Saturday, 15 September , 2012 KARACHI STAFF REPORT G OvERNOR State Bank of Pak- istan (SBP) Yaseen Anwar has said that there exists a huge potential in the global remit- tance market for Pakistan. This he stated while addressing an award ceremony held here in recognition of the bankers’ com- mendable services in facilitating home re- mittances by Pakistan Remittance Initiative (PRI) Friday. The leading bank in home remittances award for the year 2011 was conferred upon Habib Bank Limited (HBL). The SBP gover- nor said it was quite satisfactory to note that the banks had started to im- prove their in- frastructure and related systems with a view to offering better remittance services to their customers. Anwar ob- served that the continued impressive growth in worker remittances was the re- sult of the efforts made by SBP and PRI, in collaboration with banks and other stake- holders, to facilitate both overseas Pakista- nis and their families back home. He outlined the steps taken to enhance the flow of remittances through formal chan- nels that he said included: (a) preparation and implementation of national strategy on remittances; (b) playing the advisory role for the financial sector; (c) creating sepa- rate efficient remittance payment high- ways; and (c) becoming a focal point for overseas Pakistanis through round-the- clock call centre with toll free lines. “We cannot afford to be complacent. We can always learn more from other countries’ best practices in facilitating remittance flows including end-to-end efficient systems, max- imum satisfaction of both remitters and ben- eficiaries, highest degree of commitment of the financial sector, and development of new products and services,” he added. He as- sured full SBP and PRI support in facilitating all efforts of the financial sector towards achieving the desired objective of maximiz- ing the flow of remittances through formal channels into the country. “Remittances sent home by overseas Pakistani workers crossed the $13 billion mark for the first time in country’s history during the last fiscal year,” he said. The SBP Governor distributed the awards amongst banks’ officials in differ- ent areas relating to home remittances in- cluding remittances services at branch level both in Pakistan and overseas, processing at centralized Home Remittance Cells and IT support for swift remittance delivery. Some 45 officials from a number of banks also re- ceived individual performance awards for fa- cilitating remittances into Pakistan. Telcos, FBR agree to resolve Rs47 billion tax dispute through table talk MONITORING DESK Five telecom companies and FBR have agreed to resolve Rs. 47 billion tax dispute through out of court settlement, told the FBR head Ali Arshad Hakim during a meeting of the sub-committee of the Na- tional Assembly Standing Committee on Information Technology (IT). This is ex- actly the way the dispute was going to get resolved when FBR was going to give the telcos the waiver on Rs. 47 billion tax on inter-connection charges but NAB had taken the notice of the issue and had re- verted FBR’s draft for waiving the tax. However, it appears that the settlement has been reached now between the telcos, FBR and NAB – since the matter is said to be re- solved with-in a month’s time through the constitution of Alternative Dispute Resolu- tion Committee (ADRC) and no strict measures, including attachment of banks accounts of the telecom companies, would be taken. Telecom companies, which were earlier seeking the exemption of tax through Section 65 of Sales Tax Act, 1990, later on took a stand that tax was not payable at all and that this was some kind of misunderstanding on FBR’s part. EU Parliament approves Autonomous Trade Preferences ISLAMABAD STAFF REPORT The European Parliament approved yes- terday with an overwhelming majority a package granting the EU Autonomous Trade Preferences (ATPs) for Pakistan. The package would allow tariff free export of 75 Pakistani products - mostly textiles - to EU markets until 31 December 2013. The ATPs are expected to become effec- tive around end October 2012 following completion of administrative procedure. The grant of ATPs is in response to Presi- dent Zardari’s appeal for enhanced mar- ket access to the EU, first made during the Pakistan-EU Summit held in Brussels in 2009. Earlier in June 2012, the Euro- pean Parliament approved a new GSP+ scheme. Under the new scheme Pakistan would be able to apply and if all the nec- essary conditions are fulfilled, our export to the EU would receive duty free treat- ment from January 2014. KARACHI STAFF REPORT After having witnessed a decline of 5%MoM in Julu-12, the deposits of the total scheduled banks reverted back to their normal pace as they surged by 2.7%MoM to reach at Rs6.3tr in Aug-12. On cumulative basis, the deposits have registered a growth of 6.8%8MCYTD as compared to 4.7% growth witnessed in the deposits during the same period last year. This has been evident in the latest figure of M2 (Aug-31), in which M2 growth reached at 0.3% during the previous two months of FY13 as compared to nega- tive growth witnessed during Jul-12. On the other hand, the 6M KIBOR averaged at 10.93% during Aug-12, as compared to Jul-12 average of 12.01%, showing a decline of 108bps on monthly aver- age basis. “The reason for such decline in KIBOR rate was due to adjustment in yields on the back of SBP’s decision to cut the DR by 150bps in its last MPS (Aug-12),” said the analysts at InvestCap Research. The credit off-take trend of the banking sector remained sluggish during the review month as it was up by minor 0.3%MoM to reach at Rs3.7tr, while during 8MCY12, the advances of the banking sector increased by 6.3%. The advance to deposit ratio (ADR) of the banking sector has reached 59%, down 138bpsMoM during Aug- 12 and 28bps during 8MCY12. The investment side of the banking sector on the other hand, showed a significant surge of 14.1% during 8MCY12 with an appreciation of 1.3%MoM witnessed during the month of Aug-12. This growth under the investments head was in line with the extraordinary growth of Gov't borrowing, in which Gov't borrowed Rs200bn from commercial bank- ing channels during the last two months of FY13. As ex- pected, total deposits of the banking sector returned back to their norm after showing decline in the last month and remained in an upward trajectory during 8MCY12. “The Gov't's heavy reliance on banking sector for borrowing is expected to keep the banking investments side higher and advances are expected to remain in sideways going forward,” the analysts said. SBP Governor talks up global remittance potential Bank deposits back to normalcy HBL honored as SBP sees huge potential in global remittance market for Pakistan BUT IT’S THE GLOBAL MELTDOWN’S FAULT! Growth in Pakistan’s trade gap due to global economic slowdown: Ameen Fahim KARACHI STAFF REPORT Minister for Commerce Makhdoom Ameen Fahim Friday said increase in the country’s trade deficit to a huge $ 15 bil- lion was because of the international fi- nancial crises. During FY12 Pakistan’s trade deficit swelled beyond $ 15 billion with imports ballooning to over $ 40 bil- lion and exports standing slightly below $ 25 billion. This increase in the country’s trade gap widened Pakistan’s current ac- count deficit to over $ 4 billion during FY2011-12. The federal minister, however, was upbeat that events like Expo Pakistan Ex- hibition 2012 would help the dollar-hun- gry country increase its exports as well as attract the much-needed foreign invest- ment. He was briefing reporters here at Trade Development Authority of Pakistan (TDAP) after chairing a review meeting on the mega exhibition in which, the federal minister said, a large number of buyers from across the globe had assured their participation. Fahim said the event would be organized in line with international standards so Pakistani products could be better introduced to the foreign buyers who usually stay away from the country for their perceived security concerns. Fashion industry, he said, was world over flourish- ing and fashion shows were being held in almost all exhibitions. He said women were the best buyers and in Pakistan con- stitute 50 percent of the population. About problems of the stakeholders, the federal minister said his ministry had directed TDAP to hold a regional conference to ad- dress the same. He said Pakistan’s com- mercial counselors deputed abroad would also be called in to attend the moot. To a query, he said the commercial counselors were given another month to arrive back in Pakistan to attend the Expo event. Lesson in equity investment SECP moves to educate equity investors on fraudulent market risks KARACHI STAFF REPORT The Karachi Stock Exchange (KSE) Friday held its third session of SECP Investor Edu- cation Program for the members of busi- ness community and working professionals from diverse backgrounds. The seminar was attended by a number of Karachi-based investors. Senior officials from KSE, Insti- tute of Capital Markets (ICM) and Pakistan Mercantile Exchange (PMEX) presented their views during the session. CEO Insti- tute of Capital Markets Javed Hassan; Head of Marketing and Business Develop- ment, PMEX, Hassan Mehmood; Chief Strategy Officer, JS Investments, Maleeha Bangash; General Manager KSE Sani-e- Mehmood Khan; along with the KSE offi- cials participated in the session. CEO ICM Javed Hassan elaborated the pros and cons of investing in different financial products. He focused on the broad features of invest- ments opportunities available in the coun- try, Pakistan’s economic and financial system, features and characteristics of dif- ferent financial markets, regulatory frame- work, market indicators, investment products, financial services and roles and responsibilities of various financial institu- tions in the country. He also explained the fact that how diversification across vari- ous investment instruments safeguards the investors’ interest. The investors were also given an insight about the features of insurance, mutual funds, commodities, debt and equity markets. Head of Market- ing and Business Development PMEX Mehmood Hassan also briefed about the role of PMEX in capital markets along with its products and mechanisms. It was also addressed to the participants that in what circumstances and how an investor can lodge complaint with the Exchange / PMEX in case he/she is not satisfied with the services of the broker. Maleeha Ban- gash briefed participants about the oppor- tunities in mutual funds and the role of mutual funds in creating the saving habits in general investors. SECP registers 274 firms in August KARACHI: The Securities and Exchange Commission of Pakistan (SECP) registered 274 companies in August, said the apex regulator Friday. The new incorporations during the month include 257 private, followed by 16 single-member, 2 public un- listed companies, and 2 non-profit associations. Trading sector has the highest new incorporation of 44 companies, followed by services with 28 companies, construction with 21 companies, power generation with 18 companies, information technology with 17 companies and textile with 16 companies. Highest company incorporation was witnessed at Company Registration Office (CRO), Lahore of 89 companies fol- lowed by CROs Karachi and Islamabad registering 76 and 72 companies, respectively. Remaining CROs of Peshawar, Multan, Faisalabad and Quetta registered 14, 12, 8 and 3 companies respectively. Authorized capital and paid up capital of 274 compa- nies, is Rs1.89 billion and Rs482 million respectively. During the month, 56 compa- nies increased their authorized capital with the aggregate authorized capital increment of Rs2.99 billion and 52 companies raised their paid up capital with the total paid up capital increment amounting to Rs3.20 billion. STAFF REPORT 18-Business Pages- 15th September_Layout 1 9/15/2012 5:11 AM Page 1