Wednesday, September 02, 2009

KARACHI - The fertiliser sector continues to enlist decent growth as overall nutrients off-take registered a growth of 67 percent in July 2009 on Year on Year (YoY) basis, stated figures released by the National Fertiliser Development Centre (NDFC) for 7MCY09. The total nutrient off-take continued to follow a rising trend as huge growth of 67 percent was registered in July 09 on YoY basis. Moreover, encouraging growth of 21 percent was observed on MoM basis as demand continued to persist despite better off-take during June 09. The impressive growth in the overall off-take was primarily backed by robust increase in the demand of DAP which in turn was reflected in better phosphate growth and thereby a much improved NP ratio of 3.00. Though the ratio is still higher at 4.61:1 on YTD basis, it has anyhow improved from 11.6:1 which prevailed during the same period last year. However, DAP sales remained attractive as total off-take grew by 585 percent on YoY basis and 262 percent on CYTD basis, while this massive upsurge can be attributed to last year s much lower DAP demand due to higher prices which prevailed back then, MoM off-take, on the other hand, also showed quite decent growth as an increase of 58 percent was registered. Better DAP off-take along with timely rainfall is expected to have a positive impact on the yields of sugarcane, rice and cotton as Kharif growing season peaks. As far as urea is concerned, there has been an increase of 12 percent in CYTD off-take, which also improved by 13.8 percent and 26.4 percent on MoM and YoY basis respectively.

All in all, a much better Urea-to-DAP ratio of 2.73 was maintained during July 09 compared to last 7 year s average of 4.11 for the same month though the ratio still stood disturbed at 5.05 on CYTD off-take. While DAP prices have come down significantly from last year s Rs3,079/bag to Rs1, 897/bag in Jul 09, the trend appears to repeal in Aug 09 amidst global price increase (7pc during Aug 09). Moreover, MoM DAP off-take is expected to slowdown in Aug09 amidst rising price trends coupled with seasonal tendency of lower off-take. Urea prices on the other hand, continued to remain higher on YTD avg., improving by 20 percent. Month-wise urea prices however continue to topple down marginally, decreasing by 0.6 percent MoM and further by 3.8 percent in Aug 09.

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Tuesday, September 01, 2009

KARACHI - Commercial banks earnings and profitability has sharply declined to Rs 26.7 billion during first half of calendar year 2009 as against earnings of Rs 38.8 billion in the corresponding period of last year. In terms of growth, the sector s profitability has seen a decline of 31 per cent during Jan-June 2009. This contraction attributed to higher provisions for Non Performing loans (NPLs) and higher impairment provisioning. After a depressing 1Q2009, earnings of listed commercial banks continued to remain depressed in 2Q2009 as well. However, the sector deposits and advances growth is projected to be around 7 per cent and 5pc respectively for the entire year of 2009. Despite improved NPL trend, analysts still expect 2009 to be a difficult year for the sector with earnings likely to decline by 8 per cent. It is important to note that since the last week of July, major listed banking companies have started to announce their 1H2009 financial results, according to which, commercial banks Net Interest Income (NII) increased by 19 per cent while Non Interest Income depicted sluggish trend during Jan-June this year. JS Research compiled this consolidated figure of sector profitability while taking up 24 banks, out of 25 banks listed at Karachi Stock Exchange for its analysis. BOP has been excluded as the bank is yet to declare its 1H2009 results.

According to JS Research, as of March 2009, sample banks represent more than 95 per cent of the total listed sector s deposits and assets.JS said that the decline in earnings was primarily driven by heavy provisioning for NPLs and higher impairment provisioning as total provisions for NPLs surged to Rs 35.0 billion (US$435million) as against Rs 20.2 billion (US$313 million) in 1H2008, an astounding growth of 74 per cent largely due to slowdown in economic growth. Moreover, stock market crash in the second half of 2008 resulted in impairment loss of Rs 4.2 billion as against only Rs 357 million recognized in 1H2008. Moreover, amid sharp decline in KIBOR, 2Q2009 has seen pressure on spread and resultantly NII. On a positive note, however, there seems to relative easing on the quantum of NPL acceleration as reflected by 45 per cent on quarter-on-quarter basis decline in incremental NPLs in 2Q2009. While profits remained subdued due to high provisions, Net interest income (NII) continued to post decent growth rising by 19 per cent to Rs 122.8 billion, amid higher spreads (7.6 per cent in 1H2009). In contrast, relatively week equity market conditions kept non interest income largely in check as it was recorded at Rs 40.7b similar to 1H2008. Fee income the largest component in non interest income recorded a growth of 9 per cent and stood at Rs 20.4b.

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Monday August 31, 2009

DUBAI : The world economic crunch has hit the Middle East too, but is not deterring many Muslims from throwing traditional banquets to break the fast each dusk during the holy month of Ramazan, even if it means cutting back on other expenses. But for some, such as in the Gaza Strip, the crushing weight of poverty and an Israeli blockade is too much for even the most determined. In the oil-rich Gulf region, supermarkets have been crammed with customers since Ramazan began last week, shopping for food and drinks in preparation for the banquet, or iftar, sometimes served in lavish tents or hotel ballrooms. Some are making an exception and running budget deficits, because Ramazan is not only a time for prayer and spiritual reflection but also for social bonding over meals with family and friends. This is the only month when families get together for banquets. They do not care about the crisis; people forget about their worries during those get-togethers, Emirati housewife Umm Saeed said in Dubai. People are inviting each other over for food more often during this month. It is as if they are competing against each other for who buys the most things and cooks the most food. Mashael Mekki, a Sudanese living in Dubai said: Food is food no matter if there is an economic crisis; people are buying and cooking the same quantities as last year. It s Ramazan; people are hungry. I am buying the same things as I did last year, she said, adding that the same people who have invited us last year are also inviting us this year. The same sentiment was shared by people in neighbouring Qatar. Mohammed al-Sada, a 32-year-old government clerk, said cutting back on spending is unthinkable because Ramazan has a special status.

There is merchandise that should be bought during Ramazan as is the case every year even if I have to depend on the credit card. Perhaps I will economise after the month is over in order to compensate for the budget deficit, but we are not ready to change our habits during Ramazan. Customers throng cafes and restaurants, staying up late, smoking shishas (water pipes), drinking tea or eating sweets and delicacies while chatting and exchanging news. But in the Gaza Strip, where an Israeli offensive killed hundreds and flattened vast swathes of the territory at the new year, Ramazan reminds people of the severe poverty they live in as a result of an Israeli blockade. Rashad Abu Aisha said this is the worst Ramazan her family has ever seen, with widespread shortages and skyrocketing prices at the local market. The war has added so much to our grief; it s more than we can bear, he said. Even those whose homes and loved ones were spared by the fighting have faced rolling shortages and the highest prices in memory, as they have had to rely on goods smuggled in through tunnels from Egypt. As a result, the festive Ramazan lamps that line the streets of cities across the Muslim world are, in Gaza, largely confined to store-fronts. Sami, a 40-year-old father of seven, says the little money he is able to scrape together will have to go for supplies for the coming school year. People in Gaza never know when the next disaster is going to come and how they are going to deal with it, he says. Most people are without work and without a source of income. Shopowners, meanwhile, say that while they are able to fill their shelves with smuggled goods they have few customers. Generally speaking, consumers in the region have complained of higher prices of even basic foods. I have noticed an increase in the prices of staple foods, the foods we use in our everyday meals, such as rice, vegetables, bread and meats. They are raising the prices on things that we need the most, said Umm Khalifa in Dubai. I think the rise in prices is unjustified since they know that during Ramazan we consume more so this way they are creating more pressure on households. This is common every Ramazan and is, in part, due to higher demand. And as always, this prompts governments to take measures to clamp down on price hikes.

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Tuesday, August 25, 2009

KARACHI - Agricultural credit disbursement by commercial and specialised banks rose 19 per cent year-on-year to Rs 17.847b in the first month of the current 2009-10 fiscal year (FY10). In absolute terms, disbursement of credit to the agriculture sector increased by over Rs 2.849 billion in July, 2009, when compared with total disbursement of Rs 14.998 billion in the same month last year. Overall credit disbursement by five major commercial banks including Allied Bank Limited, Habib Bank Limited, MCB Bank Limited, National Bank of Pakistan and United Bank Limited stood at Rs 10.337 billion in July, 2009 compared with Rs 6.690 billion in July, 2008, depicting an increase of Rs 3.647 billion or 54.51 per cent. Zarai Taraqiati Bank Limited, the largest specialized bank, disbursed a total of Rs 3.509 billion in July, 2009, up 12 percent when compared with Rs 3.132b in July 2008, while disbursement by Punjab Provincial Co-operative Bank Limited stood at Rs 548.127m in July, 2009 compared with Rs 699.062m in the same month last year. Besides, 14 domestic private banks also loaned a combined Rs 3.453b in July, 2009, compared with Rs 4.477b disbursed in July, 2008. It may be recalled that the State Bank of Pakistan has set an indicative agricultural credit disbursement target of Rs 260 billion for FY10. Banks disbursed a total of Rs 233.01 billion to the agricultural sector in FY09.

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Monday June 29, 2009

ISLAMABAD: The Pakistan State Oil (PSO) has temporarily suspended fuel supply to many airlines, including Pakistan International Airlines (PIA), for the want of JP-1 fuel. A private news channel, quoting PSO sources, said that the fuel shortage was due to the annual repair work on National Refinery, which would be completed soon.

But Shell and Caltex lubricant companies have been continuously providing fuel to the airlines.


(APP)

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Monday June 29, 2009

ISLAMABAD: The Pakistan State Oil (PSO) has temporarily suspended fuel supply to many airlines, including Pakistan International Airlines (PIA), for the want of JP-1 fuel. A private news channel, quoting PSO sources, said that the fuel shortage was due to the annual repair work on National Refinery, which would be completed soon.

But Shell and Caltex lubricant companies have been continuously providing fuel to the airlines.


(APP)

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Friday June 26, 2009

ISLAMABAD: Pakistan Refinery Limited (PRL) and National Refinery Limited (NRL) have curtailed jet fuel supply to Shell Oil Marketing Company that may result in disturbance of flights at Karachi airport due to fuel shortage. Sources revealed to Business Recorder on Thursday that Shell had written a letter to the Petroleum Ministry, saying that the PRL and NRL were not supplying enough JP-1 fuel to maintain critical stocks necessary to sustain the air traffic.

The sources said Shell warned that its jet fuel stocks had dropped due to curtailed jet fuel supply by the PRL and NRL, and asked Petroleum Ministry to make alternative arrangements for jet fuel supply for airlines as fuel shortage might disturb flight schedule at Karachi airport. Responding to a letter addressed by Shell, the sources said, the Petroleum Ministry had written letters to the Managing Directors of the PRL and NRL, asking them to enhance the fuel supply to Shell in an effort to maintain fuel stocks for airlines.

The Sources were of the view that the PRL and NRL had reduced jet fuel supply to Shell due to lower production as a result of the financial crunch. Owing to circular debt problems, oil marketing companies (OMCs) and oil refineries are facing problems in continuing to supply fuel in the country. Power sector is a big defaulter and the main reason behind rising circular debt. The state run Pakistan State Oil (PSO) is a major fuel supplier that captures 70 percent of the market share and its dues against different clients have exceeded Rs 84 billion.

The PSO is facing a severe liquidity problem and is unable to open the letter of credits (LCs) for import of oil to meet the country's requirements. The Finance Ministry has recently issued Rs 24 billion paper guarantees to Pakistan Electric Power Company (Pepco) to settle the circular debt in oil and power sectors. However, analysts have termed the exercise of issuing paper guarantees as paper work that would provide no relief to the cash starved PSO and oil refineries.

Under the arrangement, the Pepco will divide Rs 24 billion paper guarantees into three parts, making book transfers to the electricity producers, including Hubco and Kapco. The Pepco would transfer some of the amount to the KESC and the PSO. In return, the Hubco, Kapco and the KESC would then reduce some of the debts on the books of the PSO and the KESC. Analysts point out that during the exercise, there would be no cash flow and ultimate beneficiary would be the government as it would receive dividends from the PPL and OGDCL at the end of the exercise.


(BRecorder)

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Tuesday June 16, 2009

KARACHI: Sindh Chief Minister Qaim Ali Shah on Monday unveiled in Sindh Assembly Rs 327.182 billion budget for fiscal year 2009-10, marking "a big" deficit of Rs 16.84 billion. The proposed budget showed an increase of 22 percent against the current fiscal year's revised estimates of Rs 267.568 billion.

As per proposed budget, total revenue receipts are estimated at Rs 310.34 billion, which are Rs 42 billion higher than current year's revised revenue estimates of Rs 268.271 billion. The Chief Minister, who also holds the portfolio of finance, however, told the house that the bulk of increase in new fiscal receipts was on account of possibility of getting arrears on account of sale of land and the province's revenue held in bank guarantees.

Estimated revenue receipts from Divisible Pool, including Grant-in-Aid, are Rs 125 billion, with 12.7 percent increase over 2008-09 budget. The estimates under oil and gas receipts are Rs 50 billion and these are six percent less than current year's revised estimates of Rs 53.4 billion. Overall federal transfers are estimated at Rs 204.6 billion as against revised estimates of Rs 183.2 billion.

The province's own receipts have been pitched at Rs 39 billion with an increase of over 29 percent over revised estimates of outgoing year. On the expenditure side, the current revenue expenditure has been estimated at Rs 213.4 billion, with an increase of 15 percent over revised estimates of Rs 185 billion.

The current capital budget has a surplus of Rs 5.4 billion as Sindh government is expecting "Budget Support Loans" from World Bank and Asian Development Bank. The shares of local governments have been worked out to Rs 94.4 (including Rs 27.6 billion of District Support Grant) on the basis of PFC Award, and it reflects an increase of 21 percent over budget 2008-09.


(BRecorder)

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Thursday June 11, 2009

European and Asian shares climbed and U.S. stock-index futures advanced as the International Energy Agency increased its global oil-demand forecast, adding to signs the worst of the recession may be over.

GlaxoSmithKline Plc, the U.K.’s biggest drugmaker, rose the most in a month after Morgan Stanley advised buying European health-care shares. Electrolux AB, the world’s second-biggest appliance maker, advanced 5.1 percent after Goldman Sachs Group Inc. added the shares to its “conviction buy” list.

Europe’s Dow Jones Stoxx 600 Index increased 0.7 percent to 214.25 at 9:51 a.m. in London. The gauge has surged 36 percent since March 9 on speculation the first global recession since World War II is easing. The measure is valued at 24.9 times the earnings of its companies, the most expensive level since 2004, weekly data compiled by Bloomberg show.

“The worst is over for banks and the world economy,” said Otto Waser, the chief investment officer at R&A Research & Asset Management AG in Zurich. “The recovery more or less is going to be the stock market theme for the next 12 months. We are saying it’s getting a lot less worse,” he said in a television interview.

The MSCI Asia Pacific Index gained 0.5 percent, led by mining and energy companies, as rising fixed-asset investment in China boosted confidence the global economy is recovering.

U.S. Futures

Standard & Poor’s 500 Index futures added 0.3 percent to 943.3. Sales at U.S. retailers probably rose in May for the first time in three months, economists said before a Commerce Department report due at 8:30 a.m. in Washington today. At the same time, the Labor Department may report that 615,000 workers filed claims for jobless benefits last week, compared with 621,000 a week earlier, according to the survey median.

The Fed said yesterday that the U.S. economic slump may be slowing in almost half of its regions, with the outlook at some companies improving while “stringent” loan conditions and a “weak” labor market persist.

“Economic conditions remained weak or deteriorated further” from mid-April through May, while five of 12 Fed districts “noted that the downward trend is showing signs of moderating,” the Fed said in its Beige Book business survey, published two weeks before officials issue their next monetary policy decision.

Bank of England policy maker Andrew Sentance said the U.K. recession may be “bottoming out,” setting the scene for a recovery as soon as this year.

IEA Forecast

The International Energy Agency today raised its global oil-demand forecast for the first time in 10 months. The adviser to 28 nations increased its demand estimate for this year by 120,000 barrels a day to 83.3 million barrels a day in its monthly report. Still, consumption worldwide will contract by 2.9 percent from last year, the biggest drop since 1981.

Glaxo added 2 percent to 1,053 pence. Pharmaceutical shares were raised to “attractive” at Morgan Stanley, which said “valuations capture both near-term U.S. political uncertainty and growing economic pressure.” Glaxo was boosted to “equal weight.”

Electrolux added 5.1 percent to 108.75 kronor after Goldman Sachs raised its recommendation to “buy” from “sell” and added the stock to the firm’s “conviction buy” list.

China Petroleum, known as Sinopec, climbed 2.3 percent to HK$5.85. The company’s Sinopec Shanghai Petrochemical Co. unit said it expects to post a profit for the first half of 2009, compared with a net loss for the same period last year.

Carnival Plc, the world’s largest cruise line operator, slid 1.1 percent to 1,540 pence as oil climbed for a third day.


Courtesy: Bloomberg

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Thursday, June 11, 2009

With only three days left for the budget announcement the prices of luxury goods have hiked owing to shortage due to hoarding by traders.

Traders Action Committee Chairman Siddiq Memon said that prior to every budget, two trends are common, prices of most goods, especially luxury items rise and available stocks in the market sell much more rapidly.

This year, Memon informed, prices of the 350 items present on the import list have hiked by 30 per cent including ready-made garments and shoes.

He admitted the fact that traders hoard leading to shortage in the markets. There is a difference between keeping an inventory or stock of goods in warehouses and hoarding. Hoarding means not releasing the goods from warehouses even if there is a demand in the market.

“Currently clothing from China, Thailand, Japan etc are short in the market and after the announcement of the budget, prices of these are expected to rise further,” he added.



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Thursday, June 11, 2009

DUBAI: The UAE’s Al Khaleej Sugar has sold several thousand tonnes of sugar to India after the country’s output fell due to weather conditions, an executive said on Wednesday.

“We sold containers with a few thousand tonnes of raw and white sugar to India last month,” Cyrus Raja, corporate affairs general manager at Dubai-based refinery told Reuters.

He declined to give further details about prices or quantities that were shipped.

“Depending on India’s needs for white and raw we are considering selling more sugar to them, but still have no estimates of how much we will sell,” said Raja.

Due to less rain this year traders forecast a 45 per cent drop in India’s sugar output to 14.7 million tonnes in the crop year to September, which has turned the country from an exporting nation to an importing one.

The fall in cane output has caused New York-traded raw sugar to rise by more than 30 per cent this year, striking a near 3-year peak of 16.05 cents/lb two weeks ago.

Al Khaleej, one of the world’s largest sugar refineries had sold 100,000 tonnes of white sugar to Pakistan this month.

In May Pakistan had purchased 50,000 tonnes of white sugar from Al Khaleej for $494.40 a tonne, traders in Pakistan said.

Pakistan was expected to buy up to 600,000 metric tonnes of sugar this year as the subcontinent ramps up imports of the sweetener to keep down prices and avoid dipping into stocks.

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Thursday, June 11, 2009

Cellular operators reject govt offer

LAHORE: The cellular phone operators are not willing to accept the government’s offer to increase their SMS rates in order to get relief in the GST and SIM activation charges.

The News has learnt that a meeting was held between CEOs of cellular companies and the adviser to the prime minister on finance Shaukat Tarin on Monday in which the adviser had linked the decline in GST and SIM activation to increase in SMS rates.

All operators rejected the offer except one that is not offering bundle SMS package to its customers. The only beneficiary of the government offer would be that single company, which was unable to continue bundle SMS packages due to network issues, the finance ministry revealed.

The SMS addicted youth would be the target of the government for generating revenue.

Currently, if a company offers unlimited SMS for Rs3 per day the government earns only 0.21 paisa tax from this package. Once the SMS rates would be increased the bundle SMS packages would automatically end. Thus the government will earn taxes on every SMS which ever be the rates.


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Wednesday, 10 June 2009

ISLAMABAD: Prime Minister Syed Yousuf Raza Gilani on Tuesday said the Ministry of Industries and Production has a key role to play in creating an environment for industrial growth in the country.

Pakistan, with a consumer market of 170 million people, abundance of raw material, cheap labour and entrepreneurship is endowed with all the requisites to climb the ladder of industrialisation, he said.

Gilani expressed these views at the Ministry of Industries and Production. He also stressed for an early formulation of an industrial policy. He called upon the need for and up-gradation of industry while ensuring transparency to make it competitive.

Gilani while expressing concern over the output of Pakistan Steel directed the ministry to come up with a business plan to make it a productive unit that is financially sound and economically sustainable. He said industrialisation in the country is not only necessary to generate jobs and economic activities for the poor and meet industrial needs of 170 million people but also to claim Pakistan’s rightful share in the global market.

The Prime Minister directed the ministry to achieve the target of setting up utility stores in each union council. Regarding complaints about supply and sale of sub-standard consumer items at utility stores, he directed the corporation to professionalise its working and ensure both quality and quantity of consumer supplies available.

During the meeting, it was observed that in order to reinvigorate the functioning of PIDC, private sector involvement is a must besides linking of various small technological institutions with some major institutions while focusing on Research and Development.

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Wednesday, 10 June 2009 11:38

ISLAMABAD: The government has decided to impose 5 per cent central excise duty on equipment for call centres and CNG kits and other related equipment in the coming budget.

Moreover, 5 per cent duty will also be placed on equipment relating to civil aviation. “Earlier the said two items were expected from the central excise duty and now the government has decided to take back the exemptions by levying CED by 5 per cent,” said a document obtained from the FBR containing the agreed tax budget’s proposals.

It said the FBR also recommended the imposition of 15 per cent customs duty on tufted carpets and needles pinches in addition, the 5 per cent duty have been recommended, as per the document, on machinery and equipment for balancing modernization and replacement (BMR) purposes and one per cent on machinery and equipment for hotel industry and 5 per cent on industrial related equipment.

However, the government is to erase the 15 per cent customs duty on fully dedicated CNG buses to encourage the CNG run vehicles in the country to make environment of the country clean. In addition, the government is to levy 5 per cent CED on cryogenic tank and 20 per cent on iron, steel, and compressed LPG gases. The CED is also being increased by 25 per cent on led panels, which are used in the advertising industry.

However, the customs duty on dyes have been reduced by 5 per cent from 10 to 5 per cent and chemicals from 25 to 20 per cent and other related items from 16 per cent to 10 per cent, but duty on spin finish oil will be increased to 5 per cent.


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Wednesday, 10 June 2009

ISLAMABAD: The state-run Pakistan State Oil may default on the letters of credit backed by sovereign guarantees and opened for the import of motor gasoline, furnace oil and diesel as the entity is in financial crisis because of circular debt in the energy sector. “Outstanding dues of Pakistan State Oil have swelled to Rs94 billion, which the power sector and the Pakistan International Airlines (PIA) owe

to the company,” a senior official at the Ministry of Petroleum and Natural Resources told The News.

If the indifference on the part of government continues, the fuel supply chain will experience an unprecedented stress, which will aggravate power crisis as 70 per cent electricity is generated from diesel-run powerhouses and in case the fuel supply chain gets disturbed the current power deficit will surge to about 3500 MW.

When contacted Dr Asim Hussain, Advisor to prime Minister on Petroleum confirmed that the PSO is running into massive financial miseries owing to which it is nearing collapse for which he is right now writing an SOS letter to Prime Minister and Finance Ministry seeking the immediate payment of outstanding amounting to Rs50 billion against the total dues of Rs94 billion piled up so far.

Dr Asim Hussain said that Finance Ministry’s chief is also well aware of the situation and is to release the required amount against the outstanding after the budget announcement. “We have 15 days left in being declared as default, but I am hopeful that after the budget some reasonable amount will be disbursed to cash stricken PSO.” To a question if the situation is not rectified then, PSO will be declared default, which will have very negative impact on country’s economy.


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Tuesday, 09 June 2009 11:09

ISLAMABAD: President Asif Ali Zardari on Monday said that Pakistan’s oil and gas sector offered great opportunity for investment as the government was pursuing a “visionary approach” based on the principles of de-regularisation, liberalisation and privatisation.

Talking to BRIDAS, Argentinean Oil Company chairman, President Zardari said owing to increasing energy demand over the next five years and low indigenous production, the sector offers great opportunities for investment.

He said that Petroleum Ministry has recently formulated, in consultation with all stakeholders, Petroleum Exploration and Production Policy 2009 which offered great incentives to the investors.

Zardari appreciated the Argentinean Energy Company for showing interest in the Turkmenistan-Afghanistan-Pakistan and India (TAPI) gas pipeline project and also in the exploration and development of gas fields in Balochistan and Sindh.

The President said that the government had set up Interstate Gas System (ISGS) as the project development vehicle company for the TAPI Gas Pipeline Project, the bidding round for which will be shortly advertised by the Ministry of Petroleum and Natural Resources.

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Tuesday, 09 June 2009 11:09

LAHORE: The industrial sector has drawn the attention of the government to the difference of $5.809 billion between 2003 and 2007 in figures of Chinese government for goods exported to Pakistan and the officially recorded imports of these goods in Pakistan.

The local manufacturers point out that though under-invoicing has been in vogue in Pakistan since long, it has never been possible to record its quantum as most of the imports were from open market economies where the officials do not bother if the goods are under-invoiced. However, ever since Pak-China trade started expanding it has become possible to at least document the quantum of under invoicing channelled through Chinese products.

The Chinese economy is still principally controlled by the state and the amount received by the Chinese exporter for under-invoicing the goods to the third country are well documented. The Chinese official data reflects the actual export figures while the data of the importing economy reflects the invoiced amount less the amount paid by the importer to the Chinese supplier in cash.

They pointed out that in 2003 the Chinese government in its exports statistics declared that it has exported goods worth $1854.970 millions to Pakistan but the official figures of imports from China was recorded by the Pakistani government as $1150.363 only during that year. There was a difference of $4704.607 million in the amount quoted on the official sites of both countries.

In 2004 Pakistani government declared that goods worth $1488.774 million were imported from China while the statistics of the Chinese government showed that the goods exported to Pakistan that year were worth $2465.769. The difference between the two countries on the goods imported in to Pakistan enlarged to $976.995 million. In 2005 Chinese claimed to have exported goods worth $33427.662 Pakistan while the local authorities claimed imports of only $2349.395 enlarging the differential in figures to $1078.267 million.

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Tuesday, 09 June 2009 11:09

KARACHI - The private sector advances of the scheduled banks have posted only one percent growth during July-March 2008-09 as against robust growth of 15.1 percent in the corresponding period of last year amid slowdown in business advances demand during the period under review. The YoY trend of private sector advances indicated that deceleration in business sector loans stemmed essentially from the fall in working and trade related loans. In fact, the extent of

deceleration in total working capital loans was strong enough to offset the high growth in fixed investment loans.

A disaggregated analysis given in SBP report reveals that the slowdown in the business sector advances was visible in various sectors including manufacturing, construction, telecom, commerce and trade sectors and other business services.

Report, however, also foresees that the sugar sector may seen higher demand for fixed investment loans in the months ahead as the government has recently allowed a few industrialists to set up new sugar mills.
Also, working capital demand in the cement sector is expected to increase slightly in the period to come

According to the sectoral break-up of private sector advances, the trade related loans exhibited a fall of 0.3 percent during Jul-Mar FY09 compared with strong growth of 24.7 percent in the corresponding period last year. The slowdown was contributed by both the import finance and export loans.

On the other hand, the monthly trend in import finance suggests that the stability in rupee value against US dollar since December 2008 has somewhat eased the downward pressure on import finance against FE-25 loans.

Advances growth to the manufacturing sector decelerated drastically to 7.3 percent during Jul-Mar FY09 compared with robust growth of 19.2 percent in the same period last year. Monthly trend depicts that after recording strong growth in the initial few months of FY09, there was an unusual drop in advances demand during November 2008 onwards, even during Jan-Mar FY09 a number of sectors had seen net retirement which is unlike to previous years.

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Monday, June 8, 2009

HONG KONG -- Hong Kong shares started the week downbeat, as airline stocks retreated on an industry-wide forecast of losses that are double those previously expected. Investors awaited further details of Bain Capital's purchase of a stake in Chinese electronics retailer Gome, as well as a tie-up between Ping An Insurance and Shenzhen Development Bank. Japanese exporter stocks had a brighter Monday, as signs of stabilization in the U.S. job market encouraged a stronger dollar, beating back the yen.

Hong Kong's Hang Seng Index closed down 2.3%, to 18,253,39 points. Airlines stocks took a beating, after the International Air Transport Association estimated the global airline industry will post a loss of about $9 billion, double previous forecasts. China Southern Airlines plunged 4.0% to 2.16 Hong Kong dollars (28 cents).

The H-shares of China Eastern Airlines were put on a trading halt as the air carrier is said to be in merger talks with smaller Shanghai Airlines. The merger has reportedly received formal government approval.

Trading of Ping An Insurance and Shenzhen Development Bank shares were halted, pending an announcement of Ping An's possible purchase of U.S. private equity firm TPG's controlling stake in the Shenzhen bank.

Media reports floated widely Monday that Bain Capital will take a 16% to 18% stake in China's Gome Electrical Appliances Holdings. Gome shares have been suspended from trading since late last year when Gome founder Huang Guangyu was detained by authorities for alleged improper financial conduct. Huang, still in police custody, was once China's richest person.Banking stocks in Hong Kong mostly retreated after last week's rally. Bank of China declined 1.1% to 3.52 Hong Kong dollars (45 cents), while HSBC lost 2.6% to 64.10 Hong Kong dollars ($8.27).

The Shanghai Composite index rose 0.5% to 2,768.34. China Minsheng Banking jumped 5.8% to 7.69 yuan ($1.12), after the lender said over the weekend that it plans to sell up to 3.3 billion new shares in the Hong Kong market, representing about 15% of its enlarged share capital.

Courtesy: Forbes.com

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Courtesy: Associated Press

TOKYO -- Japanese stocks rose Monday as investors took heart from fewer-than-expected U.S. job cuts in May while chasing gains in exporters on the back of a weakening yen.

The benchmark Nikkei 225 stock average rose 97.62 points, or 1 percent, to 9,865.63, an eight-month high. The broader Topix index added 1.1 percent to 926.89.

"Sentiment was steady as export-linked shares climbed in line with a falling yen," said Yutaka Miura, senior strategist at Mizuho Security Co. Ltd.

A weakening yen helps Japanese exporters like Toyota Motor Corp. and Sony Corp. by inflating their overseas income. The yen stood at 98.51 to the dollar in Tokyo Monday afternoon trade from 98.61 in New York late Friday.

The market also rose on optimism over the U.S. economy, which recorded fewer-than-expected U.S. job losses in May.

The Labor Department said Friday U.S. employers cut 345,000 jobs last month, far less than the 520,000 that economists predicted, and the fewest since September.

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