistan needs to discover more oiland gas in the country to addressthe mounting challenges

KSE witnesses record low activityKARACHI

STAff REPoRT

KArAChI stocks market re-mained bearish Tuesdaywith the index nose-diving

by 127.79 points or 1.04 per cent onthe back of international and domesticfactors, viewed the market observers.

The trading volumes onceagain plunged to a record 28.368million shares against 31.097 mil-lion of the previous day. The mar-ket analysts believe that decline inglobal stocks and commodities dueto prevailing europe and US debtcrises coupled with the traders’cautious approach towards theState Bank of Pakistan’s discountrate announcement at the end ofthis month played havoc with theinvestors’ confidence on the day.

The day saw the benchmark,KSe 100-share index, dipping to11,767.00 points as against11,894.79 points of Monday. The

intraday high and low wererecorded, respectively, at 11,894.79and 11,751.41 points. “Bearish ac-tivity in stocks was witnessedacross the board with record lowactivity at KSe,” said AhsanMehanti, a director at Arif habibInvestments. The shares traded atthe ready-counter during the daytotaled at 28.368 million, some2.729 million down from 31.097million shares traded a day earlier.

The trading value, however,improved and swelled to rs1.3 bil-lion compared to the previousrs1.1 billion. The market capitali-sation accounted for rs3.061 tril-lion, about one per cent downwhen compared with rs3.093 tril-lion of the previous day.

Some 320 scrips were traded,of which 73 gained, 150 declinedand 97 remained unchanged.Mehanti said that the head-on dipin the KSe 100-share index wasstimulated by the fall in global

stocks and commodities on theUnited States and european debtfears that affected sentiments ofthe risk-averse investors.

“Fall in global stocks and com-modities on prevailing europe andUS debt crises played a catalystrole in the steep fall witnessed atthe bourse,” the analyst saidadding the investors stayedalarmed despite strong funda-mentals in some local commoditystocks. “(The) investors remained

cautious ahead of SBP policy an-nouncement next week,” Mehantisaid. The analyst said even thehopes for an ease in circular debtconcerns in the country could nothelp restore the investors’ confi-dence. Fauji Fertiliser Bin Qasimwas volume leader of the day see-ing 2.39 million of its sharestraded at the highest per sharerate of rs59.65.

The fertiliser giant’s share pricedepreciated by rs1.58 and con-

tracted to rs58.04 after opening atrs59.62. Other scrips that weremarked among the top 10 besttraded included Bank Al-Falah, Fa-tima Fertiliser Company, lottePakPTA, National Bank of Pakistan,NIB Bank limited, J.O.V and CO,Fauji Fertiliser XD, MCB Bank lim-ited and engro Corporation.

These scrips counted theirtraded shares, respectively, at 2.3million, 2.3 million, 1.5 million, 1.3million, 1.1 million, 0.943 million,

0.919 million, 0.895 million and0.892 million. The turnover at fu-ture market also witnessed a down-ward trend and slid to 6.1153million shares against the previous6.773 million. The futures scripsthat were rated as plus numbered10, with 129 rated as minus andone unchanged.

NBP-NOV was the volumeleader on the future market hav-ing 1.026 million of its sharestraded during the day.

INDEX TUMBLES BY 127 POINTS

leather industry fearslosses due to load-sheddingKaracHi: The export oriented leather sector hasgiven SOS to federal government to save the industryfrom collapse due to massive load-shedding resorted byKeSC in industrial areas. Chairman Pakistan TannersAssociation (PTA), M Khurshid Ahmed said at thisjuncture, losses of millions of rupees are feared inTannery Zone in Korangi industrial area due to load-shedding. “Power outage for over 10 to 12 hours perday will ruin all the raw material lying at the tanneriesworth millions of dollars and leather exporters willnot be able to fulfill their commitment in theinternational market,” Khurshid said adding thatKeSC should earnestly declare Tannery Zoneexempted from load-shedding. STAff REPoRT

President ABF concernedover falling economic indicatorslaHore: President American Business Forum(ABF), Salim Ghauri has expressed concerns overdwindling economic indicators, including 61 per centdecline in foreign private investment during the fourmonths of current fiscal and increase in NonPerforming loans (NPls) to rs629 billion. Thissituation is likely to dampen growth of economy furtherif no timely action is taken by concerned authorities, hesaid. Salim said Pakistan should make efforts to keepits house in order to rebound economic activity oncesluggish trends are over. President ABF saidgovernment should launch image building campaign ina situation when security situation has improvedimpressively. On the rising NPls, President ABF saidNPls are likely to catch up further due to deterioratingstate of different industrial sectors amidst short supplyof energy. energy situation is yet in doldrums and theproject of rental Power Plants (rPPs) has also beenscrapped after embezzlement reports followed by apexcourt intervention. STAff REPoRT

FBR should address incometax issues of small traders: ICCIislamaBad: Although the documentation ofeconomy is a step forward towards increase in tax toGDP ratio, but there was a great trust deficit thatexisted between the tax payers and Federal Board ofrevenue's (FBr) tax officials. Vice PresidentIslamabad Chamber of Commerce and Industry(ICCI), Shahid Zaman Shinwari said requirement ofannexure D relating to the personal expenditures ofindividual tax payee, that includes details ofexpenditures on personal phones and other utilities,children education and other personal expenditures,have been demanded. The small traders are frightenedto provide all this detail as this step may also lead totax harassment. On demand of small traders, ICCIurged FBr to take small traders in confidence so thatthey can file their returns and deposit tax ingovernment treasury. STAff REPoRT

Logistics experts apprehensiveabout lack of government support

LAHoRe

STAff REPoRT

PAKISTAN’S leading lo-gistics and supply chainmanagement expertshave observed that gov-ernment’s lack of sup-

port to this important sector has beencausing a loss of two per cent of GrossDomestic Product (GDP) per annum.

They were addressing participantsof 1st International Conference andexhibition on logistics and SupplyChain Management. The conferencewas jointly organised by Pakistan In-ternational Freight Forwarders Asso-ciation (PIFFA), Air Cargo AgentsAssociation of Pakistan (ACAAP) andPublicity Channel here at a local hotel.Vice President of SAArC Chamber ofCommerce and Industries Iftikhar AMalik inaugurated conference.

Iftikhar A Malik, while speakingas chief guest, termed logistics andsupply chain as the lifeline of economyin the country. he said floods haddamaged road infrastructure, whichinflicted a heavy loss on road trans-portation of goods.

however, he also expressed hisconcern over lack of initiative on part ofbusiness community to improve air,sea, and rail and road logistics and sup-ply chain system in the country. heurged private sector to get up and facechallenges rather than look for short-cuts. “If a warehouse can be establishedacross the border, then why are freightforwarders sleeping here?” he asked.he added that business communityneeded to minimise inventory and be-come the doer and deliverer.

While outlining problems facedby logistics and supply chain man-agement, Moin Ahmad Malik, aleading logistics expert and formerPIFFA Chairman, revealed thatIndia had been the top ranked na-tion in the logistics hub owing to im-plementation of government’ssupportive policies and timely deci-sions. Pakistan, on the contrary, waspositioned at the bottom among at-tractive logistics hub in South eastAsian countries, he added. Althoughtrade with India will open opportu-nities but, he believed, border facil-ities were least facilitating regionaltrade. Imports were much higher

than exports, which cause tradedeficit. he said railways couldn’teven cater passenger transportationleave alone freight transportationwithin the country.

he said only available option ofgoods transportation was throughtrucking system, which he believed,had also been disintegrated after thepresent government withdrew previ-ous government’s waiver of 16 to 17per cent on trucking. This increasedcost per trucking unit up to 100 percent i.e. rs1.7 million per year, headded. he said trucking was an un-or-ganised sector and corporate sectorwas not ready to take over this modeof transportation for the simple rea-son that government had completelyignored this sector.

“The government policies reflectprogress by taking one step forward andfive steps back in this sector,” he said.he added that rising cost of fuel andelectricity coupled with decades oldtrucks and bad road infrastructure werebadly hurting progress of this sector.

he said up to 30 to 35 per cent ofthe perishable goods like fruits and veg-etables during transportation from

farm to market were lost due to lack ofcold chain system. he emphasised theneed to prepare trained human re-source by establishing vocational train-ing institutes to streamline roadtransportation sector in the country.

he stressed the need to make legis-lation to regulate carriage of goodsthrough air, sea, rail and road routeswithin and outside the country. “It willhelp put in place a regulatory mecha-nism for transport logistics and supplychain in the country,” he stressed, andurged government to recognise freightforwarding as an industry.

Tahir Malik, Chairman ACAAP,also criticised government for fail-ing to cater to improve air freight tosupport business community, whichwas contributing billions in taxesevery year. he said national carrierdidn’t have a single cargo aircraft,and no proper cargo complex wasbuilt in Pakistan till 2001. he addedthat non-availability of shells at airfreight units for perishable goods,which resulted in decay of a largequantity of items like mangoes andkinnows are major hurdles towardsprogress as well.

India buoyant about mFNsialKot: high Commissioner ofIndia in Pakistan Mr SharatSabharwal has said India was keento increase mutual trade betweenPakistan and India. Boostingmutual trade and promotingstrengthened trade ties withPakistan was the top priority ofIndia, as India was ready toenhance mutual trade volume fromexisting $2 billion to $6 billion.India was actively building up itstrade and economic relations withPakistan and other countries onpriority basis, besides, ensuring theprovision of maximumopportunities to Pakistan by India.he stated this while addressing animportant meeting of Sialkotbusiness community held at SialkotChamber of Commerce andIndustry (SCCI). ARIf MEHMooD SHEIkH

LAHoRe

IMRAN ADNAN

PUNJAB Agriculture and MeatCompany (PAMCO) is goingto set up imported olive,

seedless citrus and grape nurseries, incollaboration with private sector, tostart mass scale production of certi-fied imported fruits.

Speaking to Profit, PAMCO Chiefexecutive Officer Dr hamid Jalil re-vealed PAMCO was going to developPotohar region, including Attock,rawalpindi, Jehlum, Chakwal andKhushab, as olive production zone. Sim-ilarly, seedless citrus zone would be es-tablished in Thal region on fertile landsof Bhakhar and layyah, while grapesvalley would be developed in sweet

water zone of Cholistan, which sur-rounded over Bhawalnagar, rahim yarKhan and Bahawalpur.

In the initial phase, he said,PAMCO had invited expression of in-terest (eoI) from international andlocal firms for provision of certifiedmother plants that have proven fruitquality and international recogni-tion. he said project would be run onpublic-private-partnership model.PAMCO would provide these im-ported mother plants and technicalexpertise to private sector free of costfor development of local nurseries,he maintained. Speaking about olivedevelopment locally, Dr Jalil saidPAMCO had selected nine interna-tionally recognised olive varieties, in-cluding Moralolo, Pendolina,

Frontoio, Coratina, leccino, Otto-bratica, Nabali, Gemlik and Sevil-lano, for domestic production.Initially, around 500 disease freeolive mother plants would be im-ported from different parts of theworld. These would later be repro-duced in locally established nurseriesfor mass production, he added.

Similarly, seedless citrus vari-eties, including Kinnow Mandarin,Washington Navel and Valencia late,and grapes varieties, like ThompsonSeedless, Kings ruby and Perlette,are being imported. Most motherplants would be imported fromTurkey, Italy, Spain, egypt, Tunisia,etc and strict certification and photo-sanitary compliance would be en-sured, he underscored.

PAmCo to promote mass production of fruits


05


news

CORPORATE CORNERSchneider electriclaunches new business line lAhOre: Schneider electric, a global specialist inenergy management solutions, has announced thelaunch of a new business line - ‘Schneider electricSecure Power Systems for Industry andInfrastructure’, providing fast and effectivesolutions for large facilities to increase poweravailability and systems uptime of mission criticalapplications. Schneider electric’s new businessline comes as part of its strategy to expand itsproducts and services range for industries andfacilities beyond data centers. PRESS RELEASE

unifico Copper FZC llC announcesopening of regional officeslaHore: Pakistani entrepreneur’s venture,Unifico Copper FZC llC, has announced theopening of its two million square meter regionaloperating offices and processing facility for copperand gold in ras Al Khaimah. The technologicallyadvanced processing facility, which is expected tobe operational by the fourth quarter of 2013, willeventually supply up to 500,000 tonnes of lMe(london Metal exchange) standard coppercathodes a year to Asia and Middle east. UnificoCopper Chairman, Khurshid A Shah said, “Thelevel of support extended by supreme councilmember and ruler of ras Al Khaimah Sheikh Saud

Bin Saqr Al Qasimi and the team at ras AlKhaimah Investment Authority (rAKIA) werecertainly commendable, and reaffirms all thepositive facts we had been learning about theemirate of ras Al Khaimah..” PRESS RELEASE

haier launches nationwidepromotional campaign

laHore: haier Pakistan recently launched theirnationwide promotional campaign, “haier PakistanWashing Machine Campaign”. The promotion was agrand success as hundreds of passionate haiercustomers participated and many won various prizes,including instant rewards in cash and kind. At the endof the promotional campaign, a mega prize wasannounced through a lucky draw. The mega luckydraw winner was Mr Muhammad Tariq Javed fromlahore who became a proud owner of Suzuki Mehranwhich was handed over to him at an impressive

ceremony to mark the closure of the three-month longpromotional campaign. PRESS RELEASE

NuSt arranges conference onApplication and methods of PhysicsislamaBad: A two-day Conference onApplication and Methods of Physics was arrangedby National University of Sciences and Technology(NUST) at their main campus. The conference wasorganised by Center for Advanced Mathematicsand Physics (CAMP), a constituent institute ofNUST. The aim of the conference was to provide aforum where the new developments occurring inthe domain of physics could be discussed onregular basis. PRESS RELEASE

Cathay Pacific addsmore destinations to JapanKaracHi: Cathay Pacific Airways todayannounced a further expansion of its code-shareservices with one world alliance partner JapanAirlines to cover more destinations within Japan.Under the enhanced arrangement between the twoairlines, Cathay Pacific's “CX” code will be placedon selected Japan Airlines domestic flightsbetween haneda Airport in Tokyo and eightJapanese cities – Izumo, Miyazaki, Misawa,Matsuyama, Nagasaki, Oita, Tokushima and Ube;between Tokyo’s Narita Airport and Nagoya; and

between Sapporo and Nagoya. PRESS RELEASE

Annual technicalConference 2011 ends todayislamBad: Annual Technical Conference (ATC)2011 organised by Pakistan Section of Society ofPetroleum engineers (SPe) and PakistanAssociation of Petroleum Geoscientists (PAPG)was inaugurated on November 22 at Serena hotel,Islamabad and will end today with a paneldiscussion drawing recommendations for thechallenges faced by the country in meeting theenergy demand and supply. PRESS RELEASE

kARAcHI: chairman, Travel Agents Association ofPakistan (TAAP), Yahya Polani, presenting a souvenirto the Ambassador of the Republic of Indonesia toPakistan, H E Ishak Latuconsina in 3rd IndonesianSolo Exhibition. Also seen present at the occasionare Sindh IT Minister, Raza Haroon, Indonesianconsul General, Rossails R Adenan and AbdulMajeed Haji Muhammad. PRESS RELEASE

The US economy won't begood next year and Europewill be worse, meaning weakexternal demand for China

Xia Bin, head of Financial Research Center

SInGAPoRe

AfP

GrOWTh in east Asian economies will slow next year withdemand from key export markets in the United States andeurope falling as they struggle with their debt crises, the World

Bank warned Tuesday. however the region's large foreign reserves andcurrent-account surpluses will cushion it from the impact of anotherglobal financial crisis, while the bank said China could pick up some ofthe slack from the West.

In its biannual report the Washington-based bank said developingeast Asia eyes growth of 8.2 per cent this year and 7.8 per cent in 2012,down from 9.7 per cent in 2010. "lower growth in europe in the courseof fiscal austerity and the banks' needs to increase capital coveragewould affect east Asia," said Bert hofman, the bank's chief economistfor the east Asia and Pacific region. "less credit from european bankscan also affect capital flows to east Asia, but high reserves and currentaccount surpluses protect most countries in the region against theimpact of possible renewed financial stress." According to the bank, theregion - which includes China, Indonesia, Malaysia, the Philippines,Thailand, Vietnam and Cambodia -- had foreign reserves, excludinggold, totalling $4.9 trillion as of September. China alone has foreignreserves of $3.2 trillion.

The region's export-led economies have already been affected by theongoing turmoil in the West with its industrial sectors, especiallyelectronics, facing weaker demand, the World Bank said.

It added that flooding in several countries, including Thailand,contributed to the expected slowdown as companies in the region wereforced to stop production due to broken supply lines and partsshortages. With the US economy struggling and europe grappling with acrippling debt crisis, China has emerged as a major export market thatwould be able to fill in some of the gaps in demand, the World Bank said.The Chinese economy is still expected to expand at a solid 9.1 per centthis year despite Beijing's efforts to rein in inflation -- including raisinginterest rates -- with growth expected at 8.4 per cent next year, it said."China's growing consumer goods market represents a potentiallysignificant new opportunity for east Asian exporters, if it continues toexpand from its low base of just two per cent of the world consumergoods market," it said. China's share of global imports has grownsteadily and it now buys as much as the european Union, the bank said.For the short term, the main challenge for east Asia is how to strike abalance between stimulating growth and fighting the effects of the globaluncertainty, the bank said. The region's policymakers "are likely to holdoff further policy tightening and stand ready to act should negativeshocks to growth occur or in the unlikely event of a disorderly resolutionof the eurozone debt problem," it added. While fiscal positions are not asstrong as they were before the 2008 meltdown, most middle incomecountries in the region still have room for stimulus packages should itbecome necessary, the bank said. For the medium to long term, however,east Asian policymakers must implement further reforms that will boostdomestic demand and productivity. "higher investments ininfrastructure, education and social security systems can help countriesincrease productivity and move toward higher value added production,"said senior economist ekaterina Vostroknutova, the report's lead author."Any possible stimulus programs should be fiscally sustainable, well-targetted and directed at promoting the structural transformationneeded for stronger, domestically driven growth."

tAIPeI

REUTERS

ChINA'S trade bal-ance faces the risk ofsliding into a deficitfor the first time intwo decades in 2012

as export demand in europe andthe United States slumps, an aca-demic adviser to the central banksaid on Tuesday.

China needs a "very proac-tive" fiscal policy to spur domes-tic demand next year amidweakness in Western economies,Xia Bin told reuters in an inter-view late on Monday during avisit to Taipei to promote his newbook. But he also said that theworld's No.2 economy will notloosen monetary policy, which hesaid now has "about the righttone." "The U.S. economy won'tbe good next year and europewill be worse, meaning weak ex-ternal demand for China. Wecan't rule out the possibility of atrade deficit," Xia said.

"To increase domestic de-mand, fiscal policy must be veryproactive, reform of the tax sys-tem should be speeded up andwages raised to stimulate con-sumption," he added. he did notgive a forecast for any deficit.

Xia, head of the financial re-search institute at cabinet thinktank Development researchCenter, sits on the 15-membermonetary policy committee ofthe central bank but does nothave real influence on key deci-sions on interest rates or China'syuan currency.

The People's Bank of Chinahas loosened credit conditionsrecently to help small firms andpromised to "fine-tune" policyif needed to support economicgrowth, which slowed in thethird quarter to 9.1 percent, itsweakest in more than two

years. But, barring a suddenand sharp blow to the economy,more aggressive policy easingsuch as a cut in banks' reserveratios or interest rates is seenas months away. Meanwhile,the cash-rich government isflexing its muscles by offeringtax cuts to companies.

SLOWER YUAN RISE

Despite faltering Western de-mand, China's economy is stillseen as on track to grow over 9percent this year. Xia said Chinaexpects to maintain economicgrowth at 8 percent to 9 percent in2012 and sees further inflationarypressures, though Beijing will lookto keep price rises to 2 percent to3 percent next year. Annual infla-tion hit a three-year high of 6.5percent in July. Though it haseased in recent months, it remainselevated at 5.5 percent.

China's commerce ministrywarned last week that the out-look for exports could be grim forthe rest of this year and the earlypart of next, as europe strugglesto contain its debt crisis and the

United States seeks to spur itsfragile recovery.

China's imports surged 28.7percent in October while exportsgrew at 15.9 percent, their slow-est rate in months, suggestingBeijing's efforts to tilt the econ-omy toward domestic demandmay be offsetting the externalweakness that has dragged oneconomic growth this year. Thatcapped October's trade surplusat $17 billion.

The government expects thefull-year trade surplus to narrowto around $150 billion in 2011from last year's $183 billion, thethird straight year of decline.

Despite the global gloom,Xia's view of a possible tradedeficit remains a minority one.

last month, Wei Jianguo, aformer vice commerce ministerand secretary general of think-tank the China Center for Inter-national economic exchanges,also raised the possibility[ID:nl3e7lI00G]. however,most economists say that whilethere is little doubt the trade sur-plus will continue to narrow, itmight take a few more years for

China to see a full-year tradedeficit, unless exports collapse.

Also, there may be limitedroom for the government to spurdomestic demand as economicgrowth slows. The massive tradesurplus has long been a source offriction with the United States andChina's other major trading part-ners, many of whom complain thatBeijing keeps its yuan currencyundervalued to boost exports. ButU.S. trade and employment prob-lems would not be solved by evena major appreciation of China'syuan versus the dollar, ChinesePresident hu Jintao was quoted assaying last week.

The yuan has gained about40 percent in real effective ex-change terms since Beijing aban-doned its peg to the U.S. dollar in2005, and has rallied almost fourpercent against the dollar innominal terms this year. On thegrowing internationalization ofChina's yuan currency, Xia saidthat by 2020 the yuan will makeup about 3 percent to 5 percentof the world's reserve currencies.But he saw the process only hap-pening slowly.

east Asia cushioned fromglobal crisis: world Bank

China may post tradedeficit next year: adviser


top 5 perForMers sector wiseSymBol oPeN hIgh low CuRReNt ChANge volume SymBol oPeN hIgh low CuRReNt ChANge volume

Food ProducersAL-Noor Suger Mills 55.09 55.09 52.35 55.09 0.00 35Bawany Sugar 11.10 12.00 11.10 11.10 0.00 1Clover Pakistan 51.41 53.00 51.41 51.41 0.00 100Colony Sugar Mills 1.90 1.90 1.63 1.63 -0.27 14,431Crescent Sugar 12.00 13.00 12.99 12.99 0.99 771

Household GoodsAL-Abid Silk Mills 23.34 23.60 23.34 23.34 0.00 2Diamond Ind. 8.20 9.03 8.20 8.20 0.00 2Hussain Industries 3.90 3.90 3.80 3.90 0.00 6Pak Elektron Ltd. 4.20 4.40 4.20 4.25 0.05 8,650Tariq GlassXD 8.65 8.89 8.65 8.65 0.00 10

Personal GoodsAmtex Limited 1.31 1.44 1.30 1.38 0.07 26,864Artistic Denim XD 19.50 19.45 19.00 19.01 -0.49 74,958Ashfaq Textile 7.10 8.10 8.10 8.10 1.00 5,000Azam Textile 1.35 1.40 1.34 1.35 0.00 5,200Azgard Nine 3.71 3.85 3.62 3.66 -0.05 672,596

Future ContractsAHCL-DEC 29.94 29.94 29.80 29.89 -0.05 9,000AHCL-NOV 29.94 29.76 29.55 29.61 -0.33 34,500ANL-DEC 3.74 3.80 3.71 3.75 0.01 1,286,500ANL-NOV 3.74 3.80 3.65 3.65 -0.09 1,354,000ATRL-DEC 127.13 127.50 127.00 127.23 0.10 12,000

Pharma and Bio TechAbbott Laboratories 102.51 103.20 102.50 102.74 0.23 6,920Ferozsons (Lab) Ltd. 76.66 78.00 76.66 76.66 0.00 100GlaxoSmithKline Pak. 69.25 69.90 69.00 69.00 -0.25 3,312Highnoon (Lab) 29.29 29.50 28.70 29.38 0.09 3,502IBL HealthCare XD 12.78 13.29 12.80 13.18 0.40 9,773

Fixed Line TelecommunicationP.T.C.L.A 10.80 10.95 10.70 10.74 -0.06 873,286Pak Datacom LtdXD 34.50 34.50 34.00 34.50 0.00 50Telecard Limited 0.96 1.00 0.89 0.90 -0.06 179,056Wateen Telecom Ltd 1.85 2.00 1.82 1.88 0.03 2,098,153WorldCall Telecom 1.11 1.17 1.05 1.06 -0.05 74,429

ElectricityGenertech 0.36 0.42 0.32 0.32 -0.04 3,307Hub Power Co.XD 37.11 37.15 37.00 37.01 -0.10 416,249Japan Power 0.68 0.68 0.64 0.65 -0.03 164,679K.E.S.C. 1.63 1.71 1.63 1.70 0.07 232,001Kohinoor Energy 17.01 17.00 16.61 17.00 -0.01 300,022

BanksAllied Bank Ltd 62.23 62.80 62.10 62.23 0.00 216Askari Bank 10.95 11.00 10.80 10.86 -0.09 77,973B.O.Punjab 5.69 5.80 5.62 5.65 -0.04 350,983Bank Al-Falah 12.07 12.31 12.00 12.04 -0.03 5,499,424Bank AL-Habib 29.87 30.00 29.75 30.00 0.13 71,128

Non Life InsuranceAdamjee Ins 47.94 47.59 46.80 47.07 -0.87 15,293Atlas Insurance 36.49 36.49 35.27 36.49 0.00 2Century Insurance 7.23 6.80 6.36 6.51 -0.72 10,100Cres.Star Insurance 2.40 2.99 2.00 2.01 -0.39 1,123EFU General Ins 36.61 36.51 36.50 36.51 -0.10 1,713

Life InsuranceAmerican Life 14.50 14.50 13.50 14.50 0.00 2East West Life Assur 1.40 2.34 1.40 1.40 0.00 1EFU Life Assur 65.53 68.80 65.53 65.53 0.00 157

Financial ServicesAMZ Ventures A 0.35 0.33 0.25 0.25 -0.10 36,032Arif Habib Investmen 16.40 16.40 15.56 16.40 0.00 101Arif Habib Ltd. 16.03 16.29 15.96 15.97 -0.06 2,207Dawood Cap.Man XB 1.25 1.29 0.75 1.25 0.00 4Dawood Equities 1.09 1.07 0.83 0.86 -0.23 631

Equity Investment Instruments1st.Fid.Leasing Mod 1.52 1.53 1.53 1.53 0.01 2,500Allied RentalModXDXB 21.64 22.45 21.64 21.64 0.00 1Atlas Fund of Fund 5.86 5.85 5.85 5.85 -0.01 29,600B.R.R.GuardianXD 2.00 2.00 1.72 2.00 0.00 493Cres. Stand.ModXD 0.49 0.44 0.34 0.42 -0.07 69,931

MiscellaneousCentury Paper 13.24 13.69 13.36 13.50 0.26 4,852Pak Paper Prod. 30.60 31.95 31.90 30.60 0.00 108Security Paper 35.20 36.40 36.39 36.40 1.20 520Pakistan Cables 32.17 30.60 30.60 32.17 0.00 170P.N.S.C.XD 15.71 15.99 15.01 15.07 -0.64 11,725Pak.Int.Con. SD 70.00 70.00 69.00 70.00 0.00 1,950TRG Pakistan Ltd. 1.59 1.60 1.46 1.48 -0.11 862,396Murree BreweryXDXB 70.00 72.50 69.00 69.99 -0.01 1,748Shezan Inter.XD 115.96 117.56 117.56 115.96 0.00 1Hala Enterprise 7.50 6.76 6.50 6.58 -0.92 516Pak Elektron Ltd. 4.25 4.55 4.20 4.20 -0.05 3,302Tariq GlassXD 8.65 8.49 8.35 8.65 0.00 290Grays of Cambridge 25.00 25.00 24.00 24.00 -1.00 1,005Khyber Tobacco 28.00 28.00 26.70 26.70 -1.30 2,600Pak Tobacco Co. 61.65 59.00 58.57 61.65 0.00 422Shifa Int.Hospitals 29.73 30.44 28.25 30.14 0.41 4,260Hum Network XD 15.50 15.97 14.52 15.04 -0.46 7,642Media Times Ltd 7.96 8.90 8.90 7.96 0.00 3P.I.A.C.(A) 1.98 2.12 1.95 2.04 0.06 7,604P.T.C.L.A 10.74 10.85 10.52 10.60 -0.14 173,093Telecard Limited 0.90 0.94 0.88 0.88 -0.02 156,263Wateen Telecom Ltd 1.88 1.95 1.85 1.90 0.02 150,499WorldCall Telecom 1.06 1.10 1.05 1.08 0.02 170,316Sui North GasXDXB 17.44 17.43 17.13 17.17 -0.27 25,796Sui South GasXDXB 20.00 20.19 19.80 19.88 -0.12 32,556

SymBol oPeN hIgh low CuRReNt ChANge volume

Oil and GasAttock Petroleum 411.14 412.75 406.10 406.99 -4.15 18,325Attock Refinery 126.72 127.68 125.01 125.37 -1.35 226,908Burshane LPG XD 23.22 23.89 23.22 23.22 0.00 1Byco Petroleum 7.20 7.38 7.19 7.25 0.05 1,147,404Mari Gas Co.XB 96.00 97.00 93.15 93.74 -2.26 47,325

ChemicalsAgritech Ltd. 15.00 15.48 15.00 15.00 0.00 1,002Arif Habib CoXDXB SD 29.85 29.90 29.45 29.51 -0.34 252,944Bawany Air Products 5.00 5.25 5.00 5.25 0.25 1,000Clariant Pakistan 156.34 156.74 155.00 155.18 -1.16 2,897Dawood Hercules 39.08 39.35 38.50 38.62 -0.46 15,788

Industrial metals and MiningDost Steels Ltd. 1.51 1.59 1.46 1.48 -0.03 71,503Huffaz Seamless Pipe 9.20 9.48 9.06 9.06 -0.14 2,002Int. Ind.Ltd. 33.86 33.00 32.18 32.53 -1.33 16,754Inter.Steel Ltd. 10.80 11.00 10.77 11.00 0.20 5,352Siddiqsons TinXD 6.97 7.25 6.97 6.97 0.00 205

Construction and MaterialsAl-Abbas Cement 1.91 2.19 1.90 1.90 -0.01 3,005Attock Cement 52.50 52.52 52.40 52.49 -0.01 1,288Bal.Glass 1.95 1.98 1.95 1.95 0.00 100Berger Paints 14.18 13.70 13.70 13.70 -0.48 500Buxly Paints 6.00 6.50 6.00 6.00 0.00 1

General IndustrialsCherat Packaging 28.15 28.60 27.80 27.86 -0.29 14,445ECOPACK Ltd 3.10 3.15 2.85 3.11 0.01 110,806Ghani Glass LtdXD 39.88 40.50 39.00 39.34 -0.54 1,261MACPAC Films 9.00 9.38 8.53 9.38 0.38 502Packages Limited 89.50 92.00 85.03 88.55 -0.95 17,243

Industrial EngineeringAL-Ghazi Tractors 169.86 172.00 168.00 169.86 0.00 68Bolan CastingXD 28.00 28.55 28.00 28.00 0.00 4,001Ghandhara Ind. 6.94 7.40 7.34 7.38 0.44 500Hinopak Motor 96.11 95.76 91.31 95.76 -0.35 11K.S.B.Pumps 26.95 27.13 25.61 26.95 0.00 418

Automobile and PartsAgriautos Industries 60.27 60.99 60.27 60.27 0.00 50Atlas Battery Ltd. 172.01 172.01 172.00 172.01 0.00 100Atlas Honda Ltd. 125.27 126.00 125.00 125.00 -0.27 500Bal.Wheels XD 26.00 25.99 24.70 24.84 -1.16 537Dewan Motors 2.15 2.60 2.11 2.13 -0.02 79,586

BeveragesMurree Brewery Co. 110.49 111.43 109.00 111.18 0.69 1,170Shezan Int’l 150.02 150.00 145.05 145.58 -4.44 203

Mutual Funds

Fund offer Repurchase NAv

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

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 100.1087

Markets

Wednesday, 23 November, 2011

06

top 10 sectors

49% 01%Construction & Materials

Chemicals Real Estate & Investment

03%Electricity

01%02%

Fixed Line Telecommunication

17%Equity Investment Instruments

Financial Services

09%Banks10%Oil & Gas04%Personal Goods04%

International Oil PriceWTICrude Oil

$98.38

BrentCrude Oil

$106.88

STOCK MARKET HIGHLIGHTS

Index Change Volume Market ValueKSE-100 11767.00 -127.79 22,464,964 1,280,008,895LSE-25 3070.01 -1.46 1,149,164 22,907,994ISE-10 2639.3 -40.95 24,421 1,200,450

Major Gainers

Company Open High Low Close Change TurnoverUniLever Pak Ltd. 5362.40 5449.99 5250.00 5399.70 37.30 826Linde Pakistan Ltd. 100.39 103.99 102.99 103.07 2.68 1,483Shell Pakistan 195.09 197.25 195.00 197.04 1.95 2,010Security Paper 35.20 36.40 36.39 36.40 1.20 520Wazir Ali 11.60 12.60 12.60 12.60 1.00 1,865

Major Losers

Bata (Pak) Ltd. 747.72 720.00 710.34 710.34 -37.38 340Nestle PakistanXD 2979.39 3020.00 2901.00 2955.74 -23.65 121Indus Dyeing XD 384.13 366.00 365.13 365.13 -19.00 100National Ref.XD 314.52 314.00 306.10 307.76 -6.76 42,291P.S.O. 252.84 253.48 247.14 247.55 -5.29 208,421

Volume Leaders

Fauji Fert 59.62 59.65 57.90 58.04 -1.58 2,396,753Bank Al-Falah 12.04 12.08 11.83 11.90 -0.14 2,366,273Fatima Fert.Co. 23.01 23.17 22.55 22.78 -0.23 2,327,677Lotte PakPTA 10.63 10.73 10.29 10.32 -0.31 1,577,877National Bank 44.52 44.31 43.46 43.70 -0.82 1,300,674

Bullion MarketPer Tola (PKR) Per 10 Gm (PKR) Per Ounce US$

Gold 24K 55,308.00 47,468.00 1,695.00Gold 22K 51,608.00 44,245.00 –Silver (Tezabi) 1,033.00 887.00 35.05Silver (Thobi) 1025.00 880.00 –

Interbank RatesUS Dollar 87.3113UK Pound 136.6159Japanese Yen 1.1348Euro 118.2544

Buy SellUS Dollar 87.20 87.90Euro 117.64 119.05Great Britain Pound 136.03 137.54Japanese Yen 1.1266 1.1360

Canadian Dollar 83.36 85.64Hong Kong Dollar 11.05 11.31UAE Dirham 23.70 23.89Saudi Riyal 23.22 23.38Australian Dollar 85.34 87.93



news

07 Finance minister, hafeez Shaikh

government is committed toa reforms agenda to ensurethat economic stabilityremains intact

CNG kit ban to multiply consumer woesLAHoRe

NAUMAN TASLEEM

PrOPOSeD CNG kitban will not do anygood for gas sector.On the contrary, itwill increase prob-

lems of the middle class and opengates of smuggling and corrup-tion. This would subsequently bedamaging for government.

Ban will also increase smug-gling of the product and at thesame time, it will open gates forcorruption. Also, environmentwould be in danger because of theban. CNG emits far less pollutionthan petrol therefore chances ofincrease in air pollution wouldalso be high.

Around 50,000 kits and cylin-ders have been imported duringthis year. last year around200,000 kits were imported.More than 150,000 kits and cylin-ders are in the market and in caseof ban their prices would go upsharply. Currently, CNG kit and

cylinder in a corroborator vehicleis installed for rs25,000-30,000and in an effective fuel injunction(eFI) vehicle for rs50,000-60,000. Market stakeholders saidthat as soon the ban would beimposed prices of these kitswould double and it wouldbe problematic for con-sumers. They said there isno point in stopping CNGconversion of vehicles. Infact, these kits would enterthrough smugglers and ul-timately their prices wouldgo up. In the past whenthere were heavy duties on airconditioners their prices in-flated and ultimately people usedto buy smuggled air conditioners,which in turn damages exchequerand economy. Similarly, in case ofban rates of CNG would increasedue to smuggling. Currently, im-port of CNG kits is duty free. Kitsand cylinders are imported fromItaly, Argentina, China and India.

During last 15 years more than2.5 million vehicles were con-

verted to CNG. Process of conver-sion started in 1994, when govern-ment was encouraging green fuel.Consumers invested more thanrs70 billion only to convert theirvehicles to CNG. And now onceagain government is reversing the

policy, objecting that CNG sectorconsumes a lot of gas. Accord-

ing to economic Survey ofPakistan, out of total avail-able gas by SNGPl in thecountry CNG sector con-sumes 10 per cent, domes-tic consumers take 40 percent, power sector takes 19

per cent, fertilisers sevenper cent, general in-dustry (e.g textile) 20per cent and com-mercial users takefour per cent. Underthese statistics, theban on CNG kitswould not do anything

good for the countryrather it will make current

political government moreunpopular. hence, it would be

hard for Pakistan People’s Party(PPP) to secure votes in next gen-eral elections according to thestakeholders of the industry, whoshared their views with Profit.They said bureaucracy is misguid-ing political government throughsuch proposals, which are severelydamaging for PPP government.

All Pakistan CNG AssociationSenior Vice Chairman Central exec-utive Committee and Punjab FormerChairman raja Anwer said that incase of ban, prices of kits and cylinderwould go up and middleclass wouldsuffer badly. he said maximum usersof CNG vehicles are found in the mid-dle class. “In case of ban, these peoplewould be deprived of cheap trans-port,” he said. he added that underabsence of better public transportsystem, this ban would play havocwith common man, who is alreadyfacing inflation and price-hike.“liquor is banned in the countrybut people use it; but they get it athigher prices,” he said. Banninganything is not the solution of theproblem, he concluded.

Price hike in DAP market expectedKARACHI

STAff REPoRT

The reported curtail-ment of gas in the fastapproaching winter

season to the country’s leadingfertiliser manufacturer, FaujiFertiliser Bin Qasim limited(FFBl), would create a 30 to35k tonnes shortage of Di-Am-monium Phosphate (DAP) inthe agrarian economy.

The shortage, the analystsbelieve, would lead to an in-crease of rs50 to rs100 in theper bag price of DAP in thelocal market. The increasewould take the DAP prices tors4,100-4,200 from the exist-ing rs4,070.

IMPACT OF GAS SHORTAGE

Citing media reports, theanalysts at Topline Securitiesopine that owing to higher gasshortages during the upcomingwinter season, the FFBl waslikely to face an additional 15-day gas curtailment during nextmonth (December).

“This additional gas curtail-ment would adversely affect thecompany’s production in4Q2011 and thus, create a DAPshortage of 30-35k tonnes,” saidFarhan Mahmood of ToplineSecurities. The analyst, how-ever, said the company’s man-agement was yet to confirm this.

he said looking at persistentgas shortage of 27-30 per cent

on SSGC network, there was ahigh probability of the shortagematerialising, unless the govern-ment decides to divert gas fromother sectors in the upcominggas load management meetingon November 29. “If this hap-pens, this would be the first timethat FFBl would face winter gascurtailment starting from De-cember,” Farhan said.

UREA AND DAP SALES

last year, he recalled, thecompany had faced gas curtail-ment of more than 45-days,from January 2011 to mid Feb-ruary, while so far this year thecompany had witnessed gascurtailment of 27-30 per cent

during 2011. This in turn hadadversely affected the com-pany’s urea sales as well thatdeclined by 9 per cent in9M2011 to 339k tonnes as com-pared to 372k tonnes in thesame period last year, headded. On the other hand, theDAP sales had remained robustshowing a growth of 32 per centin 9M2011.

EARNING PER SHARE OF FFBL

“This is primarily due tohigher DAP sales in 3Q2011 assome pre-buying of DAP be-fore rabi season was also wit-nessed amid fear of gasshortage,” said Farhan.

This additional gas curtail-

ment would adversely affect thecompany’s production thus cre-ating a DAP shortage, he said.

According to the analyst,the supply shortage scenariomight exert an upward pres-sures on the DAP prices thatmight rise by rs50 to rs100per bag within next few days.“In case there is complete 15-day gas curtailment in Decem-ber 2011, our estimate suggeststhat FFBl’s 2011 ePS will re-duce by rs0.35-0.45,” he said.

This, Farhan said, wasdue to the fact that there wasgenerally higher DAP de-mand in rabi season. “Wehave assumed average DAPmargin of $250-260 pertonne in 4Q2011.”

GAS CURTAILMENT TO FERTILISER SECTOR

ministry of textilestarves for funds topay exporters

ISLAMABAD

JALALUDDIN RUMI

MINISTry of finance hasreleased only rs1 billion toministry of textile out of total

rs7.5 billion allocated for current fiscalyear under Textile Policy 2009-14, fordisbursement through State Bank ofPakistan (SBP). Ministry of textilerequires rs2.5 billion to pay off theclaims of textile exporters under ‘TheDuty Drawback Scheme’ for whichsecretary textile, Shahid rashid tookthe matter to finance minister, Dr Abdulhafeez Shaikh, documents availablewith Profit reveal. To compensate valueadded textiles exports and to offset thecost imposed on exporters, by a varietyof government agencies, and disruptioncaused by law and order problems;ministry of textile took up the initiativeof duty drawback of all sorts of locallevies and on tax paid by the exporters.It is pertinent to mention here that thescheme was operational sinceSeptember 2009, during fiscal year2009-10 and 2010-11. Funds amountingto rs7.40 billion have been disbursedunder this scheme during the last threeyears. This scheme was terminated inJune 2011 and 100 per cent of theclaims pertaining to September 2009 toSeptember 2010 have been paidwhereas, 14.68 per cent of the claimspertaining to June 2010 to January 2011have been paid. Currently, totaloutstanding amount of duty drawbackclaims till June 30, 2011 amounted tors10.70 billion. Whereas, financedivision has only allocated rs7.5 billionfor this scheme and released only rs1billion so far which has been creatingproblems in textile exports, officialsexplained. Moreover, textile ministryofficials told that according to cottoncrop assessment committee, beforerains and flood in Sindh and Punjab,cotton crop was cultivated on 0.65million hectares in Sindh and 2.5million hectares in Punjab. however,recent rains and floods in Sindhdamaged over 50 thousand hectaresof crop which makes more than 75per cent of the cotton cultivated inthe province.

BeIJInG

APP

AMBASSADOr MasoodKhan has said the leader-ship of Pakistan and China

is paying special attention to thepromotion of economic relationsbetween the two countries. "The in-dicators of trade and economic co-operation are good. last year,bilateral trade was US $8.7 billion.This year, we are set to cross the US$10 billion mark," he said, whileaddressing an investment forum.

By September this year, the bi-lateral trade had already touchedthe figure of $7 billion, he told APP.

Chinese corporations are in-vesting in the energy, telecommuni-cations, construction, mining,manufacturing, and agricultural

sectors, he said."We are also turning our atten-

tion to education, health, humanresource development, and waterresource management," he said,adding that we have to work hard torealise the full potential of our geo-graphical contiguities and eco-nomic complementarities.

Together, Pakistan and Chinawill revive the Old Silk route andcreate new trade, transportationand energy corridors that will con-nect China with West Asia and eu-rope. And Pakistan will be thebridge and the economic hub be-tween China, West Asia and eu-rope, he noted. Our strategic andpolitical ties are at their height, hesaid, emphasising that betweenour two nations, we have trust.President Zardari, he mentioned,

has visited China eight times inthe last three years and PrimeMinister Gilani four times. Pre-mier Wen Jiabao paid a his-toric visit to Pakistan lastyear, he added. he said Pak-istanis are a resilient andhardworking nation. likethe Chinese people, they areingenious and innovative.like China, Pakistan also val-ues its independence, in-tegrity, and dignity.

"We in Pakistan are keen tolearn from our Chinese brothersand sisters and work for win-win partnerships based onthe principle of mutualrespect and mu-tual benefit," henoted. We ap-preciate Chi-nese businessesstrong commit-ment to Pak-istan's market.

For our part, we assureyou to provide

safety and secu-rity for Chinesee n t e r p r i s e sand personnel

in Pakistan,he added.

Pak, China seek to promote economic tiesg By September bilateral trade had touched $7 billiong Pakistan, China to revive old Silk Route
