Thursday, 27 September, 2012

KARACHI

ISMAIL DILAWAR

WITH businessmenattaching fewer ex-pectations from thegovernment author-ities the business

sentiments in the crises-hit Pakistan haveslid to new lows during the recent months.

Also, businessmen in Pakistan fore-see energy crises, price hike, security is-sues and poor governance as majorchallenges they would be facing in thecoming months. While leading chal-lenges faced by the Pakistani businessentities during the last six months wereload shedding, corruption and increasein inflation.

Further, most of the business sectorentities in Pakistan believe that Islam-abad’s conferment of the Most Favored Na-tion (MFN) status to India and a liberalAfghan transit trade regime would impactthe local businesses adversely. A very highproportion of retail business entities, 48percent, consider MFN status to Indiawould have a negative impact on their busi-ness. Only 7 percent of the respondentsconsider that MFN status to India wouldresult in a positive impact on business.

This was revealed by a recent surveyconducted by the Overseas InvestorsChamber of Commerce and Industry(OICCI) between June and August 2012.

FURTHER DETERIORATION: Ac-cording to the survey, the confidence ofthe businessmen in the troubled Pak-istan further deteriorated during the re-view period and dropped by 9 percentfrom negative 25 to negative 34 percent.

The OICCI’s sixth Wave BusinessConfidence Index (BCI) survey, which isconducted bi-annually, showed thatPakistan had been moving deeper in thenegative territory on its Business Confi-dence Index Chart since April 2010when the business sentiments in the

country were in the positive zone.Major attributable factors for the

low business confidence are well knownand include energy crises, law andorder, high inflation, poor governmentpolicies and the high cost of runningbusinesses. The contribution of theabove negatives on the index was, re-spectively, 48 percent, 36 percent, 35percent, 14 percent and 5 percent.

“Despite general perception ofgrowth in turnover and profitability, assuggested by recent corporate results,business sentiment dipped by 9 percentover the past six months due to growingconcerns related to energy shortages,worsening security and inflation,” saidthe OICCI survey.

RETAIL APPREHENSION: It saidthe sharp drop in business confidencewas led mainly by poor sentiments of theretail sector where the BCI score wentdown from negative 29 to negative 48percent and of the manufacturing sectorwhich also declined significantly fromnegative 23 to negative 37 percent.

This decline was partially offset bythe relatively positive outlook of the serv-ice sector where BCI improved by sevenpercent from negative 24 to negative 17percent. Apart from increase in negativ-ity, the sixth wave also recorded a shift inopinion of respondents from positive toneutral zone, reflected in the decline ofthe overall business confidence score. In-terpreting the feedback, it appeared thatbusiness people have now lowered theirexpectations from the authorities.

In the past six months, energy crisis(load shedding) had been cited as themain factor causing restlessness amongthe business community, followed by con-tinuing deterioration in the law & ordersituation, high inflation, governance is-sues and high cost of doing business.

NOT-SO-GREAT EXPECTATIONS:

The above factors have resulted in a de-

cline in expectations of business expan-sion from 34 percent in November 2011to 19 percent in August 2012. However,in respect of plans for the next sixmonths, 16 percent of respondents ex-pect to expand business and have a pos-itive outlook in increase in sales, profitsand return on investment.

Of these, the service sector had thehighest positive outlook at 33 percentfor business expansion, within which fi-nance was the most optimistic sub-sec-tor. In the manufacturing sub-sectors,the auto industry was the most opti-mistic. A notable feature of the surveywas that the perception on governmentpolicies had improved by 12 percentfrom the previous survey.

BCI’S NEGATIVITY: The businesscommunity was of the opinion that over-all global economic situation improvedin the current survey period. However,this does not seem to be reflected in theresponse with respect to business situa-tion in Pakistan, where the BCI showedfurther negativity, both in the respon-dents’ specific industry as well as theirown organization.

Although the latest survey showed adecline in the number of respondentswith positive outlook for the economy,there was significant variation in theopinion pattern between various cities.The reduction in positive outlook andincrease in negativity was much morepronounced in Peshawar and Quetta,followed by twin cities (Rawalpindi-Is-lamabad) and Faisalabad, as comparedto the declining sentiments in Karachi,Lahore and Multan.

BLEAKNESS LIES AHEAD: Declinehad been noted in capital investmentplans for the next six months, which fellfrom 69 percent in the previous surveyto 55 percent in the current survey. Therespondents also indicated no plan to in-crease employment levels in their busi-

ness during next six months. Upon being queried more specifi-

cally, approximately 10 percent of re-spondents indicated planned capitalexpenditure for capacity and/or produc-tivity expansion. A small percentage ofthis capital expenditure was being con-sidered for new facility, renovation andimprovement in quality.

INFLATION IN THE STARS: Thebiggest factor impacting business in nextsix months was expected to be inflation.This was followed by fuel prices, uncer-tain security environment, governmentpolicies and rupee devaluation.

Volatile law and order situation hadbeen cited as the main reason for fast-declining local and Foreign Direct In-vestment (FDI) in Pakistan.

Overall, business entities of Karachifollowed by Islamabad and Lahore werethe main victims of law and order issues.These include street crimes, extortion,kidnapping for ransom, threats and ex-patriate security. Some 60 to 67 percentof respondents considered FederalBudget 2012-13 not having any positiveimpact on their business or the overalleconomy, whereas only 6 percent feltthere was a positive impact.

STAMPING DUTY: Strong oppositionhad been expressed by majority of busi-ness sector entities about stamp dutybeing demanded in recent months on var-ious procurement instruments, the levy ofSindh Development and Maintenance In-frastructure, gradual devaluation of rupeeand increasing level of extortion moneydemanded from the trade.

The OICCI conducts the largely atti-tudinal BCI survey every six months,through a leading independent researchfirm, to measure the sentiments andconfidence levels of key stakeholders ondifferent business related matters in-cluding the current state of Pakistan’seconomy and their own businesses.

Another 37b

in the bowl

Rs 798m interest accrued asgovernment borrows over Rs 37b via PIB auctions

KARACHI

STAFF REPORT

The cash-strapped federal governmentWednesday borrowed over Rs 37 billionfrom the banking system to cater itsever-burgeoning budgetary needs. Thefederal finance ministry raised theamount through the central bank whichauctioned the Pakistan InvestmentBonds (PIBs) of 3 to 20-year tenors.The central bank held auction of PIBsof 3-, 5-, 10- and 20-year maturity onWednesday with, respective, couponrates of 11.25, 11.50, 12 and 13 percentand the settlement date of September27. In response to the auction, theprimary dealers, comprising mostly theotherwise cash-strapped banks, bid asurplus amount of Rs 86.400 billiontheir prime focus being in the short-term, three years, bonds against whichover Rs 33.040 billion were offered.The bidders tended not to go for longterm investment as they did not bidagainst the 20-year papers at all.However, of the bids offered the StateBank accepted bids having a face valueof Rs 37.501 billion with per annumeffective Weighted Average Yieldranging from 10.5635 percent to11.5776 percent. The fresh borrowingmight be comforting the now funds-starved government which wouldhowever have to repay the borrowedamount along with interest amountingto Rs 797.961 million over a decadecoming ahead. The resource-constrained governments in the centerand provinces have extensively beenborrowing from the scheduled andcentral banks leaving little or noliquidity with the latter for the growth-oriented private sector.

ISLAMABAD

APP

President Asif Ali Zardari has urged all asso-ciated with tourism industry to undertakeevery effort for the promotion and trans-forming this area into one of the most vi-brant sector of the economy.

“Fortunately, Pakistan is bestowed withenormously rich natural as well as man-madecultural treasures. From the relics of IndusCivilization to the traces of famed GandharaCivilization, our rich cultural heritage, en-chanting landscape spreading over the warmbeaches to deserts and fertile plains to theawesome mountain peaks, we offer thetourist across the world a unique and di-versified destination to visualize journeyof mankind through ages and the splen-did beauties of nature,” the presidentsaid in his message on the occasion of‘World Tourism Day’.

The President saidthat unfortunately thecountry had not beenable to exploit fullpotential of thismagnificent treas-

ure due to variety of reasons. In present day context, he said when

there was greater realization for the need tointegrate promotion of tourism with energy-efficient practices and to reduce carbon foot-prints for a healthier environment andsustainable development, the need for pro-moting tourism on modern lines was evengreater for countries like Pakistan, whichwere far behind the developed nations infully developing tourism into a robust indus-try and to ensure that the growth of industrywas accompanied by adoption of energy effi-

cient practices. The President said that World

Tourism Day each year was areminder of the important roleplayed by the tourism industryin the socio-economic devel-opment of the country and itscontribution in bringing the

people of different parts of theworld closer to each other by

fostering a better un-derstanding forthe foreign cul-tures and way oflife.

Entrepreneur confidencetraces its nadir g Business sentiments drop by 9% to negative 34 g Energy crisis, law and order, inflation, bad

governance and high cost of business highlighted as reasons g Majority of businesses oppose MFN

status to India, liberal trade regime with Afghanistan g Most do not see Budget FY13 as being positive

for their business g Stamp duty on various procurement instruments strongly opposed

ISLAMABAD

ONLINE

Acting President Nayyar Bokhari,Wednesday, said that people of Pak-istan had highest regards for SaudiArabia for being supportive to Pak-istan particularly in testing times.

He was expressing these views inmeeting Minister for Commerce andIndustry for Saudi Arabia TawfiqBin Fawzan Al-Rabeea and hisdelegation for participation inthe ninth Session of Pakistan-Saudi Joint Ministerial Com-mission at Parliament Househere on Wednesday. TheActing President appreciatedvisit of Saudi CommerceMinister despite the tragedyof his son’s death recently.Bokhari said that his visitunder such circumstancesstrongly reflectedthe goodwilland lovew h i c h

the leadership and people of SaudiArabia have for Pakistan.

The Acting President extendedhis thanks for a grant of $ 100 millionfor the welfare of people of Pakistanannounced immediately after visit ofthe Prime Minister to Saudi Arabia inJuly this year.

He told the delegation that Pak-istani were appreciative of the all out

support extended to them dur-ing 2005 earthquake and

2010-11 floods in Pak-istan. He told the Saudidelegation that Pak-istan was facing flood

situation in areas ofSindh and Balochis-

tan and certain areas ofPunjab this year as well.The Acting President said

that the meeting of JointMinisterial Commissionwill definitely produce

good results forbenefits of

the two

sides and strengthen our trade andcommerce relations.

Pakistan’s bilateral trade withSaudi Arabia had grown manifold andwill get a further boost with an earlyconclusion of Pak-Gulf CooperationCouncil (GCC) Free Trade Agreementas it will give Pakistan enhanced mar-ket access in Middle East. He told thatPakistan can export its excess wheatand fine quality rice and other prod-ucts to Saudi Arabia and other MiddleEast countries.

The Acting President appreci-ated the regular and substantial in-flows of direct investment fromSaudi Arabia and reassured thatPakistanis would continue to pro-vide enabling environment for Saudiinvestment in Pakistan.

Bokhari told the delegates thatthere were ample opportunities of in-vestment especially in the fields of en-ergy, oil exploration, housing andconstruction, agro-food, telecommu-nication, infrastructure, textile,power, automotives and spare parts.

‘Let’s bolster Pak-Saudi tradeand commerce relations’

Lure tourists, enhance economyPresident vies to make tourism sector most vibrantarea of economy

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02

Thursday, 27 September, 2012

Major Gainers

COMPANy OPEN HIGH LOW CLOSE CHANGE TUrNOvErNestle Pakistan Ltd. 4150.00 4200.00 4150.00 4200.00 50.00 40Bata (Pak) Limited 963.53 1011.50 970.01 999.25 35.72 900Island Textile 295.10 309.85 309.85 309.85 14.75 200Mithchells Fruit 331.00 344.00 344.00 344.00 13.00 100Service Industries 183.48 191.10 184.00 190.00 6.52 18,900

Major LosersWyeth Pak Limited 960.71 985.00 913.00 913.00 -47.71 500Siemens Pakistan 862.00 850.00 850.00 850.00 -12.00 150Pak Gum & Chemical 215.95 211.00 205.16 205.16 -10.79 2,400National Foods 251.00 250.00 244.50 244.75 -6.25 1,100Indus Motor CoXD 260.42 258.00 251.50 255.68 -4.74 84,800

Volume Leaders

P.T.C.L.A 19.36 19.72 19.38 19.67 0.31 9,386,000Maple Leaf Cement 8.78 9.30 8.80 9.02 0.24 5,493,500D.G.K.Cement 47.86 48.60 47.61 48.38 0.52 4,248,000Fauji Cement 5.99 6.24 6.02 6.10 0.11 3,893,500Tariq Glass Ind. 18.99 19.99 19.00 19.97 0.98 2,888,000

Interbank RatesUS Dollar 94.6895UK Pound 153.3023Japanese Yen 1.2191Euro 121.9222

Dollar EastBUy SELL

US Dollar 94.50 95.00Euro 120.53 121.67Great Britain Pound 151.55 152.94Japanese Yen 1.2025 1.2135Canadian Dollar 95.01 96.39Hong Kong Dollar 11.99 12.17UAE Dirham 25.61 25.82Saudi Riyal 25.11 25.27Australian Dollar 96.71 99.05

Business

National leadership beinginvited to NetSol to promoteIT industry: Salim GhauriLAHORE: NetSol Technologies Ltd, Chairmanand CEO, Salim Ghauri had said that purpose ofinviting national leadership to NetSol Technolo-gies was to promote the importance of Informa-tion Technology (IT) industry in Pakistan and itsfuture role in shaping up country’s economy. Hewas talking to media after the visit of PakistanTehrik-e-Insaf (PTI) Chief Imran Khan the otherday. Salim said it was the right time to apprise thenational leadership of the advantages of the IT in-dustry for the economic growth of Pakistan, headded. PRESS RELEASE

The Designers multi-brand storeexhibition at Dubai Ladies Club

LAHORE: The Designers multi-brand store locatedon 26th Street will be holding yet another exclusiveand much talked about multi-designer exhibition atthe Dubai Ladies Club with no less than the who’swho of Pakistan’s fashion gentry. The exciting line-up of designers for this exhibition includesrenowned brands such as prêt prince Rizwan Beyg,king of couture Umar Sayeed, and top designerSonya Battla. Other designers bringing forth exclu-sive collections are high end and renowned design-ers such as Nomi Ansari, Zainab Sajid, Mohsin Aliand upcoming designers such as SNL, Aisha Alam,Rashk, Teeze and more. PRESS RELEASE

Western Union’s unique campaign:Pardes Sey Apney GharKARACHI: A special program for Western Union’sunique campaign: Pardes Sey Apney Ghar (Come

home from abroad) six lucky winners won free re-turn tickets from the Middle East, came to Pakistanand met their loved ones and were even invited asguests on the Omer Shariff show. PRESS RELEASE

Launch of Nida Azwer label in New Delhi

LAHORE: Renowned designer Nida Azwer on20th September showcased her collection at thelaunch of The PFDC Bolveard in New Delhi India.Model and actress Sonya Jehan was the showstopper for Nida Azwer. PRESS RELEASE

Pakistan State Oil holds its36th Annual General Meeting

KARACHI: The nation’s leading Energy Company,Pakistan State Oil (PSO) convened its 36th AnnualGeneral Meeting at a local hotel. The event waschaired by Chairman-Board of Management (BoM),Sohail Wajahat Siddiqui, who congratulated theshareholders on being the proud owners of the na-tion’s first trillion rupee company. PRESS RELEASE

CORPORATE CORNER

New flagship store of Borjan was inaugurated by Umair Hussain inthe presence of Business Manager Naveed Shahzad andDevelopment Manager Tahir Yasin.

Lahore Stock Exchange electsfour member directorsLAHORE: The Lahore Stock Exchange Limitedelected four member directors for a period ofthree years, in its Extra-ordinary General Meeting(EOGM) held here at the LSE building onWednesday. Six candidates had submitted theirnomination papers for the four seats of memberdirectors at LSE Board. However, before start ofthe EOGM, Dr. Arslan Razaque and Syed AsimZafar withdrew their nomination papers, there-fore, remaining four candidates Ammar-ul-Haq,Asif Baig Mirza, Mirza Ejaz Ullah Baig and OmarKhalil Malik were elected unopposed.It was the first election of member directors afterthe LSE’s demutualization. PRESS RELEASE

ISLAMABAD

ONLINE

Christine Lagarde, Managing Director of the InternationalMonetary Fund(IMF) has urged policymakers to use thewindow of opportunity offered by recent policy decisions—and to take the actions needed to achieve a decisive turn inthe global crisis.

“This time, we need a sustained rebound, not a bounce.If this time is to be different, we need certainty, not uncer-tainty, she said, adding we need decision makers to be realaction takers. We need delivery,” she said in a speech at thePeterson Institute for International Economics. She de-scribed recent initiatives by major central banks as “big policysignals in the right direction”—the European Central Bank’sOMT bond-purchasing program, QE3 by the U.S. Federal Re-serve, and the Bank of Japan’s expanded Asset Purchase Pro-

gram. At the sametime, La-g a r d ewarned thatthe globaleconomy is stillfraught with risksand policy uncer-tainty is weighinggrowth down. TheIMF continues to proj-ect a gradual recovery,but global growth will likelybe a bit weaker than antici-pated even in July, shesaid.

KARACHI

ISMAIL DILAWAR

LUCKY Holdings Limited (LHL), agroup of five companies which re-cently acquired controlling stakesin the ICI Pakistan Limited, in-tends to buy 12 percent more

shares of the paint giant through public offer.LHL, comprising Lucky Cement, Gadoon

Textile Mills, Lucky Textile Mills, Yunus Tex-tile Mills and YB Pakistan, had on June 12 ac-quired over 70.019 million ordinary shares ofthe ICI Pakistan at a huge cost of over Rs700.194 million.

The group, however, intends to acquire 12.1percent or over 11.169 million more shares ofthe target firm, ICI Pakistan, said StandardChartered Bank, the group’s financial advisorand manager to the offer, in a communiquéwith the stakeholders.

The new acquisition is to be carried outthrough Initial Public Offering (IPO).

“Up to 11,169,796 ordinary shares of Rs 10each of the target company consisting 12.1 per-cent of the total issued and paid up share capi-tal is proposed to be acquired through thepublic offer process,” the bank added.

The Lucky group had acquired 70,019,459shares from the ICI Omicron B.V. Also, in linewith the Regulation 6(4) of the Listed Compa-nies (Substantial Acquisitions of Voting Shares

and Takeovers) Regulations 2008, the LHLWednesday notified its revised and updatedpubic announcement of intention to purchase75.81 percent voting shares of the ICI Pakistan.

“It has been decided that the shares of ICIPakistan Limited would be acquired by certainother group companies in addition to Lucky Ce-ment Limited through Lucky Holdings Lim-ited,” the Standard Chartered Bank said.

In the LHL Lucky Cement holds 75 percentshares, Gadoon Textile Mills 1 percent, LuckyTextile Mills 1 percent, Yunus Textile Mills 18percent and YB Pakistan 5 percent.

Soneri Bank now offersMoneyGram servicesacross PakistanKARACHI: Soneri Bank will now facili-tate the delivery of MoneyGram paymentsto beneficiaries through its extensivebranch network, which covers most of thehigh home remittance volume receivingareas in Pakistan. PRESS RELEASE

Jinnah Institute’s roundtableon ‘free expression on theinternet and its limits’

ISLAMABAD: The internet is a uniquemedium that presents new challengesand questions for Pakistani state and so-ciety, especially when dealing with issueslike the YouTube video that sparked vio-lent protests across the Muslim world.This was the view of participants at aroundtable on free expression on the in-ternet in Pakistan and its limits, organ-ized jointly by the Jinnah Institute andthe Initiative on Internet & Society at theLahore University of Management Sci-ences. The session began with a presen-tation Abid Hussain Imam of theDepartment of Law and Policy at LUMSon laws and conventions that apply to theinternet in Pakistan. Professor Imamhighlighted the unique nature of the in-ternet as a medium, and how it is notforced on the consumer of information.Rather, the consumer has to actively seekcontent on the internet, which raises in-teresting questions about liability and re-sponsibility. The presentation wasfollowed by a lively discussion on theissue, in which many participants agreedthat freedom of speech is not an absolutevalue and its interpretations vary acrosssocieties and cultures. These variationsrequire states and companies to come upwith appropriate legal and policy re-sponses to ensure respect for all individ-uals and communities and protect themagainst hate speech and incendiary con-tent. PRESS RELEASE

Lucky to investsome fortune

Now or Never

The group intends to buy 12% more stakes in ICI Pakistan

Zwickl takes helm ofSiemens Pakistan

KARACHI

STAFF REPORT

Gunter Zwickl has taken over SiemensPakistan as Chief Executive Officer (CEO) ofthe engineering firm, it emerged onWednesday. The decision was taken by thecompany’s Board of Directors, in itsSeptember 25th meeting, after BernhardNiessing, Zwickl’s predessor, resigned fromhis post. Zwickl is set to take charge from thefirst of next month as Bernhard’s resignationwould be taking effect from September 30.Bernhard, however, would continue toremain on the company’s board as a member.Another appointment stamped in theSiemens Board meeting was that ofMohammad Rafi as a company secretary.

IMF calls for action now to secure global recovery

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