Profit

profit.com.pk Thursday, 03 November, 2011

ISLAMABADaMeR SIaL

NATiONAl Assembly Standing Committee on Pe-troleum on Wednesday advised the PetroleumMinistry to make its implementation mechanismmore effective instead of opting for a new petro-

leum policy every two years which also affects new invest-ment in the oil and gas exploration and production.

CoMMittee MeetiNgThe meeting of the committee was held under the chair-manship of Sardar Talib hassan Nakai which discussednew Petroleum Policy 2011 and other oil and gas sector is-sues. Petroleum Minister Dr Asim hussain explained to thecommittee that the Mashal project for lNG imports wasdropped considering the expensive cost to the domesticconsumers. The project was for supply of imported lNG todomestic consumers. however, the new lNG policy catersto the demands of the industrial sector which could pay theexpensive costs. Briefing the committee on the new Petro-leum Policy 2011, Director General Petroleum ConcessionsSher Khan said the country was faced with a severe energyshortfall and new incentives were required to expedite ex-ploration activities. he said the policy draft has been sentto provinces for comments and will be present before theCouncil of Common interests for approval.

New ProPoSed PoliC yUnder the new proposed policy, he said the new blocks willbe awarded in a transparent manner based upon interna-tional competitive bidding procedure. he said the new pol-icy abolishes previous system of zones and offers a price of$6 per mmBTU for new discoveries instead of bracket ratesof $4.38 to $5.03 mmBTU offered in 2009 policy. he saidshallow discovery will be offered price of $7 mmBTU, deep$8 mmBTU and ultra deep $9 mmBTU. To promote off-shore exploration, a bonanza of $1 per mmBTU will begiven for first three discoveries. he said the new gas pricewill be extended to existing leases provided they enhancetheir production by 20 per cent over and above their ap-proved commitment plan by the government.

Terming the new petroleum policy similar to the oldones, Chaudhary Barjees Tahir of PMl-N advised the min-istry to remove bottlenecks in the policy by making imple-mentation more effective as no petroleum policy hasachieved its targets. he said the government claims Oil andGas Regulatory Authority (OGRA) is fully independent but

its determination to decrease petrol prices by Rs4 per literwas tampered by the ministry of finance which allowedonly a reduction of Rs1.50 per litre.

PettroleUM levyPetroleum minister explained that the parliament hasgiven powers to the government to impose petroleumlevy at Rs10 per litre on petroleum products. he said thefinance ministry has not passed on the full impact as itmight have retained the remaining under petroleumlevy. Chairman Talib Nakai complained that the com-mittee unanimously passed a resolution during the lastmeeting recommending to the Prime Minister to shiftOGRA under the administrative control of the petroleumministry but it was turned down. The committee decidedto call on the PM to protest against non-implementationof their recommendation.

wHite elePHaNt?A heated exchange took place between the acting Chair-man OGRA Sabir hussain and members who termed theentity a white elephant and most corrupt department.hussain claimed that the body consisted of professionalswho were doing their work honestly and allegations ofcorruption were baseless. Syed haider Ali Shah of ANPsaid that the Supreme Court of Pakistan has held the de-gree of the former Chairman OGRA fake, how could hesay the allegations of corruption and inefficiency werebaseless. Dr Donya Aziz of PMl-Q advised that the bu-reaucrats should not make tall claims of their honestyand efficiency as they were paid handsomely for theirwork and integrity by the state. Shahnaz Sheikh of PMl-Q brought the attention of the committee that some in-fluential persons were getting uninterrupted gassupplies even though there was gas load shedding. Men-tioning foreign minister hina Rabbani Khar by name,she said her unit was getting uninterrupted gas supply.She said the matter was raised with the managing direc-tor of Sui Northern Gas Pipelines limited, who said hewas helpless as his wings will burn if he took action. Pe-troleum Minister assured that he would personally lookin the matter and give a report to the committee. Thecommittee decided to adjourn its proceedings as themembers demanded calling ministry of finance officialsto know the mechanism for determining the petroleumlevy and cabinet decretary Nargis Sethi to know whyOGRA could not be transferred under the administrativecontrol of the petroleum ministry.

Pages: 8

g MNa demands investigation into uninterrupted gas supply to industrial unit ofHina rabbani khar g Committee demands implementation on gas supply schemes inmembers constituencies g Committee protests PM’s rejection of recommendations

ISLAMABADStaff RepoRt

While Pakistan was looking forfinancial assistance for theDiamer Bhasha dam, KurramTangi dam and various other

small and medium dams, the United States onWednesday offered technical assistance forstopping glacier melting in the himalayasbordering india and China. One day waterdialogue was held between US and Pakistan onWednesday. US delegation was lead by theUnder Secretary of State for Democracy andGlobal Affairs Maria Otero, while Pakistan waslead by Secretary Water and Power imtiaz Kaziand Chairman of Water and PowerDevelopment Authority Shakil Durrani. Anofficial source said US made no firmcommitment on financial assistance for thereservoirs but offered assistance to counter thefast melting glaciers in the himalayas. US waskeen to offer assistance for glaciology in thehimalayas. it was accepted by the Pakistaniside. The details of cooperation will be workedout in coming weeks. US also advised enhancingthe scope of Federal Flood Commission tocounter floods with better monitoring system.he said the provinces rejected the US demandfor setting up a water regulatory body to reduce

water wastage and better water cost recovery asthey were of the opinion that the indus RiverSystem Authority was managing the functionvery well. however they showed interest innational water policy and welcomed assistancefor stopping water wastage. A statement issuedby the Ministry of Water and Power said USreiterated its commitment to support Pakistanin handling water-related problems. US wouldextend full support to capacity building ofPakistani professionals, improvement ofirrigation system, water conservation. itquoted the Under Secretary of State MariaOtero as saying, “Pakistan is our valued partnerand we would help it come out of troubles”.Secretary Water and Power imtiaz Kazi saidPakistan wants US support in training,capacity building of officials, introduction andimplementation of modern technologies forwater conservation. US officials said there is anactive consideration for cooperation in theconstruction of Diamer Bhasha dam andKurram Tangi dam. it also offered cooperationin the water data collection procedure. Themeeting also discussed and reviewed in detailprogress and recommendation onestablishment of National Water Commissionand formation of National Water Policy. Thenext session of water dialogue will be held inApril 2012 in Washington.

Foreign ExchangeReserves Page 3PTCL’s consolidated earnings reflect true picture Page 8

Pakistan lost $60b of investment in last 3-years 2

US vague on financialassistance for dams

Pak-US water talkS

NA stresses implementation ofpetroleum policy

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ISLAMABADJaLaLuddIn RuMI

ChAiRMAN Board of investment (Boi) Saleem Mandviwalahas said that Pakistan has lost $60 billion worth of invest-ment during the last three years due to the ongoing war onterror coupled with deteriorating law and order situation.

Talking exclusively to Profit, he said that due to the unfavorableenvironment for investment, the country was witnessing a de-creasing trend in Foreign Direct investment (FDi). Mandviwalaexplained that foreign investors are not ready to invest in thecountry due to security concerns and owing to rent seekers thatare worsening the situation due to flight of capital.he said that there is an unseen tussle for a conclusive mandate be-tween the Boi and federal ministries as Boi was not welcomed bythem when it asked them to resolve and streamline the processand issues of foreign investors. “Actually some ministries do notwant Boi to exist as they consider us intruders into their domain.Boi is providing one window opportunity to foreign investors, andpushing ministries to resolve investor’s issues”.

Boi is planning to give an exclusive briefing to President Zardariand Prime Minister Gilani in order to convince them to give Boithe mandate to approve investment projects in the country, espe-cially foreign investment. he explained that this step would revo-lutionise the investment process when foreign investor would befacilitated through one window operation of Boi.Mandviwala laments that unfortunately Boi has become the griev-ance board of investment as investors come to us to resolve theirgrievance which is certainly not the role of Boi as it should focuson measures to bring foreign investment in the country.

The Boi Chairman said that Boi have succeeded in diluting thenegative impression to some extent about investment in Pakistanamong foreign investors. he claimed that the performance and ac-tivity of Boi was unprecedented in history. he agreed though, thatforeign investment is declining and stressed that Boi, by broaden-ing its role in the last three years have succeeded in bringingrecord investment from its platform. he said that by starting a dia-

logue between the stakeholders, Boi have gained identity and visi-bility among the investors.

Saleem Mandviwala said that unfortunately past governments didnot recognise the real potential of this organisation due to which itcould not perform the way it was supposed to. Now the presentgovernment has recognized the potential of Boi and has estab-lished its office at PM Secretariat. Out of total investment, 85 per cent belongs to local investorswhile only 15 per cent belongs to foreign investors a figure thatneeds to go up. he said that in this scenario Boi certainly shouldnot ignore the needs of domestic investors.

Talking about the barriers and delays Boi is facing, Chairman saidthat two projects of $550 million were getting delayed due to redtape. in this fast globalising world, he asked how they could expectan investor to freeze his investment when he has other, better al-ternatives. While briefing regarding future activities for promotion of invest-ment, he said that Boi is organising conferences with Pakistan’sForeign Missions in order to find out ways and means to attractforeign investment into the country. he said due to such stepsBoi will be able to deliver better.he said United Arab emirates (UAe) on the request of Pak-istan is organising an investment conference on November30th at Murree where investors from all over UAe willparticipate and interact with businessmen to identifybetter opportunities for investment here in Pakistan.

he said that Boi has been ableto sign a success-ful deal be-tween SouthKorea’s largeststeelmakerCompanyPOSCO lim-ited and Tuwairqi SteelMills according to whichPOSCO would invest

$200 million for the expansion of Tuwairqi Steel Mills. he hopesthat Korea is soon going to be the biggest investor in Pakistan.The Boi Chairman said that Special economic Zones (SeZ) Bill islikely to be approved by parliament till December. he said thatSeZs would not only aid in bringing investment to the countrybut Boi would play a key role in implementing all the projects.

he said that as a Nation we haveto go for out of the box solu-

tions to enable our countryto achieve sustainable

growth. The Chairmansaid that it is not rightto ask Boi about theannual investmenttarget when every-body knows that theright of investmentstays with the in-

vestor, Boi canonly facilitate.

Thursday, 03 November, 2011

debate02

Pakistan lost $60b of investment in last 3-years

deCreaSiNg foreigN direCt iNveStMeNt

taPPiNg PoteNtial

exClUSive BriefiNg

dilUtiNg Negative iMPreSSioN

g Boi succeeded in diluting the negative impression about investment in Pakistan g 85 per cent local, 15 per cent foreign investment in country g Boi want government to pass mandate of investment from ministries to themselves g $550 investment in doldrums due to unwanted delays

$200 MillioN iNveStMeNt

LAHOREIMRan adnan

iN an exclusive interview withSamsung Product manager AbuNasar Siddiq Alvi, we discuss howSamsung has managed to attract aplethora of customers by developinguser friendly smart phones. We alsodiscuss the potential of smartphonesin the Pakistani market.

Changing the way of communication“Smartphones, tablets and handheld de-vices have changed the way of communi-cation. Connectivity and social networkinghave become the need for everybody, aspeople want to maintain constant connecton the go. Samsung foresees a leadershiprole and is preparing itself to meet the grow-ing demand of mobile handheld devices.”

While speaking to Profit in an exclusive inter-view on Tuesday, Samsung Product Manager

Abu Nasar Siddiq Alvi underscores that thePakistani market is growing at a very fast pace.

Samsung, like other device manufacturers, istrying to cater to the increasing demands of the

indigenous market by introducing a new range ofproducts with more innovative features.

Capitalising potentialhe pointed out that new Wi-Fi hotspots are openingup and telecom operators are looking forward for 3Gtechnology; once connectivity is available the de-mand for such devices, including smartphones andtablets, would multiply. “Though, right now, opera-tors are not offering high-speed connectivity on mo-bile devices, even then people are switching tosmartphones and tablets. it indicates that people

have demand and purchasing power for such prod-ucts and Samsung is preparing to capitalise this po-tential,” Alvi maintained. he underlined that thesegadgets were not luxury anymore, but had become anecessity. The demand for tablets and smartphoneshave witnessed a tremendous increase during the re-cent year. “Samsung foresees a rapidly growing tabletmarket. Because people do not want to carry bulkynotebooks or small screen mobile phone while enjoy-ing multimedia, social networking and internetbrowsing. Samsung believes that tablets will nowcapture the market as it serves the functions of anotebook and a mobile phone,” he said.

Challenge for growthResponding to a query, Alvi said that various blogs andtech-gurus were claiming that Samsung has surpassedits rivals in mobile phone sales, however, the officialnumbers have depicted that Samsung is currentlypolled at second place all across world. Speaking aboutmobile applications, he said that awareness amongusers was a big challenge in the growth of smart de-vices. But local applications and social networking arehelping people understand what they can do withthese modern day gadgets. “People are getting awareabout smart phone features and their usability. Theyare checking weather, updating their social status,reading news and making financial transactions onthe go by using tablets and smartphones,” he added.

Galaxy smart-phones

highlighting the growth of Galaxy series smartphones,Alvi pointed out that Samsung Galaxy S and GalaxySii smartphones had achieved a combined total of 30million global sales. “Galaxy Sii has set a new recordfor Samsung, generating more than 10 million sales –quicker than any device in Samsung’s history. The de-vice also recently received five out of the total ten “Mo-bile Choice Consumer Awards 2011” in the UK as well

as “2011 Gadget Award” for being chosen as the “bestsmartphone of the year” by T3, confirming it as a run-away favorite smartphone with consumers this year.launched in 2010, Samsung Galaxy S reached almost20 million sales, making it the highest-selling mobiledevice in Samsung’s portfolio to date, he concluded.

redefining connectivity the Samsung way

BarrierS to eNtry

The newest entry-level Android smartphone bySamsung, the Samsung Galaxy Y, is expected to be-come the preferred choice for youth, due to the lat-est Gingerbread 2.3 OS. Spec wise the SamsungGalaxy Y is an Android 2.3 Gingerbread handsetpacking a 3-inch QVGA touch screen, with a 2megapixel camera, 832Mhz processor, WiFi, Blue-tooth 3.0, and sports a 1200mAh battery and ofcourse access to the Android Market. With the newSamsung naming game, along with the Galaxy YSamsung also launched the Samsung Galaxy W,Samsung Galaxy Y Pro and Samsung Galaxy MPro. Accordingly, “S” is for Super Smart and forSamsung flagship devices such as the SamsungGalaxy S – “R” is for Royal/Refined and for pre-mium category devices – “W” is for Wonder forhigh-quality strategic models – “M” stands forMagical for high-performance devices with an eco-nomic price point, and “Y” stand for Young, mean-ing entry level handsets or strategic models foremerging markets, while the “Pro” attachmentmeans the device features a QWeRTY keyboard.

SaMSung pRoduCt ManageR aBu naSaR SIddIq aLvI

ChaIRMan BoaRd of InveStMent (BoI) SaLeeM MandvIwaLa

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EVeRY now and then we hear about ourforeign exchange reserves reaching arecord high or low, though with not muchinterest. During a recent visit to the USA,our finance minister Abdul hafeez Sheikh

proclaimed "Pakistan can meet its debt repayments ob-ligations while maintaining foreign exchange reservesof over $16 billion ". A surprising statement consider-ing the shortage of funds at home to provide basic ne-cessities such as electricity and transportation (we all

know current status ofPiA and Pak Railways).One would ask what is thisforeign exchange reserve(or simply forex) actuallyis and is it of any impor-tance?

Well, put simply, it isthe ability of a country'sstate bank to pay for itsmonetary obligations.Simple isn't it but theseobligations are not neces-sarily debt repayments,rather these include pay-

ments against everything and anything that is eitherpurchased by the government or an individual of thatcountry in international market. The "foreign exchangereserve" is the ATM machine they go to to withdrawrequired amounts. it consists of a pool of major cur-rencies and in Pakistan's case it is primarily US dollars,pound sterling and euros.

Major sources of fore are foreign direct/in-directinvestment by multi-national organisations (very rarethese days), remittances by expatriates around theworld (the largest source of foreign exchange incomein pakistan), foreign loans (also one of the major con-tributor to our foreign exchange reserve) and foreignaid (either humanitarian or development aid).

Foreign exchange reserves are also dependentupon trade. A country with a trade surplus enjoys moreeconomic independence and eventually more politicalfreedom, able to work and device its policies au-

tonomously and achieve goals and objectives. Whereasin case of trade deficit, the difference is covered up withloans from "friendly nations and financial institutions"such as USA, iMF and World Bank, which feed corruptleadership to their own agendas and exercise influencefrom foreign policy to increase in electricity tariffs(prime example is of Pakistan). As of today, our foreignexchange reserves are over Rs17 billion and exceededthe $18 billion mark in August for first time in history.On the contrary, our reserves were around $8 billionback in 2008 due to capital flight after the assassina-tion of Benazir Bhutto and political turmoil that fol-lowed under President Musharraf. it seems aremarkable performance by our current government,boasted every now and then by our finance minister,but raw figures not necessarily show the true picture.

The huge increase in our foreign exchange is pri-marily due to additional loans taken by our elected gov-ernment immediately after elections. The result isgradual increase in prices of electricity and petroleumand a gradual decrease in subsidies, all on the adviceof our friends at the iMF. Secondly, the magnanimousincrease in foreign exchange is due to huge foreign aidthat we received after the devastating floods in Punjaband Sindh last year, total approximation of which isstill questionable and damage due to heavy rains thisyear shows that no preventive measures were taken byour government during the past year. Thirdly, the spikein international cotton prices bid up prices of our tex-tile goods, a good 70 per cent of our exports, enablingus to bridge the trade gap. The same amount of exportsis not at all expected this year, reason being torrentialrains in lower Punjab and Sindh caused loss of approx-imately 1.5 million bales of cotton and severe energycrisis, which are forcing not only international but alsolocal investors to move to Dubai, Bangladesh and Srilanka, with energy security and better incentives.

So, instead of making blank statements in US orback home, our finance ministry needs to manage cur-rent reserves extremely cautiously instead of fulfillingone obligation with another loan from iMF, provide in-centives such as tax breaks and discounts on export ori-ented industries, make sure availability of electricity andgas to industry and protection of foreign investment fromany political or economical turmoil and finally document,evaluate and invest purposefully foreign aid receivedfrom international donors. if we continue to avoid suchmeasures, it won’t be long before we hear of yet anotherdelegation of iMF visiting Pakistan to advise on measureto ensure economic stability and development.

The writer is a freelance journalist andeconomic researcher. He can be reached at

[email protected]

IT seems the government dose notsubscribe to the ‘prevention is betterthan cure’ doctrine, at least not withregard to energy concerns. Despiterepeated warnings, relevant authorities

have been unable, rather unwilling, to forestallimminent gas shortage even as fertilisercompanies cried hoarse about shortage andsubsequent hike in food prices. So as winter setsin, we can expect savage gas cuts to domestic andcommercial concerns, compromising agricultureproduction and stoking food inflation. Comingat the heels of severe electricity shortage thatdilapidated industry, production andhouseholds, continued power shortage, in thiscase embodied by unaffordable food, has seriousimplications for the ruling elite.

One, it simply reflects poor planning andpoorer governance. Two, it calls the role ofmarket regulators into question. As observedearlier in this space, if the urea price debatecentred around official concerns of marketmanipulation and cartelisation by fertilisercompanies, then the regulator should haveundertaken serious investigation andsubsequent action prior to winter setting in.

Three, it doesn’t reflect too well on thegovernment’s political acumen, with the landedaristocracy comprising its largest support basenow increasingly agitated due to official neglectof the agri-sector. Four, agriculture has notreceived due attention since the 18thamendment devolved decision-making andrevenue collection to the provinces, leaving theentire sector in limbo. Five, and mostimportantly, despite the centrality of the energynarrative, there is still no concrete action plan toensure adequate supplies in future.

Strangely, islamabad also seems isolatedfrom global social currents. Popular frustrationembodied in the so-called Arab Spring wasactually triggered by people’s marginalisation,with respective official machineries moreinterested in running governments thancountries. At the heart of Tahrir Square was ag-flation, the phenomenon of unwarrantedincrease in food prices. Once popular discontentsnowballs into mass mobilisation, governmentsfind even their staunchest aid-dispensingpatrons reluctant to continue interaction. For itsown sake, as much as the people’s, islamabadwould do well to heed people’s concerns.

Food inflation begins

The huge increasein our foreignexchange is primarilydue to additional loanstaken immediatelyafter elections

Foreign Exchange

Reserves

Rizwan Maqsood

About E›commerce

The idea of a common platform for thoseinterest in shopping from all over theglobe, is an idea indeed is extremely ap-pealing. As long as the platform is userfriendly and more importantly safe,those interested in the exchange wouldbe satisfied and would continue to get in-volved in the practice. e-commercemakes the task of attaining informationand also sharing it, extremely convenientand accessible. To ensure that the globaleconomy continues to prosper, the “in-ternational operation” is definitely goingto enhance the international economicsituation nowadays. And yes, the factthat we can contribute our share to theinternational e-commerce by some veryattractive products is also positive.

tARIqkaRaChI

Revisiting free›marketfundamentalism

The statement that the future of capitalismis being challenged as the financialtsunami that has hit the western world isnow on the brink of washing it away, thor-oughly justifies the current economic sce-nario. We have always been the silentvictims of the western countries in thename of capitalism. We must redefine ourgoals and move towards a just social order.i myself am not a pro-communist, but i dosupport an egalitarian society which has tobe based on the principles of equity. Thewriter has quoted a good example of imranKhan’s rally which truly proved to be asymbol of change and a move towards ajust and equitable social order.

FAIzAn KHwAjALahoRe

E D I T O R I A L

An engineered upsurge?

The weekend was book-ended by two days of amassive bull-run, tallyingup nearly 600 points (278on Friday and 309 on

Monday) at the leading benchmark,the KSe index. The hike took thebourse up within sight of the nextpsychological barrier of 12,000points. That was once again againstthe run of play for most westernmarkets were on a downswing dueto the glory that is no longer Greece.

After that surprise surge, said tohave come owing to a buying bingeby institutional investors, for thelast two successive days the markethas closed in the twilight zone, los-ing 106 points on Tuesday and notby much in the next session.

The market insiders howeverclaim that the upsurge was an engi-neered one, with the big boys com-bining to give it an artificial boost.Some real fillip, says Mr Ali Malik,CeO of the First National equities,will come with another interest ratecut in the next monetary policy –which he again predicts is in theoffing. And the real boon if the cap-ital gains tax goes.

Whatever the case, the timesstay unpredictable and the AverageJoe investor needs to remain on histoes constantly. The announcementsseason, when the excitement is highand frenzied, has fizzled out. And

the next payouts are not that closeby, hence the activity is likely to re-main sluggish – the volumeWednesday was less than 64 millionshares traded.

The fickleness of the markettherefore rules out going for high-end expensive shares, for when theyfall, they fall big – though con-versely when they rise, they risespectacularly. But for the AverageJoe, since total elimination is not anoption when dealing in stocks, min-imising risk is always a priority. Sothe ‘go area’ that one must preferwould be low-end shares where onecould make a decent killing throughquick margins.

Unfortunately, not many areavailable at the moment. As i men-tioned before, somebody had ad-vised me to buy Fatima Fertiliserwhen it was trading at under Rs15apiece. The promise sounded good:

it shall be tradingaround Rs25 in amonth to six weeks.it kept its promise,and has arrivedthere. But it wouldhave been a speculative move then,but one would have felt well withinthe comfort zone going for it. Onedidn’t, and with its books still notbalancing and its main sponsor a bigfish, at the current tab this would bea very risky option – more so as anyfurther capital gain seems unlikely.

While Fatima Fertiliser is nolonger an attractive possibility, fer-tiliser as a sector still retains itscharm because of its huge potentialfor profitability – with each bag pro-duced guaranteed to be sold atprices that have seen a steep hike.

And here with engro havingone issue or another (the latest wasa spat with the excise department),

it is the brace ofFaujis that standout. The more pow-erful of the two isthe parent com-pany, the FFC. And

at Rs180 each (it has come downafter nearly touching Rs200), thisis not yet in the expensive zone, butagain the Average Joe has to weighhis options before taking a plunge.Though the Chhota Fauji, the BinQasim, too has appreciated a greatdeal to trade at Rs60 apiece, thisstill falls in the realm of affordable– another consideration, it is a De-cember closing scrip.

Some really cheap options arestill available in a sector or two, butthe word count is up, so let us leaveit for the next week.

The writer is Sports andMagazines Editor, Pakistan Today

Agha Akbar

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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T h u r s d a y, 0 3 N o v e m b e r, 2 0 1 1

Real fillip is expectedafter another rate cut inthe next monetarypolicy announcement

kUNwar kHUldUNe SHaHidSub-Editor

MaHeeN SyedSub-Editor

average Joe iNveStor

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Thursday,03 November,2011

Materialisation of commitment madefor resolving circular debt and that ofCGT review may disallow the expectedlow volume price erosion session

Hasnain asghar ali at aziz fidahusein04news

Index recovers on accountof OGDC to post minor losses

KarachiStaff report

TRiPle digit decline during earlytrade following regional and in-ternational trend was well coun-

tered singly through low volume strengthin OGDC, thereby allowing the index tore-enter positive zone from deep red,while accumulation in various frontlinestocks on dips along with high volumesin penny stocks and group specific mid-tier stocks made substantial contributionto the turnover. extended holding periodfor MTS borrowers due to eid holidaysalong with volatile and uncertain politicaland economic environment did restricteven the resident participants from mak-ing fresh bets, mainly on strength, thusleading to prolonged stagnation.

After initial trading hours, ap-proval by the cabinet of giving MFN sta-tus to india invited vibrations in thebeneficiaries, mainly the cement stocks,despite the fact that approval from the

parliament might be a tough ask. TheKSe 100 index closed at 11746.09 levelswith the loss of 16.63 points, while KSe30 index lost 77.72 points to close at11056.10 levels. All Share index closedat 8135.62 levels after losing 10.26points. Total 105 scrips advanced 115declined and 93 remain unchanged outof total 313 scrips traded.

Declining volumes with increasingvalues that has become a trend mainlydue to massive decline in number of

participants (thanks to conservativemethod of CGT), prolonged stagnationwill therefore continue to pose a threatmainly on high priced stocks strugglingto find sustainable multiples and facingliquidity crunch due to circular debt.Government’s check on rate increasealong with high and expensive debt willfind the price erosion cyclone hard toresist, however stocks away from thementioned threats will continue to offerconsistent dividend yields along with

reporting growth which can be lookedfor accumulation on dips.

Syndicated activity in various spec-ulative or high price stocks, mainlythose under threat can be looked for off-loading/short selling on low volumestrength, while materialisation of com-mitment made for resolving circulardebt and that of CGT review may disal-low the expected low volume price ero-sion session, said hasnain Asghar Ali atAziz Fidahusein.

CCP first South asian regulatory bodyincluded in gCr’s ‘rating enforcement’ISLAMABAD: The Competition Commission of Pakistan(CCP) Chairperson Rahat Kaunain hassan said that morethan 170 cases of CCP were pending in various courts oflaw, which do act as an impediment in transmitting thereal fruit of actions taken by CCP to the masses. The CCPChairperson while addressing a 12th quarterly meeting ofCompetition Consultative Group (CCG) said that CCP ispursuing expeditious disposal as the outcome of thesepending cases would be crucial in giving a direction bothto CCP as well as to the business community. Shewelcomed the appointment of Competition AppellateTribunal’s Chairman by the government saying that thetribunal is a step forward in resolving the pending cases.The CCP Chairperson while addressing a 12th quarterlymeeting of Competition Consultative Group (CCG) saidthat resolution of the funding issue is crucial to make CCPa sustainable institution and there has been some progressin that regard. Staff RepoRt

adamjee’s ‘invest for life’ toprovide business opportunities LAHORE: Small and medium sized investors willgreatly benefit from synergy of the biggest financialgroup’s companies as they will have a range ofproducts offering good return on their investments,this was stated by Mr Mohsin Ali Shah, head ofinvestment Services MCB, in a press release issuedhere today. he said that Adamjee life’s “invest forlife” in collaboration with MCB investment services, adivision of MCB Bank ltd. is a unique product toprovide investment opportunity to customers whoexpect insurance businesses to bring innovative,secure and high return saving options at a time whenextreme financial uncertainty is prevalent in thecountry, he said. Staff RepoRt

Piaf urges suo motoaction from SC on kalabaghLAHORE: Pakistan industrial and Traders AssociationFront (PiAF) has urged the Chief Justice of Pakistan,Justice iftikhar Mohammad Chaudhry to initiate suomoto proceedings and direct work on Kalabagh Dam ifthe politicians fail to create consensus on this megaproject of national importance. in an issued pressstatement, Chairman PiAF, Sohail lashari said that, thePakistan industrial and Traders Association Front(PiAF) along with other subject specialists and expertswould belie before the judiciary all the wrongperceptions about Kalabagh Dam. he said that it wouldbe proved that the construction of Kalabagh Dam is ofutmost importance to get rid of electricity shortage,closure of industry and unemployment. The KalabaghDam could generate cheap electricity but the federalgovernment shelved the project with one stroke of thepen and utilized all energies to generate costlyelectricity through furnace oil. he also said thatelectricity prices in Bangladesh and india are 9.5 and 9cents respectively while in Pakistan electricity prices are14 cent per unit. Staff RepoRt

agri expo to address farmers’ concernsLAHORE: A two day international agricultureconference and expo arranged by the FarmersAssociates Pakistan (FAP) aimed at highlighting theagriculture, livestock, agro-based industries and foodsector potential, progress and problems. FAPPresident, Dr Tariq Bucha speaking at the concludingsession highlighted the deliberations made at the twoday conference discussing various problems and theirsolutions to ensure a smooth progress in theagriculture sector. Dr Bucha said that soon they wouldbe going to different districts to arrange growers’meetings in order to listen to the problems of thefarmers, search for their resolutions and raising thesehardships at the relevant platforms for their earlysolution. Staff RepoRt

inflation increases to 11 per cent in octoberISLAMABAD: The Consumer Price index (CPi)based inflation has increased to 11 per cent in themonth of October 2011 showing an upward trend fromthe corresponding period last year. Secretary StatisticsDivision, Asif Bajwa while addressing a monthlybriefing on Wednesday said that Sensitive Price index(SPi) based inflation has increased by 6.5 per cent andWhole Sale Price index (WPi) based inflation hassurged by 15.4 per cent during October 2011 againstOctober 2010. Meanwhile, the CPi based inflation hasincreased by 1.4 per cent in October as compared tothe month of September. in October the SPi and WPiincreased by 1.4 per cent and 0.8 per cent overSeptember, last month. JaLaLuddIn RuMI

LCCI asks govt to expedite

work on Pak-Iran pipelineLAHORE

Staff RepoRt

lAhORe Chamber ofCommerce and industryWednesday urged thegovernment to expeditework on iran-Pakistan

gas pipeline and complete it as earlyas possible. in a statement issuedhere, the lCCi President irfan QaiserSheikh said that lahore Chamber ofCommerce and industry had crediblereports that the work on this multi-million dollar project is stalled for un-known reasons but was unable tounderstand the causes of the delay inthis highly beneficial project of na-tional importance when the gas pric-ing formula had already agreed in2009 and Tehran and islamabad had

also inked the final agreement tolaunch the project by spring 2014.

The lCCi President said that theiranian government had alreadycompleted their part of the projectand if Pakistani authorities showsome interest, the pipeline wouldcomplete much earlier than the stip-ulated period which is actually theneed of the hour.

irfan Qaiser Sheikh said that thesevere shortage of gas in the countrycalls for extraordinary measures onwar footing and the people sitting atthe helm of affairs should gear uptheir efforts for the early completionof the project.

he said that the governmentshould also take the business com-munity in general and the lahoreChamber of Commerce & industry in

particular on board on this project asthe shortage in the province of Pun-jab exacerbates to further severity.Since there is no shortage in theother provinces so that industrialistswho are planning to shift their oper-ations to other countries could beasked to shelve their plans.

The lCCi President said thatthere a huge number of industrieswhere the gas is basic raw materialand due to its acute shortage therewould be no work in these unitswhile the graph of unemploymentwould go up further.

irfan Qaiser Sheikh said that ifthe federal government takes theprivate sector on board on this megaproject it would not be adding anycost to it but definitely ensure itsearly completion.

he said that the reports about sus-pension of work on Pakistan-iran gaspipeline had sent a very wrong signalto the private sector that needs to becorrected by restarting work on thisproject so that they could be able to dotheir businesses with peace of mind.According to the project proposal, thepipeline will begin from iran's Assa-louyeh energy Zone in the south andstretch over 1,100 km through iran. inPakistan, it will pass through Baluchis-tan and Sindh but officials now say theroute may be changed if China agrees tothe project. The gas will be suppliedfrom the South Pars field. The initialcapacity of the pipeline will be 22 bil-lion cubic meters of natural gas perannum, which is expected to be raisedto 55 billion cubic meters. it is ex-pected to cost $7.4 billion.

low gaspressure damagingindustrial output

KARACHIStaff RepoRt

TRADeRS and industrialists inBin Qasim industrial zonesWednesday expressed their

grave concern over persistent low gaspressure in the industrial zones. Theindustrialists expressed their concern ina statement issued jointly by MianMuhammed Ahmed, Patron-in-Chief,President Usman Ahmed, Vice PresidentAbdul Rasheed Jan Mohammed,chairman law committee Shakil Ashfaqand the managing committee of BinQasim Association of Trade andindustry (BQATi). Usman Ahmed,President BQATi, briefed that the BinQasim industrial zone was getting gaspressure as low as 1-2 psi.

ISLAMABADStaff Report

The Competition Commis-sion of Pakistan (CCP)Chairperson Rahat Kau-

nain hassan said that more than170 cases of CCP were pending invarious courts of law, which do actas an impediment in transmittingthe real fruit of actions taken byCCP to the masses.

The CCP Chairperson whileaddressing a 12th quarterly meet-ing of Competition ConsultativeGroup (CCG) said that CCP is pur-suing expeditious disposal as theoutcome of these pending caseswould be crucial in giving a direc-tion both to CCP as well as to thebusiness community. She wel-

comed the appointment of Compe-tition Appellate Tribunal’s Chair-man by the government sayingthat the tribunal is a step forwardin resolving the pending cases.

The CCP Chairperson whileaddressing a 12th quarterly meet-ing of Competition ConsultativeGroup (CCG) said that resolutionof the funding issue is crucial tomake CCP a sustainable institu-tion and there has been someprogress in that regard.

The CCP Chairperson whileenumerating the factors leading tomaking CCP a robust law enforce-ment agency said that dedicationand hard work of the tenaciousteam members of CCP have led theinstitution to become the first reg-ulatory authority from South Asia

– ahead of its counterparts inChina, india and Singapore – to beincluded in the Global Competi-tion Review’s Annual “Rating en-forcement.”

”Global Competition Review(GCR) is the world’s leading anti-trust and competition law journalthat is chiefly consulted bylawyers, competition authorities,economists and academics to keepabreast of the latest developmentsin competition law.

it is told that CCP has ‘reducedcosts by 20 per cent since 2009,and is reaching a 40 per cent re-duction this year’. The assessmentcommends this efficiency and ob-serves that it ‘shows the authorityis managing to up the pace of en-forcement while reducing costs.

CCP included in GCR’s‘Rating Enforcement’

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Thursday,03 October,2011

news

CORPORATE CORNER

Bok raast islamic Bankingstarts operations in Sarai Naurang

LAkkI MARwAt: Mr Bilal Mustafa, ManagingDirector Bank of Khyber (BOK) while speaking at theformal inauguration of BOK Raast islamic Bankingbranch at Sarai Naurang Distt. said that BOK iscommitted to cater the Banking requirements ofislamic Banking as well as conventional in a befittingmanner. The inaugural ceremony was attended byBOK’s executive Director, Mir Javed hashmat, BOKislamic Bank Group’s Acting head, Mr ShabbeerAhmad Sheikh, head islamic Business Development,Mr Sohail Khan along with other notables of thebusiness community.pReSS ReLeaSe

UePl donatesrs23 million for flood reliefLAHORE: United energy Pakistan limited(UePl), which recently acquired BP Pakistan’supstream business, has made available about Rs23million for flood relief in lower Sindh. Thiscontribution is part of UePl’s commitment to thepeople among which it operates. ApproximatelyRs21.5 million has been contributed by UePl forflood hit concession areas in Badin, TandoMuhammad Khan, Matiari, Tando Allahyar andSanghar districts. The remaining Rs1.5 million hasbeen raised through an employee Donation drivewith staff contributing generously to supplement

the company’s efforts.

two days workshop organised bywafaqi Mohtasib office (UNdP)

ISLAMABAD: A two-day workshop on‘Mediation as an Alternative Dispute ResolutionMechanism’ was organised by Wafaqi MohtasibOffice / SPGRM project of UNDP in collaborationwith Karachi Centre of Dispute Resolution (KCDR)at Marriott hotel, islamabad. A number ofactivities were organised during the workshopwhich helped the participants in enhancing theirskills for mediation during the process ofcomplaints resolving. pReSS ReLeaSe

duPont Pakistan provides MedicalSupport to SoS Children’s village

kARAcHI: DuPont Pakistan Operations (Pvt)ltd under the DuPont Community Fund Program[DCF] will contribute to SOS Children’s Village

Community Clinic and fund medical and clinicalexpenses for the year. Under this program, almost200 SOS Village children and over 35 residentmothers and domestic staff will have access to freemedical check-ups, medicines, dentalexamination, free screening of new admissionsincluding lab tests, ultrasound, x-rays andvaccinations. pReSS ReLeaSe

Make-a-wish volunteergets diana award

kARAcHI: Make-A-Wish Pakistan organisedaward presentation ceremony of first ever Dianaaward to their dedicated volunteer, AymenSaleem. The award was presented to her at agraceful ceremony by British Deputy highCommissioner, Francis Campbell. The ceremonywas attended by Nisar Khoro - Speaker SindhAssembly, Jam Madad Ali – Minister for Scienceand Technology, Mohammad Ali Shah - Ministerfor Sports, Dr. Mirza ikhtiar Baig - Advisor toPrime Minister on Textile, S. M. Muneer, FormerTest Cricketer, Saleem Yousuf. pReSS ReLeaSe

Nutshell conference speakershighlight need for good governance LAHORE: leading Pakistani entrepreneurs,corporate heads, consultants and other speakers

and panellists at the 3rd lahore Management andhRD Summit organised by the Nutshell Forum,highlighted the need for good governance andstrong leadership in the country at all levels, inorder to harness the huge potential Pakistanpossesses in several areas, including its humanresource. pReSS ReLeaSe

Cash Prize for MCB Security guards

kARAcHI: in view of display of dauntless courageand high sense of responsibility by Security Guards,Khan Muhammad and Abdul Qudus, foiling a theftattempt, a cash prize of Rs50,000 each wasawarded by Mr Kamran Rasool, Advisor to thePresident MCB.pReSS ReLeaSe

Papandreou'sannouncement of areferendum took the wholeof Europe by surprise

LahoRe: Caption: Ceo Indus Motor Company, Mrparvez ghias receiving a memento from edB Chairman,Mr aitizaz niazi for being a lead sponsor of auto partsShow held recently in Lahore. PRESS RELEASE

France, Germany demandGreek decision on euro

pARISReuteRS

GeRMANY and Francetold Greece on Wednes-day it should make upits mind by mid-Decem-ber whether it wants to

stay in the euro zone when Greeksvote on a 130-billion-euro ($178 bil-lion) bailout.

French President Nicolas Sarkozyand Germany's Angela Merkel sum-moned George Papandreou for crisistalks in Cannes, before a G20 summitof major world economies, to push forrapid implementation of measures totackle the euro zone debt crisis, whichAthens has thrown into doubt.

Sarkozy said Papandreou's an-nouncement of a referendum "tookthe whole of europe by surprise" andhis prime minister, Francois Fillon,told parliament: "europe cannot bekept waiting for weeks for the out-come of the referendum. "The Greeksmust say quickly and without ambi-guity whether they choose to keeptheir place in the euro zone or not."Opinion polls suggest most Greeksthink the deal thrashed out by eurozone leaders last week is a bad one,but much will depend on how Papan-dreou frames the debate, either onthe bailout -- and the painful cuts itdemands -- or membership of theeuro, which remains popular.Greece's european partners willpress for the latter.

German Chancellor Merkel struckthe same tone of exasperation and

impatience as Fillon in comments be-fore flying to Cannes for hastilyarranged meetings of europeanUnion policymakers (1630 GMT) andwith Papandreou (1930 GMT).

"We agreed a plan for Greece lastweek. We want to put this plan intopractice, but for this we need clarityand the meeting tonight should helpwith precisely this," she told a newsconference with Turkish Prime Minis-ter Tayyip erdogan. Germany's financeministry hinted that european part-ners and the international MonetaryFund may withhold the next 8 billioneuro aid installment to Athens, duethis month, until after the referendum.

"The tranche has not yet beenpaid. That is the situation today. howthings proceed is yet to be seen. Butaccording to everything we hear fromGreece, there is no urgent need forthe payout until mid-December,more or less," finance ministryspokesman Martin Kotthaus said. eUleaders endorsed the disbursement ofthe money last week, but the iMFboard has yet to set a date for a deci-sion. An iMF source said the way for-ward would depend on the outcomeof Wednesday's eU talks with Papan-dreou, which iMF Managing DirectorChristine lagarde will join.

French officials said Papan-dreou would be pressed to put thebailout deal to parliament first inhopes of reassuring financial mar-kets which panicked when he calledthe plebiscite.

WEEKS OF UNCERTAINTYWin or lose, his gamble guaran-

tees weeks of uncertainty just as the17-nation european currency area isdesperate for a period of calm to im-plement the remedies agreed to cor-ral its sovereign debt crisis. Some inPapandreou's party called for him toquit, accusing him of endangeringeuro membership with his shock de-cision to call a popular vote, a movethat pummeled the euro and stocks.

The Socialist prime minister bat-tled late into the night to win cabinetsupport, giving him at least a stay ofexecution before a confidence vote inparliament on Friday. "The referen-dum will be a clear mandate and aclear message inside and outsideGreece on our european course andparticipation in the euro," Papan-dreou told a cabinet meeting thatlasted seven hours.

european Commission chief JoseManuel Barroso urged Greeks tounite in support of the bailout plan,warning that the alternative would betoo ghastly to predict. "Without theagreement of Greece to the eU/iMFprogram, the conditions for Greekcitizens would become much morepainful, in particular for the mostvulnerable. The consequences wouldbe impossible to foresee," he said.

if Papandreou wins the confi-dence vote, the euro zone faces a pe-riod of policy vacuum in whichmarkets can create havoc. if heloses, Greece faces a disorderly de-fault which would hammer europe'sbanks and threaten the much largereconomies of italy and Spain, whichthe bloc may not have the means to

bail out. As a result, the Greek pre-mier's move has aroused anger andsurprise in equal measure aroundthe world. "That's enough now:Greeks out!" Kronen Zeitung, Aus-tria's biggest-selling paper, said onits front page. The chairman of eurozone finance ministers, Jean-ClaudeJuncker, said Greece could go bank-rupt if voters rejected the bailoutpackage and Japanese Finance Min-ister Jun Azumi said: "everyone isbewildered."

Juncker, european Council Pres-ident herman Van Rompuy, euro-pean Commission President JoseManuel Barroso, iMF chief Christinelagarde and an eCB official will alsoattend Wednesday's talks in thesouthern French resort town.

ECB IN SPOTLIGHTDoubt about europe's ability to

contain the debt crisis has once moresent markets into a spin and put italyfirmly in the firing line.

The risk premium on italianbonds over safe-haven GermanBunds hit a euro-lifetime high onTuesday, despite european CentralBank buying of its bonds. ireland's fi-nance minister said the eCB wouldbe forced to pledge "a wall of money"to buy bonds, something many of itspolicymakers are deeply uncomfort-able about. Until the Greek situationis clearer, last week's package ofmeasures is likely to be in limbo,leaving the eCB as the only bulwarkagainst market attacks.

The head of Germany's bankingassociation, Michael Kemmer, said

agreement on a 50 percent write-down of Greek debt by its privatecreditors would have to wait. "i can'timagine a debt exchange taking placebefore the referendum," he said.Greek Conservative opposition leaderAntonis Samaras said Papandreouhad acted as a one-man roadblock.

"how can banks accept a haircuton their debt if they don't know ifGreece accepts it in the first place?" hetold lawmakers in a speech. "Papan-dreou has put the country in the cen-ter of a global storm ... a governmentin such a state of panic is dangerousand must leave as soon as possible."Meanwhile, another premier underfire, italy's Silvio Berlusconi scram-bled to come up with measures to pla-cate markets, seeing senior aides andministers ahead of an expected meet-ing of the cabinet later.

TIMING, RESULT IN DOUBTGreek government spokesman

ilias Mosialos said the referendumwould take place "as soon as possible,right after the basics of the bailoutdeal are formulated."

Greek officials had suggested itwould probably be held in mid-Janu-ary but the interior minister said itcould happen as early as December.

The Greek press, including dailiestraditionally friendly to the govern-ment, almost unanimously con-demned Papandreou. Center-leftnewspaper eleftherotypia describedthe prime minister on its front pageas "The lord of Chaos." ethnos, an-other pro-government paper, calledthe referendum "suicidal."

french President Nicolas Sarkozy

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top 5 perForMers sector wiseSyMBol oPeN HigH low CUrreNt CHaNge volUMe SyMBol oPeN HigH low CUrreNt CHaNge volUMe

Food ProducersAbdullah Shah 8.00 8.00 7.00 8.00 0.00 53Colony Sugar Mills 1.75 1.75 1.70 1.74 -0.01 23,501Engro Foods Ltd. 23.52 23.90 22.50 22.54 -0.98 91,748Habib Sugar Mills 28.10 28.50 27.50 27.88 -0.22 70,820Habib-ADM Ltd.XD 11.58 11.70 11.50 11.50 -0.08 2,995

Household Goods(Colony) Thal 1.70 1.11 1.11 1.11 -0.59 1,000AL-Qadir Textile 11.25 11.25 11.25 11.25 0.00 500Amtex Limited 1.67 1.70 1.45 1.60 -0.07 132,822Annoor Textile 13.00 14.00 14.00 14.00 1.00 1,000Artistic Denim XD 18.50 18.50 18.25 18.49 -0.01 1,049

Personal GoodsAHCL-NOV 31.00 31.00 29.45 29.51 -1.49 376,500AHCL-OCT 30.82 30.82 29.28 29.32 -1.50 516,500ANL-OCT 4.01 4.25 3.90 3.95 -0.06 24,500ATRL-NOV 120.42 121.50 117.90 119.21 -1.21 201,000ATRL-OCT 119.16 120.30 116.50 117.71 -1.45 200,000

Future ContractsAbbott Laboratories 102.49 103.00 101.00 102.10 -0.39 1,283Ferozsons (Lab) Ltd. 80.00 80.00 78.10 80.00 0.00 45GlaxoSmithKline Pak. 68.92 68.26 67.01 68.06 -0.86 1,557Highnoon (Lab) 28.09 28.09 27.65 28.09 0.00 100IBL HealthCare XD 10.92 11.92 10.99 11.92 1.00 25,154

Pharma and Bio TechP.T.C.L.A 10.89 10.98 10.65 10.71 -0.18 470,873Pak Datacom LtdXD 35.03 34.01 34.01 34.01 -1.02 500Telecard Limited 0.95 1.00 0.90 0.90 -0.05 68,502Wateen Telecom Ltd .68 1.70 1.52 1.65 -0.03 152,954WorldCall Telecom 1.13 1.19 1.00 1.06 -0.07 235,458

Fixed Line TelecommunicationP.T.C.L.A 11.47 11.77 11.42 11.64 0.17 4,752,418Pak Datacom Ltd. 31.65 32.66 31.65 32.66 1.01 1,430Telecard Limited 1.09 1.09 1.01 1.03 -0.06 194,249Wateen Telecom Ltd 1.51 1.68 1.47 1.50 -0.01 449,333WorldCall Telecom 1.32 1.35 1.15 1.28 -0.04 649,632

ElectricityGenertech 0.50 0.50 0.36 0.50 0.00 1Hub Power Co.XD 36.38 36.50 36.10 36.10 -0.28 1,022,035Japan Power 0.75 0.77 0.70 0.71 -0.04 38,682K.E.S.C. XR 1.70 1.70 1.56 1.60 -0.10 752,756Kot Addu PowerXD 41.36 41.80 41.25 41.53 0.17 220,355

BanksAllied Bank Ltd 63.16 64.00 62.50 62.69 -0.47 32,694Askari Bank 11.15 11.29 10.75 10.89 -0.26 944,906B.O.Punjab 5.94 6.08 5.79 5.83 -0.11 319,287Bank Al-Falah 11.15 11.35 10.70 10.89 -0.26 1,929,563Bank AL-Habib 29.95 30.20 29.55 29.91 -0.04 175,090

Non Life InsuranceAdamjee Ins XD 49.64 49.50 48.60 49.40 -0.24 6,785Ask.Gen.Insurance 8.50 8.50 8.10 8.47 -0.03 1,651Atlas Insurance 34.49 35.00 33.86 33.99 -0.50 1,110Central Ins Co. 48.67 50.00 48.00 49.79 1.12 3,909Century Insurance 7.16 7.50 7.06 7.50 0.34 1,500

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 0.32 0.35 0.22 0.30 -0.02 9,463Arif Habib InvesXD 15.89 15.50 14.89 14.89 -1.00 13,487Arif Habib Ltd. 17.96 18.34 17.20 17.71 -0.25 19,659Dawood Equities 0.88 1.09 0.86 0.86 -0.02 9,495Invest & Fin.Sec. 7.26 7.26 7.25 7.25 -0.01 2,100

Equity Investment Instruments1st.Fid.Leasing Mod 1.70 1.50 1.50 1.50 -0.20 15,000AL-Noor ModarXD 3.98 4.00 3.60 4.00 0.02 25,100Allied RentalModXDXB 19.90 19.90 19.88 19.90 0.00 3,700Atlas Fund of Fund 6.00 6.10 5.90 5.90 -0.10 414,000B.F.ModarabaXD 5.56 5.56 5.00 5.56 0.00 7

MiscellaneousCentury Paper 14.50 14.25 14.00 14.20 -0.30 12,700Pak Paper Prod.XD 32.07 32.99 32.07 32.07 0.00 1Security Paper 36.02 37.10 36.02 36.02 0.00 452Pakistan Cables 34.50 35.00 34.00 34.40 -0.10 500P.N.S.C.XD 16.50 16.21 16.10 16.10 -0.40 3,000Pak.Int.Con. SD 68.80 70.30 69.00 69.00 0.20 603TRG Pakistan Ltd. 1.66 1.84 1.61 1.72 0.06 672,980Murree BreweryXDXB 72.21 72.98 71.99 72.31 0.10 356Pak Elektron Ltd. 4.40 4.44 4.13 4.39 -0.01 14,841Tariq GlassXD 8.64 8.73 8.50 8.54 -0.10 9,125Shifa Int.Hosp.XD 30.57 30.75 29.75 29.85 -0.72 76,099Hum Network XD 16.50 16.48 16.48 16.48 -0.02 1,000P.I.A.C.(A) 2.00 2.15 1.92 2.00 0.00 135,521Sui North GasXDXB 17.80 18.20 17.65 18.17 0.37 46,126Sui South GasXDXB 20.39 20.85 19.90 20.77 0.38 57,695East West Life Assur 1.40 1.25 1.25 1.25 -0.15 1,000EFU Life Assur 69.50 69.10 69.10 69.10 -0.40 500New Jub. Life 61.00 63.00 61.00 61.00 0.00 53AKD Capital Ltd.XD 26.73 26.73 26.00 26.73 0.00 400Pace (Pak) Ltd. 1.73 1.94 1.67 1.81 0.08 2,810,071Netsol Technologies 11.11 11.27 10.68 11.05 -0.06 306,858Pak Telephone 2.60 2.80 2.60 2.60 0.00 31

SyMBol oPeN HigH low CUrreNt CHaNge volUMe

Oil and GasAttock PetroleumXD 403.85 404.69 396.00 396.87 -6.98 61,485Attock Ref.XD 118.78 120.40 116.10 117.57 -1.21 833,559Byco Petroleum 6.89 6.98 6.75 6.77 -0.12 399,510Mari Gas Co.XB 91.01 93.80 89.30 92.03 1.02 91,674National Ref.XD 325.19 334.90 308.94 310.82 -14.37 314,938

ChemicalsAgritech Ltd. 15.00 15.00 14.00 15.00 0.00 1,500Arif Habib CoXDXB SD 30.83 31.05 29.29 29.30 -1.53 2,485,646Biafo IndustriesXD 68.59 71.99 65.17 70.64 2.05 855Clariant Pakistan 140.69 143.49 137.50 139.79 -0.90 4,017Dawood Hercules 38.96 40.80 37.06 37.39 -1.57 244,529

Industrial metals and MiningCrescent Steel 23.90 24.70 23.25 23.59 -0.31 40,885Dost Steels Ltd. 1.45 1.50 1.41 1.45 0.00 8,285Huffaz Seamless Pipe 8.93 9.00 8.60 9.00 0.07 3,035Int. Ind.Ltd. 34.98 35.00 34.00 34.50 -0.48 25,300Inter.Steel Ltd. 11.56 11.52 11.00 11.00 -0.56 63,850

Construction and MaterialsAl-Abbas Cement 2.00 2.00 1.90 1.92 -0.08 26,799Attock CementXD 51.11 51.99 50.81 51.02 -0.09 108,952Berger Paints 11.79 12.00 11.60 11.91 0.12 4,762Bestway Cement 8.11 9.11 8.11 8.11 0.00 100Cherat Cement 7.66 8.19 7.50 8.01 0.35 197,042

General IndustrialsCherat PackagingXD 29.62 30.40 28.14 28.14 -1.48 14,022ECOPACK Ltd 2.49 3.25 2.21 3.08 0.59 614,084Ghani Glass LtdXD 41.17 42.00 39.12 39.60 -1.57 16,802MACPAC Films 7.72 7.95 7.01 7.65 -0.07 993Merit Pack 22.00 22.00 20.95 22.00 0.00 70

Industrial EngineeringAdos Pakistan 6.93 7.90 6.93 6.93 0.00 10AL-Ghazi Tractors 184.30 184.30 184.30 184.30 0.00 90Bolan CastingXD 28.50 28.50 28.25 28.26 -0.24 5,055Ghandhara Ind. 7.00 6.90 6.25 6.70 -0.30 5,004Hinopak Motor 108.00 108.00 102.60 108.00 0.00 2

Automobile and PartsAgriautos Indus.XD 58.00 58.00 58.00 58.00 0.00 2,000Atlas Battery Ltd. 169.52 170.00 168.50 168.94 -0.58 240Atlas Honda Ltd. 117.00 118.00 117.00 117.94 0.94 302Dewan Motors 2.63 2.79 2.43 2.51 -0.12 39,802Exide (PAK) 168.53 169.99 168.53 168.53 0.00 31

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 NavAlfalah 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 NavHBL Money Market Fund 100.2768 100.2768 100.2768 HBL Multi Asset Fund 87.0103 85.3042 85.3042 HBL Stock Fund 97.6745 95.2922 95.2922 IGI Income Fund 101.8987 100.8898 100.8898IGI Stock Fund 112.3545 109.6141 109.6141 JS Principal Secure Fund I 121.5000 111.5200 117.3900 JS Principal Secure Fund II 104.1200 96.5000 101.5800 KASB Cash Fund 0.0000 0.0000 100.1087Lakson Equity Fund 106.3763 103.2779 103.2779

Markets

Thursday, 03 November, 2011

06

top 10 sectors

41% 02%Construction & Materials

Chemicals Food Producers

03%Electricity

20%05%

Fixed Line Telecommunication

01%Equity Investment Instruments

Real Estate Investment

08%Banks07%Oil & Gas07%Personal Goods06%

International Oil PriceWTICrude Oil

$92.36

BrentCrude Oil

$109.94

STOCK MARKET HIGHLIGHTS

Index Change Volume Market ValueKSE-100 11746.09 -16.63 45,315,448 2,930,559,694LSE-25 3161.81 -0.5 1,379,156 47,180,437ISE-10 2550.54 -7.44 7,200 640,780

Major Gainers

Company Open High Low Close Change TurnoverAttock Petroleum 414.95 430.00 409.60 422.58 7.63 195,498Service Industries 200.10 205.00 203.49 204.99 4.89 851National Ref.XD 315.34 324.78 312.00 319.91 4.57 121,608Millat Tractors Ltd. 384.47 389.45 381.25 387.40 2.93 10,065ICI Pakistan 131.69 137.00 131.00 133.57 1.88 75,460

Major Losers

Siemens Pak 934.82 900.00 900.00 900.00 -34.82 64Wyeth Pak Limited 699.99 676.10 669.69 672.34 -27.65 39Fauji Fertilizer 189.25 185.50 180.00 180.92 -8.33 3,830,632Pak OilfieldsXD 356.11 354.50 350.50 351.25 -4.86 623,624UniLever Pak Ltd. 5737.80 5794.00 5680.00 5733.00 -4.80 9

Volume Leaders

Fatima Fert.Co. 25.29 25.60 24.41 25.01 -0.28 8,591,710Wateen Telecom Ltd 1.96 2.43 1.97 2.08 0.12 8,132,967Engro Corporation 124.14 125.44 120.80 123.99 -0.15 4,751,408Fauji Fert Bin Qasim 60.49 60.55 59.11 59.96 -0.53 4,639,421Fauji Fertilizer 189.25 185.50 180.00 180.92 -8.33 3,830,632

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

Gold 24K 55,804.00 47,894.00 1728.00Gold 22K 51,608.00 44,245.00 –Silver (Tezabi) 1133.00 973.00 35.05Silver (Thobi) 1025.00 880.00 –

Interbank RatesUS Dollar 86.0200UK Pound 137.6836Japanese Yen 1.1020Euro 118.3979

Buy SellUS Dollar 86.10 86.80Euro 117.88 120.04Great Britain Pound 136.79 139.20Japanese Yen 1.0915 1.1134Canadian Dollar 83.96 87.79Hong Kong Dollar 10.86 11.19UAE Dirham 23.30 23.64Saudi Riyal 22.77 23.14

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07

Thursday,03 November,2011

closing bell

A B C D E F G H

8

7

6

5

4

3

2

1

White to play: play and mate in four moves

ReadIng the Lead

CheSS

BoondoCkS

dILBeRt

gaRfIeLd

BaLdo

sudoku solution

crossword solution

chess solution

Today’s soluTions

1.qe7+ kh6 2.qxh7+ kxh7 3.Re7+ kh64.Rh8# 1-0

Your desires are

stronger than ever

right now, and you should find

that you can get closer to

achieving them without

breaking a sweat. Others may

look on with envy, but that's

par for the course.

ariesYou are doing your

best to stand up for

tradition -- but even

you know when you're beat.

Something new and untested is

coming your way, and you're

not so sure you'll like it. Things

will be better soon, though!

taurusYour idealistic

nature needs a

workout, so get out there and

make a difference! Your great

mental energy guarantees

that you are able to show at

least one person how things

ought to be.

gemini

Different people

have different

ideas about what ought to come

next, and you're not sure you

agree with them. The good news

is that you only need to smile

and hear them out -- nothing is

settled until at least tomorrow.

cancer

Finances are still

on your mind, so

now is the best time for you

to step up and take care of

the future. You may need to

invest, consider your

retirement or just work to

stop some excess spending.

It's a good day to

lash out at those

who are trying to bring you

down -- though outsiders

are sure to see this as a

simple clash of egos. Your

energy is just right for a big

dust-up!

leo

Change is coming --

and you are leading the

way! Speak up early, so

others can see what you want

and how you think it can be

gotten. Life is getting better

and better, so make the most

of it now!

aQuarius

Try to take

care of

business a little differently

today -- things are looking up

for you, and that could mean

that it's time for a change.

You need to take advantage of

this period of uncertainty.

virgo

Your dreaming

life is even

more important than usual

today, so make sure that

you're paying close attention

and recording the details you

can remember. They should

be important clues today!

piscescapricorn

Your love life is

peaking now,

whether you know it or not. It

could be that a secret admirer

is just about to make

themselves known to you, or

that your current sweetie lays

out all their cards.

libraYou can usually

count on a measure of

tranquility around the

house, but right now, things

are tough. You might need to

sneak away for some quiet

time before heading back into

the fray.

scorpioTalk to that stranger,

no matter how

intimidated you may feel.

The odds are they feel the

same way, and things could

start to really get going once

you break the ice. Use that

great energy!

sagittarius

BRIdge

CRoSSwoRd

fill in all the squares in the grid so that each row,

column and each of the squares contains all the digits.

the object is to insert the numbers in the boxes to

satisfy only one condition: each row, column and 3x3

box must contain the digits 1 through 9 exactly once.

how to pLay

woRd SeaRCh

ACROSS

5 Like the words "deed" or "rotor" (11)

7 expand (4)

8 final whistle (4,4)

9 Small flat sweet cake (7)

11 Illegally put to death (5)

13 Single (5)

14 XvI (7)

16 Care of the hands (8)

17 Low dam across a stream (4)

18 powerful cross-bred dog (4,7)

DOWN

1 fault (4)

2 kick the bucket (5,2)

3 drily amusing (5)

4 transparent bluish quartz (8)

5 tightly curled fur used in clothing (7,4)

6 humour used in a serious context to relieve tension (5,6)

10 velvety cord used in clothing, carpets etc — hellenic (anag) (8)

12 new orleans (3,4)

15 Mother (found in ancient egypt?) (5)

17 Supporter of the British political party that preceded the

Liberals (4)

ashtray

betray

bolster

boudoir

bravado

budget

callous

contain

convert

correct

cuticle

diploma

droplet

dutiful

easel

fare

fatigue

fighter

fissure

forlorn

frigate

gallant

ghastly

gondola

habit

harvest

heinous

hopeful

however

hymn

illness

learned

liable

mope

onerous

policy

preach

retract

romance

scandal

solicit

sore

thresh

your

CM

YK

CMYK

Sudoku

“You need

strong

medicine to

relieve your

stress. I’m

prescribing a

puppy.”

Profit for e-paper_Layout 1 11/4/2011 10:17 AM Page 7

Thursday,03 November,2011

as india is eyeing other important marketsof the region where Pakistan enjoysgeographical benefits, we can also face huge losses in terms of exports to these countries

news

08

KARACHI ISMaIL dILawaR

ONGOiNG frequency in the injec-tion of billions of liquidity into thebanking system could well be in-terpreted as a severe rupee short-

fall in the money market, however, themammoth bids by the banks for buying risk-free government securities leaves one with nooption but to smell a rate.

State Bank of Pakistan (SBP) is pumpingbillion of rupees on a weekly basis into thelocal banking system to avoid, the centralbankers confirm, an imminent liquiditycrunch the scheduled banks were nearing tobecause of excessive budgetary borrowings bythe cash-strapped government.

According to SBP figures, during the lastfour-month period, from 17th July to 28th Oc-tober, the central bank had conducted at least25 consecutive reverse repo operations and hadinjected a huge sum of over Rs3.204 trillion tocater to the banks’ liquidity needs. Officials atthe State Bank have confirmed to Profit that theinjections by the regulators were due to unavail-ability of liquidity with the banks. But, the factthat the same cash-strapped banks come upwith extensive bids when it comes to buying therisk-free and heavily-weighted government se-curities in the SBP auctions. Wednesday saw thebanks making bids having a face value ofRs460.172 billion in response to the regulator’stender for auctioning the Market Treasury Bills(MTBs) of 3, 6 and 12-month maturity periods.

The offered amount is more than double

the central bank had targeted to increase in theNov 2nd auction. SBP target for Wednesday’ssale of the MTBs was Rs215.359 billion, includ-ing additionally required Rs359 million, forwhich the primary dealers, mostly the banks,bid Rs460.172 billion. This shows an astronom-ical increase of 114 per cent or Rs245.172 billionwhen compared with the central bank’s target.Of the total bids, the so-called liquidity-starvedbanks offered Rs16.404 billion, Rs165.104 bil-lion and Rs278.664 billion to buy the 3, 6 and12-month maturities. SBP, however, acceptedbids having a face value of Rs293.877 billion atweighted average yield of 11.7806, 11.7903 and11.8470 per cent for the government papers ofthree respective maturities.

The cut-off yield was set at 11.7825, 11.8070and 11.8769 per cent for the three maturity pe-riods. The scheduled banks have long beenunder fire for their – what the State Bankdubbed it in one of its monetary policy decisions– risk-averse behaviour towards the growth-ori-ented private sector in terms of financing. Giventheir perceived tilt towards government-centricpublic sector, the profit-conscious banks are ex-pected to pocket handsome amounts throughheavily investing in the MTBs and Pakistan in-vestment Bonds that, according to SBP’s auc-tion calendars, would be auctioned to the tuneof Rs1.070 billion during Oct-December FY12.This trend puts enough substances behind thereports that the funds-starved government hadcreated a sort of cyclical borrowing networkthrough which it was raising the same liquidityfrom commercial banks that the State Bank wasinjecting into the money market.

Banks bid huge sums for MtBsamid heavy SBP injectionsRice exporters

fear liberalisedtrade with India

LAHOREnnI

ACTiON is being taken against fertilisermanufacturing companies for unilat-eral increase in urea prices. The case isbeing sent to the Competition com-

mission of Pakistan and other concerned govern-ment institutions. This was decided at a high levelmeeting held in lahore with senior central leaderPakistan Muslim league and senior Federal min-ister Chaudhry Pervaiz elahi in the chair. Alsopresent in the meeting were advisor to PrimeMinister Mohammad Basharat Raja and thechairman, managing director and general man-

ager of the National Fertiliser Corporation. Theimpact of urea price escalation was evaluated indetail and it was concluded that the unilateralprice increase by fertiliser manufacturers did nottally with ground realities and that it was a wellplanned move to unduly profit from the situation.The meeting also concluded that fertiliser manu-facturers were acting like a cartel which was detri-mental to the interests of the country’s farmers.The meeting also showed displeasure at the con-flicting prices of similar products being producedby the fertiliser companies. The excuses beingmade by the manufacturers were rejected in themeeting and it was resolved that the governmentwould protect the farmers’ interests at all costs.

action against fertilisercompanies on the cards

reaP former vice Chairman, taufiq ahmed

KARACHIStaff RepoRt

PAKiSTANTelecommunication Colimited (PTCl), the largesttelecom operator, has

underperformed the broader KSe-100 index by 33 per cent during2011YTD, on concerns of its ailingfixed line business segment.“however, we believe, that fixed lineis only one-half of the PTCl coin andinvestors have overlooked the growthstory in PTMl (Ufone), PTCl’s 100per cent owned cellular firm,” saidMohammed Millwala of ToplineSecurities.Therefore, the analyst said, tocapture the complete essence ofUfone’s story, the investors areadvised to look at the company’sconsolidated earnings rather thanstand-alone which is usually

announced at the Karachi bourseafter the PTCl board meeting.The disparity is obvious in thecompany’s recently announced1QFY12 result in which companyposted ePS of merely Rs0.28 onstand-alone basis versusconsolidated ePS of Rs0.44.interestingly the market reactednegatively by hearing theunconsolidated ePS numbers ofRs0.28. in addition, our investment case isalso driven from growth prospects ofits broadband business (subscriberswitnessed CAGR of 85 per cent in last3-years) that has a potential tocushion the decline of fixed line.Overall, we expect company to post adouble-digit increase in consolidatedprofitability of 20 per cent to reachePS of Rs1.98 in FY12e. We have re-initiated our research coverage onPTCl with ‘Buy’ recommendation, as

the stock is also available atattractive dividend yield of 16 percent. investors must only look atconsolidated statistics as Ufone isbecoming a large part of PTCl. Due tothe changing dynamics oftelecommunication industry (fixedline to wireless technology), Ufonehas become the spearhead of PTCl’searnings growth. As per ourestimates, the segment contributedapproximately 47 per cent tocompany’s topline while,approximately 50 per cent of PTCl’1QFY12 consolidated ePS (Rs0.44) isattributed to Ufone. During FY12, webelieve the pendulum would furtherswing towards Ufone, with Ufone’sestimated revenue to surpass that ofits parent company and segmentcontribution to consolidatedbottomline is estimated to standaround 68 per cent. Our conviction in

Ufone potential stems from its stablegrowth in subscriber base coupledwith turnaround in ARPUs (Averagerevenue per users). in addition toUfone, broadband would also be thepotential saviour for PTCl, goingforward. Broadband segment haswitnessed tremendous growth overthe years, with subscribers growing by3-year CAGR of 85 per cent. Thoughthis growth could be attributed to alow base effect; nonetheless lowbroadband density of only 0.8 percent compared to country’s total tele-density of 69 per cent leaves ampleroom for further growth. in 1QFY12PTCl’s DSl, customer base increasedby 9 per cent with a steady marketshare of 95 per cent. Therefore, withavailable growth room, we believebroadband would also shoulder thedeclining fixed line business. Weestimate broadband to contributeapproximately 8 per cent to the

topline of the company in FY12. Thesegment growth prospects also stemsfrom being the major beneficiary ofcompany’s CAPeX programme. in thelast 3-years, PTCl’s capitalexpenditure stood at Rs24bn withmajor expansionary projects likeexpansion of optical fibre network inBalochistan to acquiring VDSl2bonding technology for high speeddata transfer and many more allcoming under the broadbandsegment. For the past 2-years PTClhas announced cash dividend ofRs1.75 per share accompanying 9-month result as against the traditionalapproach of announcing the resultwith that of full year result. Webelieve the deviation is on account ofgovernment’s efforts to limit its fiscaldeficit. Furthermore, in line with thishistory we expect the company wouldannounce a cash dividend of Rs1.75per share in 3QFY12.

PTCL’s consolidated earnings reflect true picture

Urea PriCe Hike

g Case being sent to CCP and concerned government institutions

g india eyes other important regional markets g Pakistan to lose marketsin iran, Central asia if imports allowed g reaP to postpone MfN issue g rice sector to soon evaluate impact of indian imports

KARACHIghuLaM aBBaS

The rice exporters of Pakistan whoare already facing cut throatcompetition in the internationalmarket with cheap non-Basmati

rice of india are upset about theliberalisation of trade with the neighboringcountry as free imports from Delhi willresult into great losses for both ricegrowers and exporters. if Delhi who at this point is willing to openits transit route via Pakistan, decides tolook beyond the Pakistani markets; the ricesector of Pakistan will lose its markets iniran, Afghanistan and other Central Asianstates.Talking to Profit, Taufiq Ahmed Khan,former Vice Chairman of Rice exportersAssociation of Pakistan (ReAP) said thatthe rice exporters were too much confusedover the move of Ministry of Commercewho through a 15 days notice demandedrecommendation over the negative list oftrade being prepared for trade talks withindia. As the sector needs almost a year toevaluate the impacts of imports from indiawhich comparatively has three times highstock and quality of rice; the exporters havedemanded to postpone the enlisting processas they were fearful about the imports fromindia after granting it the ‘Most FavoredNation’ status. “As india is eyeing otherimportant markets of the region wherePakistan enjoys geographical benefits, wecan also face huge losses in terms ofexports to these countries,” he said addingthat the country’s exports have already

become stagnant in the last one month dueto the arrival of cheap indian rice in theinternational market. Besides that, indiaalso has a bumper crop this year withalmost 20 kinds of exportable rice againstthe only two to three kinds of rice beingexported from Pakistan. Sensing theimmediate and negative impacts of theproposed imports from india, the exportershave shown their serious concerns over theopening of rice imports. Talking about theministry’s notice, he said that the exporterswere not able to evaluate the impacts of theimports from india and give their inputswithin 15 days. “We have demanded topostpone the process as the issue is veryserious and sensitive”. According tosources, the competition in theinternational market was intensified whenthe import of non-basmati rice from indiawas started again after lifting a ban.indian government, which had bannedprivate companies from shipping non-basmati rice in April 2008 amid a globalfood crisis, lifted that restriction on Sept 8.exports from the world’s second-largestproducer were a total of 4 million tonnes inthe year. From April 1, indian shipmentswill account for 11 per cent of global tradethis calendar year; overtaking U.S andPakistan to become the third-largestshipper.Though it was estimated that shipmentsfrom Pakistan may exceed 4 million tonneswith the production of 6.5 million tonesand an increase of 38 per cent during 2011-2012, the damages made to rice crop afterthe heavy monsoon rains in Sindh were alsolikely to affect the country’s exports.

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