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Friday, July 11, 2014

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NEWS OF THE DAY

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PLP NEWS ALERTS EMAIL No. 161-2014

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NEWS HEADLINES Top Stories ................................................................................................................................................... 6

Transport, other projects: Prime Minister renews focus on Karachi ............................................................ 6

Revenue-generation efforts: increased share may breed complacency among provinces: SBP ................. 6

Credit to private sector increases by 140 percent ........................................................................................ 7

Services sector posts 4.3 percent growth ..................................................................................................... 9

Policymakers asked to formulate industrial policy ..................................................................................... 10

Budgetary borrowing: government reliance on banking system reduces .................................................. 11

LSM registers growth .................................................................................................................................. 12

Gaza bloodshed spirals as world powers plead for truce ........................................................................... 13

Budget announced: 'Modinomics' falls short of bullish expectations ........................................................ 14

Power bills exceeding Rs 0.6 million: taxmen told to compile list of retailers ........................................... 15

TDAP scam: Amin Faheem granted bail ...................................................................................................... 16

DMG, PSP posts: FPSC recommends induction of 15 Baloch officers......................................................... 16

Najam Sethi: AGP asked to contact Prime Minister ................................................................................... 17

Writ petition filed against Imran ................................................................................................................. 17

Britain to pass emergency data surveillance laws ...................................................................................... 18

Germany kicks out top US intelligence officer in spy row .......................................................................... 18

China, US to boost security ties, but no breakthroughs ............................................................................. 20

Bears dominate KSE .................................................................................................................................... 20

LSE index loses 47.03 points ....................................................................................................................... 21

ISE index down by 1.58 points .................................................................................................................... 22

BRIndex30 dips by 170.97 points ................................................................................................................ 22

Business and Economy: Pakistan ............................................................................................................. 23

Forex reserves up by $647 million .............................................................................................................. 23

Budgetary borrowing: government reliance on banking system reduces .................................................. 23

Credit to private sector increases by 140 percent ...................................................................................... 24

Dar for early resolution of Pak-Russia financial dispute ............................................................................. 26

Chinese firm, ERRA: agree to expedite 205 uplift projects in AJK .............................................................. 27

Government accords priority to socio-economic development of Fata people: President ....................... 28

Uplift projects in Fata: government urged to make policy for donor agencies, NGOs ............................... 29

Services sector posts 4.3 percent growth ................................................................................................... 30

LSM registers growth .................................................................................................................................. 30

LCCI chief asks FBR to help resolve sales tax adjustment issue .................................................................. 31


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Call for Army's deployment in Karachi: businessmen's meeting with Prime Minister ............................... 32

Traffic jam, roadside parking hit trade activities ........................................................................................ 33

Over 3.000 new drugs pending registration: DRAP fails to check drug prices ........................................... 34

Planned merger: Holcim, Lafarge announce list of proposed asset disposals ........................................... 35

KPT restrained from transferring contractor's money to NAB ................................................................... 36

Activities at Karachi and Qasim ports ......................................................................................................... 37

Shipping Intelligence ................................................................................................................................... 38

Transport, other projects: Prime Minister renews focus on Karachi .......................................................... 42

Aircraft acquisition: PIA exempted from application of PPRA rules ........................................................... 42

NHA sneakily raises toll rates by 50 percent, National Assembly body told .............................................. 44

Expediting pending court cases: PAC recommends government to amend relevant laws ........................ 45

PCDMA elections on September 25 ............................................................................................................ 45

Company News: Pakistan ......................................................................................................................... 47

development: Lessons from the Friedrich Naumann Foundation .............................................................. 47

Cotton and Textiles: Pakistan .................................................................................................................. 51

Trading activity picks up pace on falling rates ............................................................................................ 51

Cotton prices continue to decline ............................................................................................................... 52

Punjab-based textile mills: Minister saves one million jobs by revising gas supply schedule, says APTMA chief............................................................................................................................................................. 54

Taxation: Pakistan .................................................................................................................................... 56

Revenue-generation efforts: increased share may breed complacency among provinces: SBP ............... 56

Power bills exceeding Rs 0.6 million: taxmen told to compile list of retailers ........................................... 57

Prime Minister may award Taxpayer Cards to top payers on July 15 ........................................................ 58

FBR launches recovery drive against fashion designers ............................................................................. 58

Taxation: World ......................................................................................................................................... 60

10-year tax holiday for new investors ........................................................................................................ 60

Agriculture and Allied: Pakistan ............................................................................................................. 63

Daily trading report of PMEX ...................................................................................................................... 63

Advisory to maize growers .......................................................................................................................... 63

Up to 80 percent price hike registered in all varieties of fruits .................................................................. 63

Fuel and Energy: Pakistan ....................................................................................................................... 65

BoM of PSO re-constituted ......................................................................................................................... 65

Qatargas LNG price: Ministry urges ECC to form negotiation committee .................................................. 65

Mari Gas MD lauded for investment: government channelling more resources to discover new oil fields: Dar ............................................................................................................................................................... 67


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Loadshedding hours: power ministry fails to bring improvement ............................................................. 67

Blocking Nepra's pro-consumers decision: K-Electric accused of seeking stay order ................................ 68

Increasing power generation ...................................................................................................................... 69

Fuel and Energy: World ............................................................................................................................ 71

Oil slips on slack US demand, improving supply outlook ........................................................................... 71

Oil demand to grow further: Opec ............................................................................................................. 72

Banking & Finance ................................................................................................................................... 73

SBP to announce monetary policy on July 19 ............................................................................................. 73

Workers’ remittances rise by 13.72pc to $15.83bn in FY14 ....................................................................... 73

BR Research: All ....................................................................................................................................... 75

Whats brewing at Mari? ............................................................................................................................. 75

Key takeaways from SBPs third quarter report .......................................................................................... 76

Milk it! ......................................................................................................................................................... 77

Stirring start-ups ......................................................................................................................................... 78

Crime Records ........................................................................................................................................... 80

Law & order: chief minister asked why he keeps changing IGs .................................................................. 80

US drone kills six amid anti-Taliban offensive ............................................................................................ 81

Three Lyari gangsters killed in 2 encounters .............................................................................................. 82

Political worker’s death leads to protests .................................................................................................. 84

Fatalities: Two die in separate incidents ..................................................................................................... 85

Drone strike in North Waziristan not confirmed yet: FO ............................................................................ 85

Gaza violence spirals as UN warns of regional threat ................................................................................. 86

Five FC men martyred in Loralai ................................................................................................................. 89

Pakistani jailed 18 years to life for wife's New York murder ...................................................................... 89

7 security officials dead in separate attacks in Balochistan, K-P ................................................................ 90

Bomb blast near bank in Bannu injures 5 ................................................................................................... 90

Blast outside PPP leader's house in Peshawar ............................................................................................ 91

Miscellaneous News .................................................................................................................................. 92

Unfriendly ties: US turns down Pakistan’s demand for LNG supply ........................................................... 92

FY14: Growth rate was 3.3%, govt admits to IMF ...................................................................................... 93

Economic fortunes: Economy has turned a corner, says central bank ....................................................... 95

2013-14: Remittances clock in at $15.8 billion ........................................................................................... 95

Record high: Mobile phone subscriptions spike up to 140m ..................................................................... 96

Reserves increase 6.2% in a week ............................................................................................................... 97

SHC bars transfer of frozen funds ............................................................................................................... 98


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For a flawless distribution: Zakat fund disbursement handed over to Sindh Bank .................................... 99

EC approves FCCI election schedule ......................................................................................................... 100

Saarc countries: ‘Sensitive list needs to be reviewed’ .............................................................................. 101

OPEN MARKET FOREX RATES .................................................................................................................... 102

INTER BANK RATES .................................................................................................................................... 103

Bullion Rates (Gold Prices) in Pakistan Rupee (PKR) ................................................................................. 104

Gold Rates & Silver Rate from major cities of Pakistan ............................................................................ 105


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Top Stories

Transport, other projects: Prime Minister renews focus on Karachi July 11, 2014

Prime Minister Nawaz Sharif on Thursday announced immediate construction of a Bus Rapid Transit System in Karachi to help ease transport problems in country's largest city. The Prime Minister, who was in Karachi to discuss various development projects, said the Federal government would construct the Metro Bus service on the pattern of that employed in Lahore and Rawalpindi, without any delay. The Prime Minister during a meeting at Governor's House announced Rs 15 billion for the project - to be called Green Line - and said the share of the Sindh and Karachi City government would be fully borne by the federal government. He said the project would be completed in the shortest possible time. He said the government was fully cognisant of the transport problems of Karachi and said the rapid bus system would bring about a revolution in the transportation system for the residents of Karachi. The Prime Minister said he was confident that Karachi would regain its past glory and the title of 'City of Lights'. He also announced allocation of Rs 55 billion for acquisition of land for the Karachi-Lahore motorway. He said the funds had been released to the National Highway Authority and work would start in a few months time. The Prime Minister also announced early completion of Gaddani Power Park and two power projects at Port Qasim.

Copyright Associated Press of Pakistan, 2014

Revenue-generation efforts: increased share may breed complacency among provinces: SBP July 11, 2014

State Bank of Pakistan said on Friday that a substantial increase in the provincial share of federal revenues may discourage provinces to increase their own revenue generation efforts. In its third quarterly report "The State of Pakistan Economy", SBP revealed that after rising substantially in the previous year, the pace of provincial tax collection weakened in Jul-Mar FY14 and the cumulative provincial tax revenues growth fell from 90.1 percent in Jul-Mar FY13 to 24.3 percent in Jul-Mar FY14. In terms of individual provinces, tax receipts by Sindh and the Punjab posted a sharp slowdown


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during this period. However, collections by KPK almost doubled in Jul-Mar FY14, following the establishment of KPK Revenue Authority in August 2013. In SBP's view, the growth in provincial tax revenues is likely to settle down, after witnessing an initial spurt following the devolution of sales tax collection. According to SBP, the improvement in tax administration and widening the tax base, can lead to a significant increase in provincial tax receipts. In this context, a look at the details of taxable services in Sindh and the Punjab, provides some important insights: -- The rate of GST on services is 16 percent, compared to 17 percent in the rest of the country; -- The base of sales tax on services is wider in Sindh (150 services) compared to the Punjab (105 services); -- The scope of telecommunication services is much broader in Sindh, with 65 services in the tax net, compared to 29 in the Punjab; -- Services provided by the financial sector, hotels, restaurants, advertising agencies, professional and consultants, and couriers, are almost fully covered in both these provinces; According to SBP, the tax net can be enhanced by expanding the coverage to untaxed (or under-taxed) services. They could be, travel services, specialised workshops (partially covered in Sindh), cable TV operators, rent a car (taxed in Punjab), designers, auctioneers, prize bond dealers, commission agents, art painters, fumigation services, property and automobile dealers, internet cafes, coaching & training centers, corporate law and tax consultants, building maintenance and service providers, etc. "This analysis suggests there is a significant scope for widening the tax base on services for GST collection at the provincial level. In this regard, it should be noted that under the 7th NFC award, 57.5 percent of total tax revenues are to be transferred to the provinces," the report said. Although this has been complemented by the devolution of spending responsibilities, the substantial increase in the provincial share of federal revenues, in the absence of binding fiscal targets for provincial revenue generation, may discourage them to increase their own revenue generation efforts, it added. SBP has suggested that this anomaly should be taken into account, while finalising the new NFC award with the provinces.

Copyright Business Recorder, 2014

Credit to private sector increases by 140 percent July 11, 2014

After witnessing a low expansion during the last five years, credit to the private sector has posted a healthy growth of some 140 per cent during July-March FY14 compared to the same period of the last fiscal year. The results of the SBP-IBA Consumer Confidence Survey indicate improving


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a consumer and business confidence. The latest survey (May 2014) also suggests that an increasing number of consumers plan to purchase consumer durables in next six months, and they expect the financial conditions to improve in coming months. According to the third quarterly report, "The State of Pakistan Economy" issued by State Bank of Pakistan (SBP) on Thursday credit to the private sector expanded by Rs 335.8 billion during July-March FY14, compared with Rs 139.8 billion during corresponding period last year. Within total credit to the private sector, a healthy growth was largely driven by loans to private businesses, which is an indication of the revival of industrial activities. Credit distribution by types of financing reveals that the growth was visible in all three categories during July-March FY14. However, it must be realised that an overall credit to the private sector in July-March FY13 was understated by the retirement of Rs 76.3 billion in credit to the NBFCs, this contractionary impact was limited during July-March FY14, as net retirement by NBFCs stood at only Rs 7.6 billion. Trade financing witnessed a significant increase during July-March FY14, largely driven by export financing. Both the bumper rice crop of 6.8 million tons and a modest increase in textile exports, also contributed to the increase in trade financing. Moreover, the increased import of petroleum products, for power generation and shortage of CNG in the winter, also added to the volume of import financing. Credit expansion to the sugar sector benefited from a strong growth in production, which came about because of the healthy sugarcane crop. Besides working capital, fixed investment loans were availed by sugar mills investing to generate electricity from bagasse and for capacity enhancement. Large carry-over stocks from the previous season, also added to the credit requirements of the sugar sector. In addition, the capacity expansion and product diversification by suppliers of drinking water and soft drinks, continued to create a credit demand from the beverages sector. The beverages sector has been performing well for the last couple of years due to rising demand. Three Greenfield production plants have also been established and FDI inflows to beverages sector stood at $23.5 million during July-March FY14, compared to an outflow of $7.5 million during the same period last year. Another notable development during July-March FY14, was the significant volume of working capital availed by manufacturing units that produce feed stuff for animals. However, credit expansion was largely concentrated in Q3-FY14, on account of liquidity pressures caused by rising prices of raw material (maize and soybean). TEXTILE SECTOR: In addition, credit to textile sector expanded by Rs 100.0 billion during H1-FY14, compared with Rs 65.2 billion during H1-FY13. Following growth in credit to the textile sector during the first half of the fiscal year it recorded a net retirement of Rs 31.4 billion. Segment-wise data indicates that loans for fixed investments fell as a number of textile firms were retiring credit that had been utilised for alternate energy sources and BMR (balancing, modernisation and replacement) in the recent past.


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FERTILIZER SECTOR: The fertilizer sector continued to retire its fixed investment loans utilised for capacity expansion a few years back. However, quarterly data indicates that there was some improvement in working capital loans during Q3-FY14, especially in the month of March. This was largely due to the pickup in domestic production and a decline in fertilizer off-take during Q3. Furthermore, import payments for phosphoric acid (main raw material in DAP production) led to a nominal increase in trade financing during July-March FY14. ENERGY SECTOR: It accounted for 9.3 per cent of outstanding loans to the private sector as of end Mar 2014, availed fixed investment loans worth Rs 19.2 billion during July-March FY14, in sharp contrast to the net retirement seen during the same period last year. These loans were primarily used to set up small projects and rehabilitation of existing power plants. The modest increase in working capital availed by energy sector, can be traced to liquidity problems facing power companies. MANUFACTURE OF APPLIANCES: Credit to appliance manufacturers witnessed a notable improvement during July-March FY14. A leading manufacturer of electronic products heavily borrowed to shore up its production facilities in the wake of reviving consumer demand, and for product diversification. CONSUMER FINANCING: It recorded a modest increase in September 2012 after a prolonged period of net retirement, continued to gain momentum during July-March FY14. The recovery is primarily driven by personal loans and auto financing, while other categories of consumer financing are yet to show much of an improvement. Bank-wise data indicates that the growth in personal loans can be traced to one public sector commercial bank, which accounted for 89.1 per cent of the increase during July-March FY14. In contrast to personal loans, the increase in auto financing is driven by one private sector bank, which aggressively followed its segmented marketing strategy.


Services sector posts 4.3 percent growth July 11, 2014

Services sector posted a 4.3 percent growth during FY14 as against the target of 4.6 percent. FY14 growth in services is also lower than last year, in which it registered a 4.9 percent growth. According to State Bank's third quarterly report, this relatively weak performance is largely because of finance & insurance and general government services, whereas wholesale & retail trade and transport, storage & communication continued to provide impetus to overall growth in services. A strong growth in LSM, better production of major crops and the increase in trade volumes, largely explain an increased activity in wholesale and retail trade. Furthermore, the strong credit growth to wholesale and retail trading, also bodes well for this sub-sector, the report said. In the transportation sector, PIA struggled with operating losses; the company posted a net loss of Rs 44.5 billion during CY13, as compared to Rs 30.6 billion in CY12.27 However, recent corporate


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results for Q1-CY14 reveal an improvement as the net loss has fallen from Rs 8.62 billion in Q1-CY13 to Rs 1.98 billion in Q1-CY14. A stronger revenue growth could be traced to the acquisition of four narrow body aircraft, as well as stability in the exchange rate. The growth in communication came mainly from value-addition in cellular segment. According to PTA, cellular companies operating in Pakistan earned a revenue of Rs 440.2 billion in FY 2012-13, which is the highest recorded. The auction for licenses for 3G/4G spectrum is likely to boost revenues in this segment of the telecom sector, it added.


Policymakers asked to formulate industrial policy July 11, 2014

While acknowledging the improvement in external grants, loans and foreign investment (like the Eurobonds) the State Bank of Pakistan has asked the policymakers to formulate an industrial policy with a view to prioritising production efficiency and job creation. The third quarterly report for on the State of the Economy FY14, issued on Thursday, states that Pakistan's economy appears to have turned a corner with revival of economic activity with GDP growth of 4.1 percent (highest in five years). Manifestation of this can be seen "in the rise of private sector credit; a contained fiscal deficit, the subdued inflation outlook; the sharp increase in foreign exchange reserves; and the appreciation and stability in exchange rate." However, the report emphases that these signs should not discount the challenges faced by the economy; and efforts for much needed structural reforms should continue. "These positives developments provide a strong platform to move forwards sustained economic growth in the medium term." According to the Report, the recent influx of external resources not only stabilised the exchange rate, but also sharply increased SBP's FX reserves. "As of 30th May 2014, SBP's reserves were US $8.7 billion, compared to only US $3.5 billion as of end-December 2013. While the PKR's appreciation improved business sentiments and its subsequent stability has eased inflationary expectation, the sharp increase in the country's FX reserves provides some comfort for domestic and foreign investment.'' The report says that average inflation during Jul-Mar FY14 was 8.6 percent. Going forward, the stability of PKR, stable international oil prices, and softer global commodity prices should further contain inflationary expectations. On the basis of data released by the Ministry of Finance, the SBP report says that fiscal deficit during the first nine months of FY14 was only 3.2 percent of GDP, which is significantly lower than the average deficit in the last five years. The report, however, points out that despite efforts for fiscal consolidation on the expenditure side, tax mobilisation still remains lackluster, as FBR is still operating on a narrow tax base. While the FBR should take concrete steps to plug tax leakages and increase documentation of all financial transactions, provincial governments (having constitutional right to tax services and


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agricultural income) also need to implement provincial taxes more effectively. On the financing side, the Government mainly relied on domestic sources during Jul-Mar FY14. However, external financing has increased subsequently with the issuance of the Eurobonds, fresh loans from IFIs, and bilateral assistance. Although the resumption of external inflows is important for a resource constrained economy, this will add to Pakistan's external indebtedness. The SBP report highlights that total public debt (external plus domestic) has already crossed the limit of 60 percent of GDP, as set by the Fiscal Responsibility and Debt Limitation Act (2005) for FY13 onward. Hence, any addition to the external debt should at least be matched with an equivalent reduction in the domestic debt outstanding. Pressure in balance of payments also eased as bulky re-payments to IMF subsided after November 2013, and the country experienced an influx of external grants, loans and foreign investment (like the Eurobonds). The government needs focus on: efforts to promote competitiveness, instead of a culture that creates and rewards inefficiencies; restructure loss-making PSEs (especially Gencos and Discos in the power sector; and PIA and Railways in transportation sector) to make them more dynamic and profitable; and create a skilled labour force that meets the current (and potential) needs of the manufacturing sector, the report concludes.


Budgetary borrowing: government reliance on banking system reduces July 11, 2014

The federal government's reliance on the banking system for budgetary support has gradually reduced mainly due to lower fiscal deficit, and availability of non-bank funding. According to SBP's third quarterly report "The State of Pakistan Economy" issued on Thursday, following a prolonged period of excessive government borrowing from the banking system, a visible deceleration was observed during the third quarter of the year and this was because of two factors including lower fiscal deficit and inflows of non-bank funding that helped reduce reliance on the banking system. Besides an overall fall in government borrowing, government efforts to shift its borrowing away from SBP towards commercial banks is also clearly visible during Jul-Mar FY14. During the period, net budgetary borrowing stood at Rs 437 billion comprising Rs 58.8 billion from SBP and Rs 378.1 billion from scheduled banks. The government relied heavily on SBP funding during the first quarter of FY14 as commercial banks were reluctant to invest in government securities. However, during the third quarter, major borrowing was obtained from banks. According to the report, commercial banks offered a huge amount in primary auctions of government securities after change in policy rate, especially of November 2013. This allowed the government to contain its borrowing from SBP. The situation further improved in Q3-FY14, as net government borrowing from SBP saw a


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massive net reduction. It is important to highlight here that net reduction in borrowing from SBP was primarily attributed to an inflow of $1.5 billion into the Pakistan Development Fund (PDF). In fact, these inflows pushed the government deposits with SBP from Rs 96.3 billion at the beginning of the year, to Rs 309.9 billion by end-Q3-FY14.


LSM registers growth July 11, 2014

Large Scale Manufacturing (LSM) recorded a growth of 4.3 percent during Jul-Mar FY14, compared to 3.5 percent during the corresponding period of last year. According to State Bank's third quarterly report issued on Thursday, this higher growth was largely concentrated in sugar and fertilizer and quarterly data reveals a sharp decline in YoY growth of LSM during Q3-FY14. However, despite the subdued performance during Q3-FY14, overall LSM growth during Jul-Mar FY14 was still higher than the previous year. In fact, some of the industries (eg, urea, leather products, soft drinks, and petroleum products) continued to show a strong growth throughout the year. According to report, some slowdown in LSM growth was expected due to the high base effect from September 2013, other factors also dampened LSM growth in Q3-FY14. First, sugarcane crushing was concentrated in Q2-FY14, which meant a lower production was realised in the third quarter. This trend stands in sharp contrast to last year, when most of the crushing was carried out in Q3-FY13. Second, the drag on Q3 growth came from the textile sector, especially cotton yarn. This moderation in growth was unexpected as it primarily came from a reversal in China's cotton policy. Finally, the poor performance of Pakistan Steel Mill also pulled down LSM growth. Specifically, the production of coke and pig iron came to a halt in Q3-FY14, which at the margin had a significant impact on overall LSM growth during Q3-FY14. In addition, the rise in power tariffs for industrial users in September 2013, increased the production costs for almost all industries. Moreover, the imposition of Gas Infrastructure Development Cess (GIDC) in January 2014 increased the cost for gas-dependent industries such as textiles, fertilizer, cement and paper. Furthermore, industries which are heavily dependent on imported raw materials like POL, faced rising costs following the sharp depreciation of the PKR against major currencies during Q1-FY14. Similarly, a steady increase in the price of palm oil in the international market adversely impacted the cooking oil and ghee production, the report said.



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Gaza bloodshed spirals as world powers plead for truce July 11, 2014

Israeli warplanes kept up their deadly raids on Gaza Thursday but failed to prevent Palestinian militants from firing rockets across the border, despite mounting international appeals for a truce. As the violence escalated, with over 30 Palestinians killed on Thursday alone, UN chief Ban Ki-moon appealed for an immediate cease-fire at an emergency meeting of the Security Council. "It is now more urgent than ever to try to find common ground for a return to calm and a ceasefire understanding," he said as the Organisation of Islamic Conference lobbied the UN to condemn Israel. Russian President Vladimir Putin issued a similar plea in a phone call to Israeli Prime Minister Benjamin Netanyahu, urging an immediate end to the bloodshed and expressing concern over civilian casualties. And US Secretary of State John Kerry warned the region was facing a "dangerous moment" after speaking to both Netanyahu and Palestinian president Mahmud Abbas. French President Francois Hollande called on both sides to exercise "restraint" and "appeasement". But Israel appeared bent on dealing a fatal blow to the Islamist movement Hamas which controls Gaza, with Netanyahu reportedly saying talk of a cease-fire was "not even on the agenda". Hamas also appeared to have no interest in letting up, striking deep inside Israel over the past 48 hours, with rockets crashing down near Jerusalem and Tel Aviv and even as far away as Hadera, 116 kilometres (72 miles) to the north. Sirens wailed across Jerusalem for the second time running and a series of loud explosions echoed across the city as the Iron Dome anti-missile system shot down two rockets fired from Gaza, the army said. Another two crashed down in open areas in the occupied West Bank, one hitting near the Maaleh Adumim settlement and the other landing near Ofer, an Israeli military prison just west of Ramallah, witnesses and security officials told AFP. Hamas militants from Ezzedine al-Qassam said they fired "four M75 rockets at Jerusalem". - Empty streets Since the start of the campaign in the early hours of Tuesday, 83 Palestinians have been killed and more than 500 injured, Gaza medics said. As the number of victims in Gaza rose, Egypt opened the Rafah border crossing, with hospitals in north Sinai placed on standby to receive the wounded, the Egyptian state news agency MENA said. There have been no Israeli deaths, although medics said one woman died on Thursday, a day after falling while running for cover. "We are still facing a difficult, complex and complicated campaign," Netanyahu said after a security cabinet meeting. The violence has emptied the streets from Gaza City to Tel Aviv, as both Israelis and Palestinians take shelter indoors for fear of being caught in the open when the next rocket or missile hits. On the beachfront in Tel Aviv, cafes which would normally have been bursting at the seams at the height of tourist season sat empty, their waiters nervously checking the phones for any news of incoming missiles. But in Gaza, the story was much darker after an Israeli missile slammed into a coffee shop in Khan Yunis, killing nine football fans as they watched a World Cup semi-final match on Wednesday night.


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And Israel has confirmed preparations are under way for a possible ground attack, with tanks seen massing along the border and Netanyahu facing mounting pressure from coalition hard-liners to put boots back on the ground in the territory from which Israeli troops and settlers withdrew in 2005.

Copyright Agence France-Presse, 2014

Budget announced: 'Modinomics' falls short of bullish expectations July 11, 2014

Indian Prime Minister Narendra Modi's new government on Thursday unveiled a first budget that seeks to revive growth and curb borrowing, but left open questions on how it will reduce the fiscal deficit and restore investor confidence. Expectations had been high that Modi would utilise India's strongest election mandate in 30 years to take radical steps comparable to the 1991 market reforms that unleashed an era of high economic growth. In a bid to halt a two-year spell of weak growth, the government announced steps to boost capital spending in Asia's third-largest economy and reassure foreign investors that they will get fair treatment. Yet Finance Minister Arun Jaitley stopped short of halting retroactive tax claims against foreign investors. Britain's Vodafone vowed in response to continue its fight against a years-old $2.2 billion charge. "We shall leave no stone unturned in creating a vibrant and strong India," Jaitley said, vowing to raise the pace of economic growth to 7-8 percent in three to four years from less than 5 percent now. Jaitley, 61, told lawmakers he would uphold the fiscal deficit target for this year inherited from the last government - 4.1 percent of gross domestic product - but admitted that this would be a challenge. "The intent appears to be there, but the measures have not been really thought through," Atsi Sheth, Moody's sovereign credit analyst for India, told Reuters. Jaitley announced an 8 percent rise in spending, roughly unchanged after taking inflation into account. The government will also seek to raise a record $10.5 billion from asset sales - four times what the previous government collected from privatisation moves in the fiscal year ended in March 2014. Among the asset sales would be some holdings in state-run banks, Jaitley said, but he added the government would continue to hold majority ownership of the lenders. In his two-and-a-quarter hour address, Jaitley raised the minimum income level at which people start paying tax and hiked levies on cigarettes and soft drinks. INVESTOR FRIENDLY? Jaitley announced he would raise ceilings on foreign investment in the defence and insurance sectors and loosen rules for foreign e-commerce retailers and real estate investors, but still bar non-residents from taking majority control in projects to supply the world's largest arms buyer. Limits on foreign investment in defence and insurance ventures will go up to 49 percent from 26 percent - less than sought by defence contractors to justify sharing technology when they locate


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operations in India. In another signature initiative, the government will launch a sales tax reform this year to unify India's federal states into a common market, a measure that would boost revenue while making it easier to do business. Investors had piled into Indian stocks on hopes that Modi's leadership and mandate would break a logjam thwarting a host of reforms during the 10-year tenure of his predecessor, Manmohan Singh, whose coalition government became increasingly divided. However, the concrete measures announced by Jaitley fell short of bullish expectations and Indian stocks, bonds and the currency gave back gains late in the day as doubts about the budget arithmetic emerged. Andrew Colquhoun, head of the Asia-Pacific Sovereigns Group at Fitch Ratings, said he was "currently unsure how this (fiscal deficit) can be met without further revenue-strengthening or expenditure-saving measures". Both Moody's and Fitch rate India in the bottom rung of investment grade. 'BITTER MEDICINE' Modi, 63, won election in May with a pledge to create jobs for the 1 million people who enter India's workforce every month. Since taking office, he has warned that Indians should expect "bitter medicine". Reflecting that change in tone, Jaitley vowed to adhere to this year's "daunting" 4.1 percent budget deficit set by the previous government and cut it to 3.6 percent of GDP in each of the two following years. He managed to find room in the budget to fund projects to upgrade India's food distribution infrastructure. He raised subsidies on fertilisers and, against expectations of a cut, extended diesel subsidies - key measures to aid farmers who face poor monsoon rains this year. The minister said he would set up a high-level committee to review retrospective tax claims blamed for choking foreign investment after firms led by Vodafone were hit with massive demands. Jaitley sought to reassure investors by promising a stable tax regime and saying the government would not "ordinarily" create new liabilities retrospectively, but stopped short of moving to scrap the law. Several cases in the court will be concluded through the legal process, he said.


Power bills exceeding Rs 0.6 million: taxmen told to compile list of retailers July 11, 2014

The Federal Board of Revenue (FBR) has directed its field formation to compile a list of retailers having cumulative electricity bill exceeding Rs 0.6 million for sales tax registration; it is learnt Thursday. Sources said most of the retailers have remained beyond sales tax regime so far. Therefore, to bring retail sector into tax net, the board has ordered its field formation to compile a list of retailers having cumulative electricity bill exceeding Rs 0.6 million for sales tax registration. For this purpose, a two-tier regime for sales tax has also been introduced through a new sub-


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section (9) in section 3, which replaced chapter II of the Sales Tax Special Procedure Rules, 2007. According to this latest development, first tier comprises of retailers who are part of national or international chains, or are located in air-conditioned shopping malls, or have credit or debit card machines, or have cumulative electricity bill exceeding Rs 0.6 million for the past 12 months. These retailers shall be registered and pay sales tax under normal regime at standard rate of sales tax. Sources said that an incentive scheme will also be announced to encourage customers to demand proper receipts from such retailers and added that exemption threshold for retail sector has now been omitted from Table II of the Sixth Schedule. Moreover, sources said that retailers, falling in the second tier, shall pay sales tax through their electricity bills - 5 per cent on monthly electricity bill up to Rs 20 thousand and 7.5 per cent on monthly electricity bill above Rs 20 thousand. Replying to a question, sources said that field formation after finalising first tier retailers' list is also required to ensure their sales tax registration and regular tax collection from them under normal tax regime. Furthermore, sources said the field formation in order to avoid revenue leakage in second tier of retailers was establishing co-ordination with electricity distribution companies in their respective jurisdictions to enable charging of sales tax through electricity bills at prescribed rates.


TDAP scam: Amin Faheem granted bail July 11, 2014

An anti-corruption court in Karachi on Thursday granted bail to Pakistan People's Party (PPP) member Makhdoom Amin Faheem in a corruption scandal relating to irregularities in the Trade Development Authority of Pakistan (TDAP). Amin Faheem appeared in yesterday's hearing of the case where former prime minister Yousuf Raza Gilani, Opposition leader in National Assembly Khursheed Shah and a large number of party workers also turned up to express solidarity with him. Amin Faheem was summoned to the chamber of the anti-corruption court's judge Muhammad Aleem. The court granted him bail on submission of surety bonds worth Rs 200,000 each for 12 cases and adjourned the hearing till August 5. The court also accepted Yousuf Raza Gilani's application for exemption of his appearance in the next hearing.

Copyright News Network International, 2014

DMG, PSP posts: FPSC recommends induction of 15 Baloch officers July 11, 2014


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The Federal Public Services Commission on Thursday recommended the induction of 15 officers of Armed Forces belonging to recognised local tribes of Balochistan against vacancies of DMG and PSP. The Commission made these recommendations on the directions of Prime Minister Muhammad Nawaz Sharif. The Prime Minister approved the selection of these officers stating that induction of Baloch officers in DMG and PSP would help the people of Balochistan administer their affairs through trained young indigenous lot.


Najam Sethi: AGP asked to contact Prime Minister July 11, 2014

KHUDAYAR MOHLA

The Supreme Court on Thursday asked Attorney General for Pakistan (AGP) to contact Prime Minister Mian Muhammad Nawaz Sharif with a view to ascertaining grounds under which Najam Sethi's name could be withdrawn from governing board of the Pakistan Cricket Board (PCB). A two-member bench of Justice Anwar Zaheer Jamali and Justice Saqib Nisar resumed the hearing of a case regarding the appointment of the PCB chairman. Appearing before the bench, the AGP apprised the court that the Prime Minister has approved new constitution of the PCB; he also submitted a copy of the notification to the court in this regard. The AGP said that the PCB management committee has been barred from working and Justice Jamshed Ali Shah (Retd) was appointed its interim chairman and election commissioner to hold election of the body within 30 days. Imtiaz Siddique, the counsel for Zaka Ashraf, raised an objection over the induction of Najam Sethi in the governing board of the PCB and apprehended that being a governing board member Sethi will influence the selection of those players who were involved in match-fixing affairs. The court postponed the hearing of the matter for a while, directing the AGP to contact the Prime Minister regarding the withdrawal of Najam Sethi's name from governing board; however, the AGP sought time to apprise the court in the current matter saying that Prime Minister was busy at a meeting in Karachi and was not accessible. The hearing of case was adjourned till July 11 (today).


Writ petition filed against Imran July 11, 2014

WAQAR LILLAH


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A writ petition was filed in the Islamabad High Court (IHC) on Thursday against Pakistan Tehreek-e-Insaf (PTI) chairman Imran Khan for allegedly defaming and ridiculing judiciary during a PTI's rally at Bahawalpur on June 27. The petition was filed by Muhammad Arbab Alam Abbassi. He sought the disqualification of Imran Khan under clause (g) of sub-article (1) of article 63 of the constitution. The petitioner made the PTI through its president chairman PTI Imran Khan, Pakistan Electronic Media Regulatory Authority (Pemra) through its chairman and others respondents in his petition.


Britain to pass emergency data surveillance laws July 11, 2014

Britain is rushing through emergency laws to ensure the police and security services can keep accessing people's Internet and mobile phone data, Prime Minister David Cameron announced Thursday. Cameron said the move, being debated by parliament next week, was vital to protect Britain's security, with 95 percent of all serious organised crime cases using data from Internet and mobile phone traffic. "The ability to access information about communications and intercept the communications of dangerous individuals is essential to fight the threat from criminals and terrorists targeting the UK," he said. A European Court of Justice (ECJ) ruling in April found that an EU data retention directive, implemented in Britain in 2009, was invalid because it interferes with the right to respect for private life. The directive was introduced in 2006 following huge attacks in Madrid and London and forced mobile phone companies and Internet service providers to keep data for at least six months. Downing Street said that following the ECJ ruling, providers could start deleting communications data unless the government adopted fresh legislation. "Unless we act now, companies will no longer retain the data about who contacted who, where and when," Cameron said, "and we will no longer be able to use this information to bring criminals to justice and keep our country safe." But critics accused ministers of rushing through intrusive legislation which could infringe privacy rights.


Germany kicks out top US intelligence officer in spy row July 11, 2014


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Germany on Thursday expelled the CIA station chief in Berlin in an escalating row over alleged spying by the US that has opened the worst diplomatic rift in years between the Western allies. The expulsion comes after two suspected US spy cases were uncovered in less than a week in Germany, where anger still simmers over the NSA surveillance scandal sparked by revelations from fugitive intelligence contractor Edward Snowden. "The representative of the US intelligence services at the embassy of the United States of America has been told to leave Germany," German government spokesman Steffen Seibert said. The step was highly unusual among Nato allies and underlined Berlin's anger. The official request to leave was based on two probes by German prosecutors of suspected US spying "as well as outstanding questions over the last several months about the activities of the US secret services in Germany," said Seibert. "The government takes these developments very seriously," he added amid the worst Berlin-Washington falling-out since the 2003 US invasion of Iraq. News site Spiegel Online called the move a "diplomatic earthquake". It pointed out that such measures were usually reserved for "pariah states" such as North Korea.



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China, US to boost security ties, but no breakthroughs July 11, 2014

China and the United States agreed on Thursday to boost military ties and counter-terrorism co-operation during high-level annual talks in Beijing, but there was little immediate sign of progress on thorny cyber-security or maritime issues. The two-day talks, led by Secretary of State John Kerry and Treasury Secretary Jack Lew for the United States and Vice Premier Wang Yang and top diplomat Yang Jiechi for China, were never expected to achieve great breakthroughs. The Strategic and Economic Dialogue, now in its fifth year, is more about managing an increasingly complex and at times testy relationship. After discussions on topics ranging from the value of China's currency to North Korea, Yang said the two sides agreed to strengthen co-operation in counter-terrorism, law enforcement and military-to-military relations. He gave few details. On two of the most sensitive issues - maritime disputes and cyber-spying - Yang largely restated Beijing's position on both. "The Chinese side will continue to steadfastly protect its territorial and maritime rights" in the South and East China Seas, Yang told reporters as the talks wrapped up. "China urged the US side to adopt an objective and impartial stance and abide by its promise to not take sides and play a constructive role in safeguarding regional peace and stability."

Copyright Reuters, 2014

Bears dominate KSE July 11, 2014

A dull trend pervaded Karachi Stock Exchange Thursday and the benchmark KSE-100 index shed 124.17 points to close at 29,353.12 points. Although, overall activity remained lacklustre, however some improvement was witnessed in terms of volumes as it surged by 72 percent to 66.73 million shares. Ahsan Mehanti, an analyst at Arif Habib Securities, said that stocks closed lower amid institutional profit-taking in scrips across the board as investors remained cautious ahead of earnings announcements. Political uncertainty, postponement of SBP policy announcement to July 19, gas tariff hike and GIDC levies for industrial sectors, slump in global stocks and commodities and limited foreign interest played a catalytic role in the bearish activity, he added. Reports on privatisation of OGDC issue over par, SBP announcement on reduction of Export Refinance Rate positively impacted the sentiment at KSE, Ahsan maintained. During the intra-day trading, the index reached 29,484.15 points highest and 29,298.67 points lowest level. Despite a negative trend, volume at the ready counter showed some recovery and surged to


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66.731 million shares compared to 38.66 million shares in previous session. Market capitalisation decreased by Rs 27 billion to Rs 6.910 trillion against Rs 6.937 trillion Wednesday. Samar Iqbal, AVP at Topline Securities, said the index shed 0.42 percent to close at 29,353. Volume rose to 67 million shares and the value also increased to Rs 2.8 billion. After T-Bill auction, most investors are expecting no change in the upcoming policy rate. Index heavyweight PSO, LUCK and UBL affected the benchmark index, she added. Trading took place in 309 companies, of which 78 closed in green zone, 207 in red while 24 landed in blue zone. All top 10 volume leaders recorded a negative trend. Despite being the volume leader with 7.4 million shares, K-Electric lost Re 0.17 to close at Rs 8. Lafarge Pak upheld second position and decreased by Re 0.2 to close at Rs 15.88 on 5.3 million shares. Summit Bank (Con) B remained unchanged to close at Rs 10 on 3.5 million shares. Fauji Cement declined by Re 0.07 to close at Rs 19.47on 3.02 million shares. B.O.Punjab with 2.9 million shares, closed at Rs 8.75, down Re 0.1. Bank Al-Falah lost Re 0.03 to close at Rs 28.04 on 2.8 million shares. NIB Bank Limited dropped Re 0.05 to close at Rs 2.17 on 2.8 million shares. P.T.C.L fell by Re 0.06 to close at Rs 26.05 on 2.53 million shares. With a trading volume of 2.51 million shares, Jah. Sidd. Co closed at Rs 10.07, down Re 0.39. Pak Elektron Ltd plunged by Re 0.17 to close at Rs 26.48 on 1.72 million shares. Island Textile and Sanofi Aventis were the top gainers with Rs 42.99 and Rs 35.60 to close at Rs 902.99 and Rs 851.00 respectively. Bata (Pak) and National Foods were the worst losers with Rs 74.00 and Rs 22.90 to close at Rs 3,200.00 and Rs 738.00 respectively. Syed Faran Rizvi, an analyst at JS Global, said bears dominated the market. Investors continued to remain on the sidelines due to lack of triggers and delay in Monetary Policy Statement announcement, he said. "We expect the market to remain rangebound until the commencement of the corporate results season," Rizvi added.


LSE index loses 47.03 points July 11, 2014

Bearish sentiments continued for another day on the Lahore Stock Exchange on Thursday and the equities registered losses amid sluggish trading trend. The LSE-25 index lost 47.03 points to close at 5488.66 against 5535.69 of Wednesday, while transaction volume was squeezed to 496,500 shares compared with day earlier volume of 1.041 million shares. The market was opened on a depressed note and stayed in red zone during the entire day's trading. The investors preferred offloading to avert more losses that resulted in selling pressure in Hascol Petroleum, Byco Petroleum, Gul Ahmed Textile Mills, DG Khan Cement, Lafarge Pakistan Cement, Hub Power, Kot Addu Power, Japan Power, K-Electric, Bank Al-Habib, Faysal Bank, Bank of Punjab, Engro Fertilizer and PICIC Growth Fund. Only two companies; Netsol Technologies and Pakistan Reinsurance resisted pressure with fractional gains.


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The losers were more than the gainers, as out of a total of 75 active issues, 2 companies posted gains, 21 suffered losses while 52 companies remained unchanged at their previous closing. In positive column, Hascol Petroleum and Pakistan Reinsurance registered marginal gain of 4-paisa and 3-paisa, respectively. In the minus column, Hascol Petroleum lost Rs 3.55, Gul Ahmed Textile was declined by Rs 1.08 while DG Khan Cement and Hub Power were down by 63-paisa and 35-paisa, respectively. Bank of Punjab with trading of 131,000 shares topped the volume leaders followed by NIB Bank with 108,000 shares.


ISE index down by 1.58 points July 11, 2014

Bears retuned in the driving seat at the Islamabad Stock Exchange (ISE) on Thursday where losers outclassed gainers amid decrease in index. ISE Ten Index showed a decrease of 1.58 points as the ISE Ten Index moved from 4,554.88 to 4,553.30 points. The overall turnover amounted to 5,000 shares as compared to previous volume of 10,500 shares. Total 124 companies participated in buying and selling activity. Majority of stocks (94) closed in negative territory, 30 closed in positive territory, whereas no company remained pegged to its overnight levels. The volume of Bank of Punjab was 5,000 shares.


BRIndex30 dips by 170.97 points July 11, 2014

On Thursday, BRIndex30 opened at 16,671.15. It touched an intraday high of 16,672.00 and an intraday low of 16,487.09 and closed at 16,500.18, which was -170.97 points or -1.03 percent lower than previous close. Total volume was 42,966,600, which was 64.39 percent of KSE All share volume and 92.96 percent of KSE 100 volume. The KSE All Share volume was 66,731,820 and KSE 100 volume was 46,218,620. BR Commercial Banks Index closed at 6,881.74 with a net negative change of -64.35 points or a percentage change of -0.93 and a total turnover of 15,543,900. BR Cement Index closed at 3,219.68 with a net negative change of -23.77 points or a percentage change of -0.73 and a total turnover of 11,400,500. BR Oil and Gas Index closed at 4,103.44 with a net negative change of -5.5 points or a percentage change of -0.13 and a total turnover of 3,455,150. BR Tech & Comm Index closed at 905.98 with a net negative change of -3.13 points or a percentage change of -0.34 and a total turnover of 4,569,500. BR Power Generation and Distribution Index closed at 4,537.89 with a net negative change of -44.5 points or a percentage change of -0.97 and a total turnover of 8,668,000. Copyright Business Recorder, 2014


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Business and Economy: Pakistan

Forex reserves up by $647 million July 11, 2014

The country's total liquid foreign exchange reserves rose by $647.6 million during last week. According to State Bank of Pakistan's weekly forex report issued on Thursday, the country's forex reserves reached $14.638 billion as on July 4, 2014 compared to $13.99 billion as on June 27, 2014. During the period under review, the SBP's liquid forex reserves increased by $569 million to $9.602 billion compared to $9.033 billion in previous week. The increase in SBP reserves has been mainly attributed to receipts of $556 million inflows from the International Monetary Fund under IMF's Extended Fund Facility. During the period on account of external debt servicing and other official payments, SBP has made payments of $78 million from its reserves. Similarly, reserves held by banks posted an increase of $78.5 million to $5.0354 billion as on June 4, 2014 up from $4.957 billion a week earlier.


Budgetary borrowing: government reliance on banking system reduces July 11, 2014

The federal government''''s reliance on the banking system for budgetary support has gradually reduced mainly due to lower fiscal deficit, and availability of non-bank funding. According to SBP''''s third quarterly report "The State of Pakistan Economy" issued on Thursday, following a prolonged period of excessive government borrowing from the banking system, a visible deceleration was observed during the third quarter of the year and this was because of two factors including lower fiscal deficit and inflows of non-bank funding that helped reduce reliance on the banking system. Besides an overall fall in government borrowing, government efforts to shift its borrowing away from SBP towards commercial banks is also clearly visible during Jul-Mar FY14. During the period, net budgetary borrowing stood at Rs 437 billion comprising Rs 58.8 billion from SBP and Rs 378.1 billion from scheduled banks. The government relied heavily on SBP funding during the first quarter of FY14 as commercial banks were reluctant to invest in government securities. However, during the third quarter, major borrowing was obtained from banks. According to the report, commercial banks offered a huge amount in primary auctions of government securities after change in policy rate, especially of November 2013. This allowed the government to contain its borrowing from SBP.


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The situation further improved in Q3-FY14, as net government borrowing from SBP saw a massive net reduction. It is important to highlight here that net reduction in borrowing from SBP was primarily attributed to an inflow of $1.5 billion into the Pakistan Development Fund (PDF). In fact, these inflows pushed the government deposits with SBP from Rs 96.3 billion at the beginning of the year, to Rs 309.9 billion by end-Q3-FY14.


Credit to private sector increases by 140 percent July 11, 2014

After witnessing a low expansion during the last five years, credit to the private sector has posted a healthy growth of some 140 per cent during July-March FY14 compared to the same period of the last fiscal year. The results of the SBP-IBA Consumer Confidence Survey indicate improving a consumer and business confidence. The latest survey (May 2014) also suggests that an increasing number of consumers plan to purchase consumer durables in next six months, and they expect the financial conditions to improve in coming months. According to the third quarterly report, "The State of Pakistan Economy" issued by State Bank of Pakistan (SBP) on Thursday credit to the private sector expanded by Rs 335.8 billion during July-March FY14, compared with Rs 139.8 billion during corresponding period last year. Within total credit to the private sector, a healthy growth was largely driven by loans to private businesses, which is an indication of the revival of industrial activities. Credit distribution by types of financing reveals that the growth was visible in all three categories during July-March FY14. However, it must be realised that an overall credit to the private sector in July-March FY13 was understated by the retirement of Rs 76.3 billion in credit to the NBFCs, this contractionary impact was limited during July-March FY14, as net retirement by NBFCs stood at only Rs 7.6 billion. Trade financing witnessed a significant increase during July-March FY14, largely driven by export financing. Both the bumper rice crop of 6.8 million tons and a modest increase in textile exports, also contributed to the increase in trade financing. Moreover, the increased import of petroleum products, for power generation and shortage of CNG in the winter, also added to the volume of import financing. Credit expansion to the sugar sector benefited from a strong growth in production, which came about because of the healthy sugarcane crop. Besides working capital, fixed investment loans were availed by sugar mills investing to generate electricity from bagasse and for capacity enhancement. Large carry-over stocks from the previous season, also added to the credit requirements of the sugar sector. In addition, the capacity expansion and product diversification by suppliers of drinking water and


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soft drinks, continued to create a credit demand from the beverages sector. The beverages sector has been performing well for the last couple of years due to rising demand. Three Greenfield production plants have also been established and FDI inflows to beverages sector stood at $23.5 million during July-March FY14, compared to an outflow of $7.5 million during the same period last year. Another notable development during July-March FY14, was the significant volume of working capital availed by manufacturing units that produce feed stuff for animals. However, credit expansion was largely concentrated in Q3-FY14, on account of liquidity pressures caused by rising prices of raw material (maize and soybean). TEXTILE SECTOR: In addition, credit to textile sector expanded by Rs 100.0 billion during H1-FY14, compared with Rs 65.2 billion during H1-FY13. Following growth in credit to the textile sector during the first half of the fiscal year it recorded a net retirement of Rs 31.4 billion. Segment-wise data indicates that loans for fixed investments fell as a number of textile firms were retiring credit that had been utilised for alternate energy sources and BMR (balancing, modernisation and replacement) in the recent past. FERTILIZER SECTOR: The fertilizer sector continued to retire its fixed investment loans utilised for capacity expansion a few years back. However, quarterly data indicates that there was some improvement in working capital loans during Q3-FY14, especially in the month of March. This was largely due to the pickup in domestic production and a decline in fertilizer off-take during Q3. Furthermore, import payments for phosphoric acid (main raw material in DAP production) led to a nominal increase in trade financing during July-March FY14. ENERGY SECTOR: It accounted for 9.3 per cent of outstanding loans to the private sector as of end Mar 2014, availed fixed investment loans worth Rs 19.2 billion during July-March FY14, in sharp contrast to the net retirement seen during the same period last year. These loans were primarily used to set up small projects and rehabilitation of existing power plants. The modest increase in working capital availed by energy sector, can be traced to liquidity problems facing power companies. MANUFACTURE OF APPLIANCES: Credit to appliance manufacturers witnessed a notable improvement during July-March FY14. A leading manufacturer of electronic products heavily borrowed to shore up its production facilities in the wake of reviving consumer demand, and for product diversification. CONSUMER FINANCING: It recorded a modest increase in September 2012 after a prolonged period of net retirement, continued to gain momentum during July-March FY14. The recovery is primarily driven by personal loans and auto financing, while other categories of consumer financing are yet to show much of an improvement. Bank-wise data indicates that the growth in personal loans can be traced to one public sector commercial bank, which accounted for 89.1 per cent of the increase during July-March FY14. In contrast to personal loans, the increase in auto financing is driven by one private sector bank, which aggressively followed its segmented marketing strategy.


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Dar for early resolution of Pak-Russia financial dispute July 11, 2014

Federal Minister for Finance Senator Mohammad Ishaq Dar on Thursday urged for early resolution of outstanding financial disputes between Russian government and Pakistan businessmen to help bring capital and investment into Pakistan. "There is lot of potential in trade between the two countries but unfortunately due to this impasse we could not benefit to our true potential," Dar said while chairing the meeting of the committee formed by the Prime Minister to resolve the longstanding trade issues between Pakistan and Russia. He said that the solution will be win-win situation for both the Russian government and Pakistani businessmen and emphasised that any arrangement agreed by both the parties should be implemented with full commitment to wind up of litigations and restore normal trade relations. Earlier, Chairman Board of Investment, Mifttah Ismail informed the Committee that the Pakistani businessmen, who are party to the litigation in the courts with the Russian government, have agreed to dispute resolution and the proposals in this regard will be communicated to the Russian side for moving forward. He informed that negotiations with the Pakistani businessmen are in a clear shape to be forwarded to the Russian side. On the occasion, Minister for Commerce, Khurram Dastagir Khan said that the dispute is an impediment to enhancing co-operation between the two sides in energy and infrastructure development sectors. He said that his ministry was facilitating the business community and willing to work for their interests. Yaqoob Tabani of M/s Tabani Corporation and Rauf Alam of M/w Fateh Group of Industries Ltd, who are party to the dispute, expressed their confidence in the government efforts. They said that credit goes to the Finance Minister and other members of committee that efforts are being made to resolve an issue which has hindered the trade relations of the two countries for the last 17 years. Among others, Dr Waqar Masood, Finance Secretary, Shahzad Arbab, Commerce Secretary, Rana Assad Amin, Advisor to Finance Ministry and senior officials of the Ministry of Finance also attended the meeting.



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Chinese firm, ERRA: agree to expedite 205 uplift projects in AJK July 11, 2014

ABDUL RASHEED AZAD

Earthquake reconstruction, rehabilitation authority (ERRA) and Chinese Construction Company agreed to gear up the work to complete 205 City Development Projects worth Rs 34 billion in Muzaffarabad, Bagh and Rawalakot, Azad Jammu and Kashmir (AJK). This was decided during a meeting of Chinese five-member delegation led by Chief Engineer Chen Xianming with Deputy Chairman ERRA Major General Mohammad Azeem Asif here on Thursday. Both the sides agreed that city development projects worth Rs 34 billion would be completed in major earthquake-hit cities including Muzaffarabad, Bagh and Rawlakot. Both sides discussed Chinese loan projects underway in three cities of AJK in detail. ERRA Deputy Chairman highlighted various impediments including delay in various ongoing under construction projects. It is pertinent to note that Chinese loan will be closed by December 31, 2015. During the interaction, Deputy Chairman ERRA said that out of 205, so far 16 projects costing Rs 5 billion have been completed. On the occasion, City Development project DG Zafar Wahla said that 24 projects of water supply schemes, sewerage system, city government buildings, schools and community centers are near completion. The Chief Engineer of the Chinese company Chen Xianming highlighted that all ongoing projects require additional manpower, extra attention, technical support, ample supervision and facilitation on the part of ERRA, NESPAK and contractors. He also implored early release of counterpart funding to push ongoing projects construction. Deputy Chairman ERRA assured Chinese delegation for timely payment of counterpart funding and facilitation at the work premises as intervention by the local residents caused the delay. Deputy Chairman ERRA pledged the visiting delegation that working environment would be made congenial so that all ongoing projects to be completed within stipulated time. About the Chinese construction company apprehension regarding interference by the local residents and attached security threats, non-availability of counterpart funding, the Deputy Chairman ERRA vowed to resolve all security concerns and funds issues to complete City Development Projects in Muzaffarabad, Bagh and Rawalakot as per contract conditionalities.



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Government accords priority to socio-economic development of Fata people: President July 11, 2014

President Mamnoon Hussain reiterated that the government accorded highest priority to the socio-economic development of Federally Administered Tribal Areas (Fata) and urged for stepping up efforts to bring the people of tribal areas at par with other parts of the country in terms of development. The President said this during his meeting with a delegation of Parliamentarians from Fata that called on him here on Thursday. The delegation of Fata MNAs led by Alhaj Shah Jee Gul Afridi, included Dr G G Jamal, Bilal-ur-Rehman, Nasir Khan, Mohammad Jamal Uddin, Ghalib Khan and Qaiser Jamal. Overall situation in Fata with particular reference to Law and order situation, IDPs situation and developmental matters in their respective constituencies were discussed during the meeting. Discussing security situation in Fata, the President expressed hope that the ongoing military operation in North Waziristan would prove to be instrumental in bringing peace and security to Pakistan and urged for supporting the Jawans of Pakistan Armed forces to make the operation Zarb-e-Azb a success. The President lauded the sacrifices of the people of North Waziristan for the peace and stability of the country and said that the government has devised a comprehensive rehabilitation plan for the IDPs, assuring that they would be rehabilitated with honour and dignity, after the operation is over. The President also assured that all possible steps are being taken by the government to look after the IDPs and urged the authorities concerned to make sure that every child residing in the IDPs camps is vaccinated for polio in an effort to eradicate the crippling disease. The Fata Parliamentarians apprised the President about the security situation in Fata and the rehabilitation of IDPs besides developmental matters concerning their respective areas. The President said that vigorous efforts and steps are being undertaken at all levels to redress the grievances of the tribal people and to remove their sense of deprivation.-PR



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Uplift projects in Fata: government urged to make policy for donor agencies, NGOs July 11, 2014

NAVEED BUTT

National Assembly Standing Committee on States and Frontier Regions (SAFRON) has recommended the government to make a policy for national and international donor agencies and NGOs to consult local public representatives prior to launching any development projects in Federal Administered Tribal Area (FATA). The Committee met with Muhammad Jamal ud Din in the Chair at Parliament House on Thursday. Federal Minister for States and Frontier Regions, Lieutenant General Abdul Qadir Baloch (Retd), MNAs Ghalib Khan, Sahibzada Tariq Ullah, Dr Asma Mamdot and others participated in the meeting. The committee discussed the on-going development projects/schemes, national/international donor agencies, audit reports of complete development projects and other projects in the meeting. Abdul Qadir Baloch said national/international donors and NGOs could not function in FATA without taking No Objection Certificate (NOC). He said that foreign donor agencies should consult local MNAs to start any development projects in Waziristan. The Secretary planning and development FATA told the committee that foreign donor agencies should involve local community to launch any scheme in FATA. He said that the United States Agency for International Development (USAID) has spent Rs 190 million out of Rs 380 million on development projects. He said most of the projects are related to health and education sector. Committee Chairman Muhammad Jamal ud Din said that donor agencies should involve the local MNAs to decide and launch any development project in FATA. He said that NGOs do not even spend half of the allocated amount for the project and alleged they are involved in embezzlement. Dr Asma Mamdot said that the parliamentarians had strong reservations over the functioning of national /international donor agencies and local MNAs should be involved in launching of any project. The chairman said that 36,000 families of South Waziristan (S.W) had been registered but they were not given any amount or relief so far. The Additional Chief Secretary of FATA said while briefing the committee that the IDPs of South Waziristan consists of 322,886 families. He said that a total of Rs 56 billion per year were being spent on the IDPs. He said that 36,000 families were being provided food and security. He said that during military operation in South Waziristan, the government had appealed the international community for the relief and reconstruction of IDPs; however this time around the government had changed the policy and decided not to seek any foreign assistance for the IDPs of North Waziristan. Abdul Qadir Baloch said that the government would treat equally all IDPs and the government has to give Rs 12000, which was earlier Rs 7000 and Rs 3000 would be provided as house rent.


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He said that the government would also provide assistance to IDPs mentioned by the committee chairman.


Services sector posts 4.3 percent growth July 11, 2014

Services sector posted a 4.3 percent growth during FY14 as against the target of 4.6 percent. FY14 growth in services is also lower than last year, in which it registered a 4.9 percent growth. According to State Bank''''s third quarterly report, this relatively weak performance is largely because of finance & insurance and general government services, whereas wholesale & retail trade and transport, storage & communication continued to provide impetus to overall growth in services. A strong growth in LSM, better production of major crops and the increase in trade volumes, largely explain an increased activity in wholesale and retail trade. Furthermore, the strong credit growth to wholesale and retail trading, also bodes well for this sub-sector, the report said. In the transportation sector, PIA struggled with operating losses; the company posted a net loss of Rs 44.5 billion during CY13, as compared to Rs 30.6 billion in CY12.27 However, recent corporate results for Q1-CY14 reveal an improvement as the net loss has fallen from Rs 8.62 billion in Q1-CY13 to Rs 1.98 billion in Q1-CY14. A stronger revenue growth could be traced to the acquisition of four narrow body aircraft, as well as stability in the exchange rate. The growth in communication came mainly from value-addition in cellular segment. According to PTA, cellular companies operating in Pakistan earned a revenue of Rs 440.2 billion in FY 2012-13, which is the highest recorded. The auction for licenses for 3G/4G spectrum is likely to boost revenues in this segment of the telecom sector, it added.


LSM registers growth July 11, 2014

Large Scale Manufacturing (LSM) recorded a growth of 4.3 percent during Jul-Mar FY14, compared to 3.5 percent during the corresponding period of last year. According to State Bank''''s third quarterly report issued on Thursday, this higher growth was largely concentrated in sugar and fertilizer and quarterly data reveals a sharp decline in YoY growth of LSM during Q3-FY14. However, despite the subdued performance during Q3-FY14, overall LSM growth during Jul-Mar FY14 was still higher than the previous year. In fact, some of the industries (eg, urea, leather products, soft drinks, and petroleum products) continued to show a strong growth throughout the year.


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According to report, some slowdown in LSM growth was expected due to the high base effect from September 2013, other factors also dampened LSM growth in Q3-FY14. First, sugarcane crushing was concentrated in Q2-FY14, which meant a lower production was realised in the third quarter. This trend stands in sharp contrast to last year, when most of the crushing was carried out in Q3-FY13. Second, the drag on Q3 growth came from the textile sector, especially cotton yarn. This moderation in growth was unexpected as it primarily came from a reversal in China''''s cotton policy. Finally, the poor performance of Pakistan Steel Mill also pulled down LSM growth. Specifically, the production of coke and pig iron came to a halt in Q3-FY14, which at the margin had a significant impact on overall LSM growth during Q3-FY14. In addition, the rise in power tariffs for industrial users in September 2013, increased the production costs for almost all industries. Moreover, the imposition of Gas Infrastructure Development Cess (GIDC) in January 2014 increased the cost for gas-dependent industries such as textiles, fertilizer, cement and paper. Furthermore, industries which are heavily dependent on imported raw materials like POL, faced rising costs following the sharp depreciation of the PKR against major currencies during Q1-FY14. Similarly, a steady increase in the price of palm oil in the international market adversely impacted the cooking oil and ghee production, the report said.


LCCI chief asks FBR to help resolve sales tax adjustment issue July 11, 2014

President Lasbela Chamber of Commerce and Industry's (LCCI) President Ismail Suttar has urged the Federal Board of Revenue (FBR) to take up the matter with Pakistan Revenue Automation (Pvt) Ltd to update automated revenue service in order to remove the difficulties being faced by manufacturing industries in getting their sales tax adjusted. Suttar, who is also Vice President of Federation of Chambers of Commerce and Industry (FPCCI), pointed out that the importers and several business houses have been facing unnecessary hurdles in getting their sales tax adjusted following abrupt revision of PRAL system was enforced. LCCI chief also urged the FBR not to make arbitrary changes in PRAL system for manufacturing industries mainly to cover its own weaknesses in enhancing the revenue collection. Mentioning that many industries have to pay customs duty, income tax and sales tax on manual challans at the stage of import due to limitations of automated system, he said that these payments were received by the customs authorities after due vetting and clearance of goods at import stage, but the same was not being allowed to be adjusted in the system which is usually done in the monthly sales tax returns filed by the industries. He added that the industry was facing a similar issue with regard to the FED adjustment on oil


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imports. After many months of efforts, FBR allowed it for the industry. However, the system was not upgraded to allow all industries to claim the rightful adjustments. He deplored that although the affected persons have repeatedly brought the lingering issue in to the notice of the relevant authorities, including the RTOs, PRAL and Customs department, none of them have, so far, taken measures to update the system.


Call for Army's deployment in Karachi: businessmen's meeting with Prime Minister July 11, 2014

Chairman Businessmen Group (BMG) and former president of Karachi Chamber of Commerce and Industry (KCCI), Siraj Kassam Teli, and President KCCI, Abdullah Zaki, apprised Prime Minister Muhammad Nawaz Sharif about rising lawlessness in Karachi and the inability of Law Enforcing Agencies to restore peace in Karachi. During a meeting with Prime Minister during his visit to Karachi on Thursday, Teli and Zaki presented a letter to Prime Minister along with a copy of resolution duly signed by six town associations of Karachi, wherein the entire business community of Karachi city demanded army's deployment and shutdown of all prepaid SIMs with a view to effectively deal with poor law and order situation. Chairmen of six town associations, who are signatories of the resolution, were also present at the meeting. They all endorsed KCCI's demands to deploy army in Karachi and blocking all prepaid SIMs. Siraj Teli and Abdullah Zaki, while expressing sheer disappointment over poor performance of law enforcing agencies, said that the operation by Police and Rangers against criminals to improve the law and order situation of Karachi had lost its effectiveness and the incidents of criminal activities such as kidnapping for ransom, extortions, street crimes, targeted killings have risen and are not controllable by them anymore. They, on behalf of Karachi city's business and industrial community, requested the Prime Minister to order army's deployment as per Constitution in aid of Civil Government. Deployment of Army in Karachi has become inevitable due to expected reaction of Zarb-e-Azb operation as has been done in Islamabad, Multan and other cities, whereas Karachi is more vulnerable. They urged Prime Minister to issue strict directives for complete blockade of all prepaid SIMs, as criminals are using illegal prepaid SIMs to carry out their activities. Over 70 percent of crimes of all kind take place by using mobile phones with prepaid SIMs and the only solution is to block all the prepaid SIMs in one go and get them reissued to the postal addresses through courier service as per CNIC already provided, which will automatically get rid of all such SIMs issued illegally on fake CNICs. They hoped that being a democratically-elected Prime Minister for the 3rd time and as an industrialist, the Prime Minister would pay heed to business community's request by ordering immediate action on these two issues.-PR



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Traffic jam, roadside parking hit trade activities July 11, 2014

With advent of Ramazan, the traffic chaos on different roads grew largely to hamper trade and business activities at markets as traders seek the government's help to remove roadside vehicles parking facilities to ease the public movements. "If the roadside vehicle parking facilities further increased in the absence of traffic police personnel, the Eid shopping season for traders would become unviable since inside or linking roads to markets are already chocked for public movements," they said. The traffic system in the city is almost 'dysfunctional' as willy-nilly vehicles movements on main roads brought about hours long congestions that continue to hit the business activities badly especially in the holy month, they said. "The traffic disorder in the first 10 days of Ramazan shows the traffic police have no role in managing the vehicular flow," said chairman All Karachi Tajir Ittehad, Muhammad Atiq Mir on Thursday, adding that "40 per cent sales plunged since the traffic is chaotic in the city". He said the government should plan to end the traffic temporary chaos that hit often the roads bringing civic and commercial life to a standstill for hours and warned that the lack of any strategy would cause a wheel-jam like situation to the city. He proposed the government to build parking plazas to end the growing roadside parking in the city to ease the traffic and pedestrian movements. "It is a serious issue and the government should make permanent arrangements to help the city have a smooth flow of vehicles traffic," Atiq Mir said. He was of the view the growing landing of around 800 vehicles a day is a real cause behind the traffic disorder in the absence of traffic police inaction to manage the vehicle flow. "There is 3.2 million vehicles on the city's roads which only 3340 traffic police personnel are assigned to manage their flow," he said. Showing concerns, the chairman AKTI said the traffic jams and disorder cause million of rupees oil fuel loss to the public on a monthly basis. He urged the government to cleanse the footpaths from illegal hawkers and end the unauthorised roadside vehicle's parking to ease the traffic flow and help grow business activities," he added.



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Over 3.000 new drugs pending registration: DRAP fails to check drug prices July 11, 2014

AAMIR SAEED

The Drug Regulatory Authority of Pakistan (DRAP) has failed to keep check on prices of drugs as more than 3,000 new drugs are pending registration. The data available with Business Recorder shows that 247 imported human drugs, 3,036 locally manufactured drugs and 429 local and imported veterinary drugs are pending registration. Some applications for registration of these drugs were pending since 2006. A senior official of the DRAP said that a meeting of the DRAP is scheduled to be held on July 14, 2014 to look into different issues including registration of the new drugs. "Different pharmaceutical companies have been pushing the authority for registration of the new drugs but the matter keeps lingering for different reasons," he said. The DRAP was established under the 2012 Act to keep a check on prices of the drugs, register new ones and assure quality of the medicines by regulating the pharmaceutical companies. The official said that since the DRAP is infested with corruption; the pharmaceutical companies keep increasing prices of different medicines including life saving drugs at their own sweet will. Some companies have obtained stay orders from Sindh High Court against jacking up of the prices but the federal government and the health ministry are not taking cogent steps to get the stay order vacated, he said. The official said that the DRAP Chief Executive Officer Muhammad Arshad Khan was an incompetent person and not taking the host of the issues seriously. "The CEO remains busy in his personal endeavours during the office hours and have no time to look into the issues pertaining to his department," he said. The official said that the local and multinational pharmaceutical companies have been charging 15 to 20 percent extra price of different medicines but there is no mechanism to keep a check on them. "The DRAP needs to devise a mechanism to impose fines on the profiteers and seal their companies if they violate the prices fixed by the government," he said. There are a few number of laboratories in the provinces to check quality of the drugs but the facilities are seldom utilised, he said. The official said that the DRAP should make rules and regulations to scrutinise prices of the medicines by sending inspectors to the market. "At the moment, the DRAP could not initiate any inquiry against any pharmaceutical company or check the market prices of the medicines until a complaint is registered with the authority," he said. DRAP CEO Muhammad Arshad Khan could not be reached for comments.



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Planned merger: Holcim, Lafarge announce list of proposed asset disposals July 11, 2014

Lafarge and Holcim have taken a further step towards their planned merger of equals to create LafargeHolcim, the most advanced and innovative group in the building materials industry. A Divestment Committee was set up by both companies, following the announcement of the planned merger on April 7, with the aim of taking forward the divestment process. It has drawn up a list of proposed asset disposals, to anticipate potential competition authorities' requirements. The announcement represents a major part of the total assets that the two companies aim to divest. The two companies are proposing the following disposals: EUROPE: Austria: Lafarge's Mannersdorf cement plant. FRANCE: Holcim's assets in metropolitan France, except for its Altkirch cement plant and aggregates and ready-mix sites in the Haut-Rhin market; Lafarge's assets on Reunion island, except for its shareholding in Ciments deBourbon -- GERMANY: Lafarge's assets -- HUNGARY: Holcim's operating assets -- ROMANIA: Lafarge's assets -- SERBIA: Holcim's assets -- UK: Lafarge Tarmac assets with the possible exception of one cement plant The future LafargeHolcim group will have a significant and balanced industrial base in Europe - around 20 percent of its revenues - within its overall global footprint, enabling it to take advantage of the European economic recovery. OTHER COUNTRIES -- CANADA: Holcim's assets -- MAURITIUS: Holcim's assets -- THE PHILIPPINES: the associated companies of Lafarge and Holcim (Lafarge Republic Inc - LRI and Holcim Philippines Inc) are exploring the combination of their businesses other than LRI's Bulacan, Norzagaray, and Iligan plants which are considered to be divested as part of such combination. -- BRAZIL: Holcim and Lafarge will file soon with the Brazilian regulator, CADE, and propose a comprehensive and high quality package of divestments. Both companies will continue to


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consider whether divestments would be necessary where there might be overlaps or depending on regulatory requirements. These proposed divestments are subject to review and further discussions with the regulatory authorities and to the agreement of our business partners when relevant. The divestment process will be carried out in the framework of the relevant social processes and ongoing dialogue with the employee representatives' bodies and will be conducted in parallel to discussions with the competition authorities and potential buyers. The divestment process will be completed subject to the closing of the merger between Holcim and Lafarge. This announcement follows the formal signing of the combination agreement, marking the conclusion of the merger terms announced on April 7, 2014. The combination remains conditional upon the required regulatory and other customary consultations and approvals. As announced, the closing of the planned merger is expected in H1 2015, aiming to create the most balanced and diversified portfolio in the industry, operating in 90 countries and creating superior value for its stakeholders.-PR


KPT restrained from transferring contractor's money to NAB July 11, 2014

The Sindh High Court (SHC) on Thursday restrained Karachi Port Trust (KPT) from transferring foreign contractor's frozen amount of over Rs 60 million to National Accountability Bureau (NAB) investigating the fraudulently evasion of stamp duty worth Rs 30.07 million by the firm. A division bench headed by Justice Muhammad Ali Mazhar gave this interim order on a petition filed by China International Water & Electric Company (CWE) challenging a letter of NAB authorities issued to KPT for freezing outstanding amount of contractor. The bench issued notices to secretary interior ministry, ports and shipping, chairman NAB and KPT authorities to submit their respective comments on this petition by July 18. Firm's counsel submitted that CWE was awarded a dredging contract by KPT for construction of Pakistan Deep Water Container Port. He said the contractor was exempted from actual stamp duty and was asked to pay reduced stamp duty worth Rs 8.5 million by chief inspector stamps, Board of Revenue (BOR), as according to Stamp Act 1899, no duty is paid in respect of any contract executed with or in favour of government and in all such cases government has to pay the duty. The counsel said that almost two years after the signing of contract, NAB authorities initiated an inquiry against the firm for allegedly fraudulently paying reduced stamp duty of Rs 8.5 million instead of actual Rs 30.07 million, which caused a purported loss to national exchequer. Subsequently, he said that NAB has directed KPT to freeze the outstanding amount of petitioner in May 2014.


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Copyright Pakistan Press International, 2014

Activities at Karachi and Qasim ports July 11, 2014

The Karachi Port handled 116,139 tonnes of cargo comprising 70,739 tonnes of import cargo and 45,400 tonnes of export cargo including 4,764 loaded and empty containers during the last 24 hours ending at 0700 hours on Thursday. The total import cargo of 70,739 tonnes comprised of 36,172 tonnes of containerised cargo; 412 tonnes of general cargo; 665 tonnes of DAP and 33,490 tonnes of oil/liquid cargo. The total export cargo of 45,400 tonnes comprised of 24,319 tonnes of containerised cargo; 137 tonnes of general cargo; 494 tonnes of cement and 20,450 tonnes of oil/liquid cargo. As many as 4,764 containers comprising 2,461 containers import and 2,308 containers export were handled during the last 24 hours on Thursday. The break-up of imported containers shows 1,018 of 20's and 608 40's loaded while 41 of 20's and 93 of 40's empty containers, whereas that of exported containers shows 662 of 20's and 384 of 40's loaded containers while 202 of 20's and 338 of 40's empty containers were handled during the business hours. There were eight ships namely Express Kailash, OOCL New York, Kota Karim, Al-Salam-II, El Gurdabia, YA Karim-K Osam Jumbo-5 and Thorco Sapphire carrying containers, oil tanker, bulk cargo, tug and general cargo respectively sailed out to sea during the reported period. There were six vessels viz. Kota Karim, PAC Aries, Hansa Siegburg, Oriental Gold, Selecta and Muroto carrying containers, oil tanker, fertilizer and general cargo respectively currently at the berths. There were three ships namely Hansa Siegburg, Erika Schulte and Muroto carrying containers, oil tanker and general cargo respectively sailed out to sea on Thursday, while two ships namely Santa Rosa and Oriental Gold carrying containers and oil tanker respectively are expected to sail on Friday. There were two vessels viz. Niara and Rich Sino carrying containers and oil tanker respectively due to arrive on Thursday, while four vessels viz. Lissy Schulte, Kota Lawa, Chrisopigi Lady and Trans Spring carrying containers, mogas and steel respectively are due to arrive on Friday.

PORT QASIM

A cargo volume of 70,913 tonnes comprising 57,767 tonnes of import cargo and 13,146 tonnes of export cargo inclusive 1,494 loaded and empty containers (TEUs) was handled at Port Qasim during the last 24 hours on Thursday. The total import cargo of 57,767 tonnes includes 31,131 tonnes of furnace oil; 5,008 tonnes of coal; 3,400 tonnes of chemical and 18,228 tonnes of containerised cargo. The total export cargo includes 13,146 tonnes of containerised cargo. There were five ships namely CV Express Kailash, CV CMA CGM Balzac, MV Atlantic Glory, MV Mega Ocean and MT Brizo with containers, coal chemical and furnace oil sailed out sea on Thursday morning, while another ship namely CV MSC Jenny with containers is


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expected to sail on the same day afternoon. A total number of eight vessels viz. CV Express Kailash, CV CMA CGM Balzac, CV MSC Jenny, MT Ocean Royal, MV Atlantic Glory, MV Mega Ocean, MT Brizo and Golden Covenant currently occupied berths to load/offload containers, cement, chemical, coal, furnace oil and edible oil respectively during the last 24 hours. As many as twelve ships namely Phoenix, Express Makalau, CMA CGM Kingfish, Mega Lahori, MT Quetta, Al-Soor-II, Ashahda, Kuran, Moon Ray, Theresaled, Hullin and Ocean Success with containers, coal, cement, chemicals furnace oil, edible oil and general cargo are currently at the outer anchorage of Port Qasim. There were five vessels with containers, chemical and edible oil took berths at Qasim International Containers Terminal, Engro Vopak Terminal and Liquid Cargo Terminal respectively on Wednesday. There are eight ships namely CV Phoenix, CV CMA CGM Kingfish, CV Express Makalau, MV Mega Lahori, MT Al-Soor-II, MV Moon Ray, MV Hullin and MV Ocean Success with containers, coal, cement, chemicals diesel oil and general cargo due to arrive on Thursday.


Shipping Intelligence July 11, 2014

Karachi Shipping Intelligence report incorporating changes till 7 am on Thursday (July 10, 2014).

============================================================================ VESSELS ON BERTH ============================================================================ Berth Ship Working Agent Berthing No Date ============================================================================ ALONG SIDE (BULK OIL PIER) ---------------------------------------------------------------------------- OP-II Oriental Gold L. Naptha ALPINE 09/07/2014 ---------------------------------------------------------------------------- ALONG SIDE (EAST WHARVES) ---------------------------------------------------------------------------- 1 Erika Schulte L. Ethanol EAST WIND 08/07/2014 5 Muroto D. Gen.Cargo GAC 10/07/2014 13/14 Selecta D. DAP OC-SERVICES 09/07/2014 ---------------------------------------------------------------------------- ALONG SIDE (P.I.C.T) ---------------------------------------------------------------------------- 6/7 Santa Rosa D. L. Cnt NOT PROVIDED 08/07/2014


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8/9 Hansa Siegburg D. L. Cnt NOT PROVIDED 09/07/2014 ---------------------------------------------------------------------------- ALONG SIDE (WEST WHARVES) ---------------------------------------------------------------------------- 19 Sea Wave L. Cement ARGONAFTIS 19/06/2014 ---------------------------------------------------------------------------- ALONG SIDE (K.I.C.T) ---------------------------------------------------------------------------- 29/30 Pac Aries D. L. Cnt APL 09/07/2014 ============================================================================ EXPECTED ARRIVALS ============================================================================ Name of Agents Arrival Import Export Vessels Name Date Tons Tons ============================================================================ CONTAINER (GEARLESS) ---------------------------------------------------------------------------- Niara EAST WIND 10/07/2014 600 Cnt 600 Cnt Northern Prelude EAST WIND 11/07/2014 600 Cnt 600 Cnt MOL Dignity MOL PAK 13/07/2014 1000 Cnt 1000 Cnt Cosco Kobe COSCO 24/07/2014 600 Cnt 600 Cnt ---------------------------------------------------------------------------- CONTAINER (GEARED) ---------------------------------------------------------------------------- Ponente GOLDEN 13/07/2014 648 Cnt 262 Cnt ---------------------------------------------------------------------------- GENERAL CARGO ---------------------------------------------------------------------------- Trans Spring AARAS-SH 10/07/2014 24,225 Steel Nil Nobel Coral UNIVERSAL 11/07/2014 770 G.C Nil ---------------------------------------------------------------------------- VEHICLE ---------------------------------------------------------------------------- Positive Pioneer UNIVERSAL 14/07/2014 12 Units Nil ---------------------------------------------------------------------------- COAL ---------------------------------------------------------------------------- Ikan Sembak OC.WORLD 10/07/2014 22,000 Nil ---------------------------------------------------------------------------- LOADER ---------------------------------------------------------------------------- Somerset ARGONAFTIS 10/07/2014 Nil 19,200Cement ---------------------------------------------------------------------------- MEAL ---------------------------------------------------------------------------- Port Menier COASTAL 12/07/2014 38,870 Nil ---------------------------------------------------------------------------- OIL TANKER ---------------------------------------------------------------------------- Chrisopigi Lady TRANS MARITIME 10/07/2014 50,000 Mogas Nil


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Rich Sino ALPINE 10/07/2014 6,000 P.Oil Nil ============================================================================ SHIP DEPARTURES ============================================================================ Vessel Name Port Name Agent LOA DepartureDischarging Date ============================================================================ OOCL New York N/A NOT PROVIDED 277 Containers 10/07/2014 El Gurdabia N/A TRANS MARITIME 250 Crude Nil 10/07/2014 Kota Karim N/A NOT PROVIDED 233 Containers 09/07/2014 Thorco Sapphire N/A PROJECT-SH 119 GC 09/07/2014 Al Salam II N/A GAC 228 HSD 09/07/2014 X-Press Kailash N/A NOT PROVIDED 221 Containers 09/07/2014 ============================================================================ MISCELLANEOUS VESSELS EXPECTED OFF PORT ============================================================================ Vessel Name Type Agent Expected ArrivalBerth No Date ============================================================================ United Grace Oil Tanker TRANS MARITIME Not Allocated 09/07/2014 Karachi Oil Tanker PNSC OP-II 09/07/2014 ============================================================================ PORT QASIM INTELLIGENCE ============================================================================ Berth Vessel Working Agent BerthingDate ============================================================================ MULTI PURPOSE TERMINAL ---------------------------------------------------------------------------- MW-1 Atlantik Glory Chemical East Wind 09.07.2014 MW-2 Ocean Royal Cement Ocean Service 08.07.2014 ---------------------------------------------------------------------------- LIQUID CARGO TERMINAL ---------------------------------------------------------------------------- LCT Golden Covenant Edible Oil Alpine Marine 09.07.2014 ---------------------------------------------------------------------------- QASIM INTERNATIONAL CONTAINER TERMINAL ---------------------------------------------------------------------------- QICT Express Kallash Containers Express Feeders 09.07.2014 QICT MSC Jenny Containers MSC Pak 09.07.2014 ---------------------------------------------------------------------------- 2nd CONTAINER TERMINAL ---------------------------------------------------------------------------- QICT CGM Balzac Containers CGM Pak 09.07.2014 ---------------------------------------------------------------------------- IRON ORE & COAL BERTH ---------------------------------------------------------------------------- IOCB Mega Ocean Coal WMA Shipcare 04.07.2014 ---------------------------------------------------------------------------- FOTCO OIL TERMINAL ---------------------------------------------------------------------------- FOTCO Birzo Furnace Trans Trace 08.07.2014 ----------------------------------------------------------------------------


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ENGRO VOPAK TERMINAL ---------------------------------------------------------------------------- FAP NIL ============================================================================ DEPARTURES ============================================================================ Vessel Commodity Ship Agent Departure Date ============================================================================ Express Kallash Containers X-Press Feeders 10.07.2014 Mega Ocean Coal WMA Shipcare -do- Birzo Furnace Trans Trade -do- Atlantik Glory Chemical East Wind -do- CGM Balzac Containers CGM Pak -do- MSC Jenny Containers MSC Pak -do- ---------------------------------------------------------------------------- VESSELS AT OUTER ANCHORAGE ---------------------------------------------------------------------------- Al Soor II Diesel Oil Wilhelmsen - Mega lahore Coal WMA Shipcare - Ashahda Furnace Oil PNSC - Khuran Diesel Oil Alpine Marine - MT Quetta Furnace Oil PNSC - Moon Ray Cement Seatrade - Theresaled Edible Oil Alpine Marine - Hullin Chemical East Wind - Express Makalau Containers - - CGM Kingfish Containers - - Ocean Success G. Cargo - - Phoenix Containers - - ============================================================================ EXPECTED ARRIVALS ============================================================================ Mega Lahori Coal WMA Shipcare 10.07.2014 Hullin Chemical East Wind 10.07.2014 Moon Ray Cement Seatrade 10.07.2014 Express Makalau Containers - 10.07.2014 Ocean Success G. Cargo - 10.07.2014 CGM Kingfish Containers - 10.07.2014 Phoenix Containers - 10.07.2014 Al Soor II Diesel Oil Wilhelmsen 10.07.2014 ============================================================================


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Transport, other projects: Prime Minister renews focus on Karachi July 11, 2014

Prime Minister Nawaz Sharif on Thursday announced immediate construction of a Bus Rapid Transit System in Karachi to help ease transport problems in country''s largest city. The Prime Minister, who was in Karachi to discuss various development projects, said the Federal government would construct the Metro Bus service on the pattern of that employed in Lahore and Rawalpindi, without any delay. The Prime Minister during a meeting at Governor''s House announced Rs 15 billion for the project - to be called Green Line - and said the share of the Sindh and Karachi City government would be fully borne by the federal government. He said the project would be completed in the shortest possible time. He said the government was fully cognisant of the transport problems of Karachi and said the rapid bus system would bring about a revolution in the transportation system for the residents of Karachi. The Prime Minister said he was confident that Karachi would regain its past glory and the title of ''City of Lights''. He also announced allocation of Rs 55 billion for acquisition of land for the Karachi-Lahore motorway. He said the funds had been released to the National Highway Authority and work would start in a few months time. The Prime Minister also announced early completion of Gaddani Power Park and two power projects at Port Qasim.


Aircraft acquisition: PIA exempted from application of PPRA rules July 11, 2014

MUSHTAQ GHUMMAN

Pakistan International Airlines (PIA) has been exempted from application of Public Procurement Regulatory Authority (PPRA) rules in acquisition of seven aircraft on lease, official sources told Business Recorder. This decision was taken at the meeting of PPRA Board meeting held on June 30, 2014 under the chairmanship of Chairperson Nazrat Bashir. The meeting was attended by Dr Waqar Masood, Secretary Finance, Younus Dagha, Secretary, Housing, Lieutenant General Tanvir Tahir (Retd), Secretary, Defence Production Division, Nargis Sethi, Secretary Ministry for Water and Power, Raja Hasan Abbas, Secretary Industries and Production (MoI&P) and Secretary Communication. According to sources, Secretary Aviation Division/ Chairman PIA, who attended the meeting on a special invitation, presented the agenda item and informed the forum that airline floated several


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tenders for procurement of new aircraft to replace its aged fleet. Recently, two of PIA''s aircraft - Being 747 and A 310 - were damaged during a terrorist attack on the Karachi airport. The airline planned to use its own capacity for carriage of Hajj pilgrims and Umra for Hajj season, 2014. He maintained that due to a dynamic nature of aviation, suppliers are hesitant to keep their aircraft out of the market until the tendering process is completed. Chairman PIA further stated that PIA intends to induct additional aircraft on a lease basis because the present fleet is unable to meet airline needs. Hence, PIA desired to lease seven aircraft under Rule 42(d) (iii) of Public Procurement Rules, 2004 with the permission of PPRA Board. With the permission of the chair, Managing Director PPRA explained that in order to invoke Rules 42(d)(iii) of PPRA 2004, permission of the Authority is not required. Any procuring agency can invoke this rule subject to meeting underlying conditions mentioned therein. The chair also explained that the PPRA rules/laws were self regulatory where the procuring agencies were mostly competent to take action without consulting the PPRA. Secretary Aviation acknowledged the rule position. Official documents reveal that in April 2014, Economic Co-ordination Committee (ECC) of the Cabinet had directed PIA to refrain from giving any relaxation in terms and conditions in acquisition of aircraft on dry lease even with the approval of its Board of Directors (BoD), as it may lead to litigation. The government had allocated an amount of Rs 16 billion as a cash support for PIAC which was to be released after approval of ECC. The apportionment of amount was as follows: (i) payment to overdue vendors- Rs 7 billion; (ii) EXIM Bank guaranteed loan instalments- Rs 5.7 billion; and (iii) acquisition of aircraft on dry lease- Rs 3.3 billion. It was pointed out that ECC on July 12, 2013 approved the release of Rs 12.7 billion while an amount of Rs 3.3 billion, against a dry lease of aircraft was yet to be released as the acquisition of aircraft were under process. It was stated that ECC in its meeting held on December 3, 2013 approved acquisition of five (A320-200) aircraft on a dry lease out of 10 shortlisted and did not approve five A-319 aircraft. PIAC after due process signed an LoI with the GECAS for three aircraft; however, 5MBC withdrew their offer for two aircraft. The ECC further directed in its meeting held on December 3, 2013 and during a progress review meeting dated February 13, 2014 to float tenders for an additional ten new generation narrow body aircraft. They said tenders were accordingly floated as per PPRA Rules. The tenders were opened on March 7, 2014 in presence of the media in which two companies participated ie Qatar Aviation Lease Company (QALC) and KL Aero parts of Bulgaria. The offer of 8 aircraft of QALC was considered by the committee. The results of the bids were uploaded on the website for 10 days as required under PPRA Rules. Aircraft have been selected after due diligence offered by Qatar Aviation Lease Company. These aircraft would be available from April 2014 to July 2014. PIAC was at present in the process of signing an LoI with the said company. PIAC now urgently requires requisite funds for initial deposits, training, acquisition of tools, equipment, manuals and spares.



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NHA sneakily raises toll rates by 50 percent, National Assembly body told July 11, 2014

TAHIR AMIN

The National Highway Authority (NHA) has secretly increased toll rates by 50 per cent, putting a heavy burden on general public. This was revealed by the Authority officials while briefing the National Assembly Standing Committee on Communication which met with Sufyan Yusuf in the chair here on Thursday. Member Finance NHA Shoaib Ahmad Khan said that toll rates at all the three motorways have been standardised and increased by 50 per cent. Earlier, Rs 0.80 per km was charged from vehicles, however now it has been increased to Rs 1.20 per km, he added. The committee expressing serious reservations over the increase in toll rates observed that nobody was informed prior to the exorbitant increase, and directed to brief the committee in the next meeting. The committee expressed serious concerns over non-computerisation of toll plazas, saying that it was causing huge loss to the national exchequer. The parliamentary panel had earlier directed to computerise all the toll plazas on motorways to avoid mismanagement; however the authority officials informed that 17 toll plazas would be computerised in next one-and-a-half month while the remaining would take about 2-3 months. The committee also voiced concern over the absence of Minister for Communication and Parliamentary secretary from the committee meeting. The chairman of the committee said that the M-9 is the lifeline for off country trade from Karachi and Port Qasim and would play a vital role in the proposed Economic Corridor project, however high-ups are not giving due attention to the committee meetings where the project is being discussed. The General Manager (GM NHA Mohammad Yousaf informed that the committee that Karachi-Hyderabad Motorway (M-9) of 136 km would be completed at a cost of Rs 36 billion including Rs 25 billion (70 per cent) debt and Rs 10 billion (30 per cent) equity in 30 months. He further said that the conversion of existing Karachi-Hyderabad Superhighway into 6-lane motorway is an important part of Karachi-Lahore Motorway (KLM) project and carries high priority for implementation. The Authority intends to undertake the project on Built, Operate and Transfer (BOT) basis, the GM added. The NHA official further said that three bids were received from three different firms where the bids of two firms including (i) M/s National Logistic Cell (NLC) Habib Construction, JV and (ii) M/s Frontier Works Organisation (FWO) were evaluated and letter of Support (LoS) was issued in the favour of later on July 4, 2014. Some committee members objected the awarding of the contract to FWO saying that it seems that there is no other contractor to carry out works and each and every contract is awarded to it. Member Planning Raja Nowsherawan informed the committee that three contracts left by other contractors in Balochistan due to security concerns were awarded to the FWO. Further one contract ie Kalat-Quetta-Chaman road project funded by the USAID was being awarded on their demand to the FWO, he maintained. The committee further recommended the National Highway


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and Motorway Police (NH&MP) to ensure the discipline in case of heavy traffic plying on motorways as it is causing accidents.


Expediting pending court cases: PAC recommends government to amend relevant laws July 11, 2014

Public Accounts Committee's (PAC) Monitoring and Implementation Committee recommended the government to make amendments in the relevant laws, so that government cases pending in the courts could be expedited. The committee was convened by Rana Afzaal Hussain on Thursday which examined the audit reports of Pakistan State Oil for year 1996-97, 1999-2000 and 2000-01. Member Committee Mian Abdul Manan observed that after committing embezzlements, the accused were able to get stay from the courts of law. As a result, the cases against corrupts linger on in the courts for long and they took benefits of the situation. He suggested the committee to recommend the government to bring amendments in the laws so that the cases filed by the government to be expedited. The committee was informed that Raji and Hajwari airliners were defaulter of Rs 158 million of Punjab government since 1998-99. They had taken un-secure loans against the fuel. The cases were referred to NAB for further investigation. The cases were also in courts of law since long. The Chairman Committee expressed his displeasure on the unsatisfactory performance of legal team of PSO and directed for its replacement with real professionals. Officials of Audit further informed the committee that PSO administration signed a hiring contract with a private party to set up an office and advance payment of Rs 4.475 million was made in this regard. The case was in NAB after owner refused to refund the amount. In another case, during 1995 to 1996 M/s Supreme Carriage was paid Rs 20.73 million on bogus bills; however no recovery has been made to date. The committee sought detail from PSO management till July 24.


PCDMA elections on September 25 July 11, 2014

The annual elections of the members of Executive Committee of Pakistan Chemicals & Dyes Merchants' Association for the year 2014-15 will be held on Thursday (September 25, 2014).


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According to the elections schedule on 9 seats has been released by the association here on Thursday, the elections would be held at Karachi, Lahore & Faisalabad between 10:00 am to 6:00 pm. The polling venues would be the Association's Head Office in Karachi, Chemical & Dye House, Rambharti Street Jodia Bazar, Karachi, Northern office S-38-R-10/23, Barkat Ali Khan Center, Office 23, 2nd Floor, Circular Road, Lahore and Branch office, Faisalabad, Universal Chemical Store Shop 8, Sitara Market, Maqbool Road, Faisalabad as per election program, duly approved by the Executive Committee of the Association in its meeting held on Saturday, June 28, 2014. As per rule 14 of Trade Organisation rules 2013, PCDMA Executive Committee in their meeting appointed Election Commission comprising following three members: Muhammad Rafique M/s. Rafique & Company Convenor; Muhammad Jahangir M/s. Al-Khursheed Shippers Jt-Convener and Abid Aslam M/s. Abid Chemical Co Member. The last date for receiving changes of names of authorised representatives in voters list, if so desired, will be Thursday (July 17, 2014) till 4:00 pm. Provisional voter list of all members eligible to vote will be displayed on Tuesday, July 22, 2014 at 10:00 am. Last date for receiving objections to the entries in the Provisional list of voters will be Saturday, August 02, 2014 till 4:00 pm. Secretary General will intimate action on the objections if any till 4:00 pm on Friday, August 08, 2014, association added.



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Company News: Pakistan

development: Lessons from the Friedrich Naumann Foundation July 11, 2014

The Friedrich Naumann Foundation (FNF) has been working in Pakistan since 1986. During these years, it has engaged different local partners in the areas of economic freedom, liberty, democracy and good governance. A few weeks ago, BR Research sat down for a chat with FNF's newest country director, Dr Almut Besold. Dr Almut is a former academic with background in Arabic, Islamic law and foreign policy of Arab countries, mainly Libya. In this interview, Almut sheds light on the history and current focus of the foundation, the foundation's philosophy to harmonise its work with local societies and letting the society to explore itself from within-and also her personal views on some of the contemporary global and local issues facing Islam. Below are edited transcripts of the interview: BR Research: Let's start with this unique German system of political foundation. How does it work? Almut Besold: It is indeed quite a unique thing all over the world. It was established after the World War II. The war made people wonder what went wrong, when in fact Germany had been a democracy since 1919. But the lesson is: any democracy without democratic citizens is bound to fail or at least to remain highly defective. This is why they came up with the idea that every party should have its own political foundation. Thereby you not only fill democracy with heart and life, but you also learn to deal with your political opponent in a peaceful way. Remember: in Berlin, we had had in 1920s and '30s Karachi-like street clashes and targeted killings of nowadays. Therefore, close to every political party in Germany is a foundation, which shares common ideas. The foundations are completely financially independent and non-partisan. The Friedrich Naumann Foundation for freedom is close to the liberal party, the Free Democratic Party. BRR: If the parties don't finance the foundations then who does? AB: The funding of the foundations depends on the election results of the party, and since the conservative party has received the highest voter share in the last elections, the conservative foundation will receive a higher amount of money than the smaller parties. The foundations are financed directly by the parliament, which is quite unique to Germany. If a party is a part of the parliament, it means it will get the funding from the parliament; the only thing that changes is the share. And that share is divided according to a formula based on election outcomes of four last periods.


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BRR: Say if a party is gradually losing presence in the parliament over the course of 3-4 elections, and, therefore, funding to its foundation is drying up, then what happens to the development work being conducted by that foundation in the recipient countries? AB: The FNF is not only working abroad but also working in Germany where it offers diverse fora, mostly for young and talented people, for exchanging information and experience in present-day contexts. Our main focus is to create a greater understanding of politics and to inspire citizens to take part in political processes. We have always seen ups and downs, gains and losses in elections in the past. But so far, none of the parties were out for three or four election periods. That never happened. On the other hand, when a party is in parliament for the first time, it does not have the four election periods either. So, then the results are interpolated. Furthermore, the parliamentary funding is not the only one admissible source. As a legally independent entity, we apply for--and receive--funds from other organisations like the European Union, too. BRR: How has been FNF's experience in Pakistan so far? AB: The foundation has been working in Pakistan since 1986. Our main focus has always been civic education, as well as economy and also human rights in recent times. Also, while renewable energy is not our main focus, we are currently organising an EU project on the same. We have had different focus areas in different eras. For instance, between 2001 and 2010, the focus was more on political reforms, where we had done a lot of work on local government bodies. We have also been collaborating with local organisations in order to educate them about the road to local bodies, how to cast the vote, how to organise themselves, how to elect their representatives, and how local bodies can help them find solution to their daily problems. We also trained the elected local body representatives. We also engaged different political parties to work towards democratic ties, and for democratic cultures. This was the main highlight of the last decade. From the context of economic liberation, we have been working with different partners, such as Economic Freedom Network and more recently with the think tank called Policy Research Institute of Market Economy. Also, Jinnah Institute and the Human Rights Commission of Pakistan (HRCP) are our important partners. BRR: What is the modus operandi of FNF? AB: Sometimes we work on capacity building but most of the time we work on consultation and providing the business community a platform to discuss and resolve their problems on their own. And, if businesses or business chambers are interested in capacity building, then we direct them towards good practices from other South Asian Chambers of Commerce and Industry. We also collaborate with public institutions, for instance we have collaborated with the Competition Commission of Pakistan. We also work towards various publications on economy and philosophy, which we publish in all major local regional languages of Pakistan, aside from Urdu. BRR: What do these publications deal with?


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AB: Well, for instance, it's common to say that religion has nothing to do with liberalism, when in fact concepts like tolerance, acceptance of pluralism, and to live in harmony are liberal values which are quite compatible with the religion. Our books discuss these ideas in a lucid fashion. Plus, you will notice that most of the publication is done by locals. The reason we stick to this policy is because we believe that the German economic experts wouldn't know as much about Pakistan's economy as would a local expert. BRR: Does this strategy using religion work? AB: I would definitely not say that we "use" religion! Our work is based on liberal values and a liberal philosophy. Therefore, it is the personal responsibility that matters. However, we often face discussions about the compatibility of religion and liberal values--not only here, but also in Germany, for instance. Interestingly, the person who named FNF was not only a politician but also a theologist. His philosophical works show that a compatibility of religion and liberal values is possible. BRR: Are you working on the right to information, since it's an important part of good governance and increasing transparency? AB: We are working on that via our partner Centre for Peace and Development Initiatives (CPDI). They are conducting workshops on good governance and right to information in Punjab and other parts of the country. These workshops engage different civil society organisations, government law departments, and the local populace on matters like how to benefit from the right to information law, and how to engage public sector institutions. But having said that, there is nothing that our foundation will do directly since that policy doesn't work; it has to come from local Pakistani civil society organisations with whom we partner. Pakistan is such a diverse country; it has all the solutions in itself. BRR: You seem to give a lot of importance on finding local solutions. Is this how FNF operates across the world? AB: Yes. For instance, take a look at our foundation's academy in Germany. What we do is that we find scholars and researchers from different countries we operate in and send them to Germany to this academy, where they have seminars on different topics. The unique thing there is that since our offices are all over the world, from Brazil to Bulgaria, to Senegal and Pakistan and India--people from all over the world meet there and exchange their views on certain topics they are concerned about. The idea is to help people find their own solution. To illustrate, these seminars participants face the same kind of problems, but they try to solve in their different contexts, while taking learning cues from other countries. BRR: What could Germany learn from Pakistan? AB: There are many things that Germans could learn from Pakistan, such as politeness, hospitality and many other things including the Pashto language, which I like very much, maybe, because it is comparatively close to the German language. My dream is that more and more German students would come to Pakistan to study and experience how life is here.


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BRR: Moving towards the ongoing crisis in the Middle East, what's your personal opinion about the way to resolve the problem of terrorism growing from Muslim countries? AB: That is a very complex question, which requires a very complex answer. First of all--terrorism is not related to Muslim countries in itself. Germany, for instance, faced big problems with the so-called Red Army Faction, a West German terrorist organisation, from the nineteen seventies to the nineteen nineties. Many countries suffer from terrorism. However, what might be sort of unique is the dimension of the terrorism that people in general think comes from Muslim countries. Regardless of military actions and secret services' plans of actions, to me, education in its broadest sense is the utmost mean to deal with terrorism no matter where it occurs. That, of course, is time-consuming. But haste makes waste. BRR: Do you think the ongoing ISIS-led crisis in Iraq-Syria has dashed all the hopes for democracy many had pinned to the Arab spring? AB: The so-called Arab spring was from the beginning overestimated in regard to democratic developments in the Arab countries. Instead of a better life, which people expected as one of the Arab spring's outcome to be, life in many countries got more difficult and especially more deadly. However, change never comes quickly and requires a lot of effort by the people. Since the more quiet times in many Arab countries are over now, people do not have a choice but have to cope with the situation. And, again, it is education, dedication and engagement that matter and that could help people to work for state structures which would provide them the possibilities to lead a prosperous, self-determined and peaceful life.



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Cotton and Textiles: Pakistan

Trading activity picks up pace on falling rates July 11, 2014

Trading activity improved on the cotton market on Thursday as mills showed interest in fresh buying due to sliding trend in rates, dealers said. The official spot rate shed more Rs 50 to Rs 6,050, they added. The prices of seed cotton in Sindh and Punjab were at Rs 3225 and Rs 3250, they said. In the ready session, about 7,000 bales of cotton changed hands between Rs 6000-6300, they said. According to the market sources, nothing was new except, fresh buying interest by mills because lower rate attracted them. Prices continued to fall in the local market partly because of persisting decline in the NY cotton futures. Cotton analyst, Naseem Usman said that in the cotton growing countries, most economies are under pressure, due to slow demand by the world. Other analysts said that the government has failed to provide gas and power supply according to their promise. Reuters adds: Cotton futures touched June 2012 lows on Wednesday as producers raced to hedge their crops as the market braced for an expected boost on Friday in the US government's outlook for 2014/15 supply prospects in the United States, the world's top exporter. The benchmark December cotton contract on ICE Futures US slipped as low as 69.50 cents before closing down 0.43 cent, or 0.6 percent, at 69.67 cents a lb. The December contract, which represents the first of the 2014/15 crop, has closed down every session since the US Agriculture Department (USDA) last week pegged 2014 US plantings at 11.37 million acres, up 9 percent from last year. The following deals were reported: 800 bales from Mirpurkhas at Rs 6000-6050, 200 bales from Hala, same figure from Golarchi at the same rate, 400 bales of cotton from Tando Mohammad Khan, 200 bales from Kotri and 400 bales from Hyderabad at the same rate, 1600 bales from Sanghar at Rs 6050-6075, 1000 bales from Shahdadpur at the same rate, 1200 bales from Tando Adam at the same rate, 400 bales from Chichawatni at Rs 6200, 200 bales from Burewala at Rs 6300 and same figure from Sahiwal done at the same rate, dealers said.

=========================================================================== The KCA Official Spot Rate for Local Dealings in Pak Rupees --------------------------------------------------------------------------- FOR BASE GRADE 3 STAPLE LENGTH 1-1/32" ---------------------------------------------------------------------------MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL =========================================================================== Rate Ex-Gin Upcountry Spot Rate Spot Rate DifferenceFor Price Ex-Karachi Ex. KHI. As Ex-Karachion 09.07.2014 =========================================================================== 37.324 Kgs 6,050 155 6,205 6,255 -50 ---------------------------------------------------------------------------


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Equivalent --------------------------------------------------------------------------- 40 Kgs 6,484 155 6,639 6,692 -53 ===========================================================================

Cotton prices continue to decline July 11, 2014

DR ZAFAR HASSAN

Throughout this week, lint prices continued to decline regularly and the cotton market is quite bearish. The ex-gin price as determined by the Karachi Cotton Association (KCA) lost Rs 300 per maund (37.32 Kgs) of grade III cotton. Last Saturday the ex-gin price of grade III cotton was Rs 6350 per maund which has been fixed at Rs 6,050 per maund on this Thursday (10 July, 2014). Ginners in Sindh claim that it costs them Rs 6,150 to produce a maund (37.32 Kgs) of cotton, where as in the Punjab the ginners reportedly claim that it costs them about Rs 6350 to produce a maund of cotton. Thus the ginners in both Sindh and Punjab claim that they are losing between Rs 100 to Rs 150 for each maund of cotton which they gin. About 35 ginning factories are now pressing the new cotton crop (August 2014 - July 2015) in Sindh, where as nearly 20 ginning factories are said to be operative in the Punjab. Domestic cotton prices are very weak where as tremendous pressure has also apparently mounted on international prices as well as on the trading prices on the New York cotton futures (ICE). Ginners are also claiming that they are obtaining low ginning out-turn (GOT) which ranged from 12.5 to 13 against the normal GOT of 14.5 to 15. The seed cotton (Kapas/Phutti) prices in both Sindh and Punjab reportedly ranged from Rs 3225 to Rs 3250 per 40 kilogrammes. Lint prices in Sindh reportedly ranged from Rs 6000 to RS.6050 per maund (37.32 Kgs), where as in the Punjab they are said to have ranged from Rs 6200 to Rs 6300 per maund on Thursday in local market. Pressure on domestic cotton prices is also being ascribed to increasing seed cotton arrivals into the ginning factories. Moreover, the spinners and the textile mills are not doing well to be able to support the market. The problems of the Pakistani textile industry are multifarious and are said to be increasing day by day, particularly in the Punjab. According to one report datelined Lahore, about two hundred member mills of the All Pakistan Textile Mills Association (APTMA) have intimated their decision to close down due to lack of supply of gas over 18 hours a day and lack of power for 14 hours daily. Consequently, it is feared that millions of workers will be rendered jobless. Already the exports of yarn and cloth have suffered a reduction of 22 and 36 percent respectively. There is also a fear that sale of seed cotton by the growers will diminish and thus the growers will not be able to make their ends meet. On the economic and financial front, major markets in the United Kingdom and in most of


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Europe are reported to have fallen on Thursday unmindful of the marginal gains which were seen in the United States on last Wednesday. Whether it was FTSE 100, the German DAX or the French CAC 40 index, all moved downwards on Thursday. Also noted by the investors were negative balance of trade figures by China besides the all round pessimistic economic data from France. Investors were mostly inclined to give sell-off instructions to their equity brokers. A major reason for the selloff on the global equity bourses was the 17 percent drop in the Portuguese Banco Espirito Santo SA shares. Espirito Santo is reported to be considering making a request for protection from its leading creditors to maintain its viability. Allegations of serious irregularities have also made against the Bank. Reports from the soft European underbelly comprising Greece, Spain, Italy and Portugal also saw its stocks prices tumble after earlier gains during the first half of this year (2014). In the United Kingdom, fears continue to persist regarding the high prices of properties which many deem to have risen to bubble building proportions. European shares prices are thus said to have been falling over the past many days. Spanish and Italian bank shares prices also tumbled pointing the biggest slump in their values since March 2014. Fears have arisen that with the overextension of the European banks in the Eurozone peripheral countries, "a credit bubble" has been formed which could conceivably frustrate any possible economic and financial stability in the region. Many Asian stock markets saw their equity values drop while the marquee Nikkei index of Japan fell for the fourth day to a fresh 10 days low on Thursday as worse than expected machinery data dampened the sentiment. Reuters reported on Thursday that the US stock index futures fell sharply following the big fall in European shares on growth concerns as well as weak data out of Italy and concern over the health of Portugal's top listed bank. Besides the serious difficulties being faced by the Espirito Santo Financial group which has largely invested in Banco Espirito Santo, it has been learnt that other banks from Italy and Spain appear vulnerable to shortage of credit and undercapitalization. The recently issued minutes of the United States Federal Reserve Bank have shown that it will end the easy money policy and its bond buying scheme and increase the rates of interest in the foreseeable future. The implication of Federal Reserve's policy decisions aforesaid presume that the United States economy is making the desired recovery and will not need prolonged help from the central bank.



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Punjab-based textile mills: Minister saves one million jobs by revising gas supply schedule, says APTMA chief July 11, 2014

Chairman APTMA Punjab S M Tanveer has said that the Federal Minister for Petroleum & Natural Resources has saved one million jobs of the Punjab-based textile industry by revising gas supply schedule to 8pm to 2am during the holy month of Ramazan. He said APTMA leadership was grateful to the Federal Minister for Petroleum & Natural Resources Shahid Khaqan Abbasi, State Minister Jam Kamal Khan, Advisor to Petroleum Minister Zahid Muzaffar, Secretary Petroleum & Natural Resources Abid Saeed, Additional Secretary Naeem Malik and MD SNGPL Arif Hameed for realising the plight of the Punjab-based textile industry and its workers with the imminent closure of mills during the Holy month of Ramadan. He said the APTMA delegation, led by the group leader Gohar Ejaz, Senior Vice Chairman APTMA Seth Akbar, Wisal Monnoo and himself had called on the Minister for Petroleum & Natural Resources in follow up of an emergent general body meeting of APTMA Punjab against the gas supply schedule of 9am to 3pm. He said the response of the government functionaries was highly encouraging and positive, as they understood the viewpoint of APTMA leadership and changed the gas supply schedule to 8:00 pm - 2:00 am daily for the textile industry Captive Power/Processing use during Ramazan. It was agreed during the meeting that the SNGPL would upload the revised gas load management schedule on its website accordingly, he added. S M Tanveer said the APTMA delegation told the federal Minister that it was unfair to lay off a large number of textile workers during Ramazan simply because of the change in gas supply schedule. The delegation further pointed out that gas supply during the day hours, in the presence of electricity supply, was useless. He said the closure of mills was also detrimental to the exports of the country, especially when Pakistan was making sincere efforts to realise full potential of the market access facility from the EU. Chairman APTMA Punjab said a prudent decision of the Federal Petroleum Minister had avoided closing down of two shifts at the mills and the revised gas supply schedule would enable the mills to continue operations for 20 hours a day in combination with the electricity supply. According to him, the affordability and availability of energy, both electricity and gas, has become a major problem for the Punjab-based textile mills as the industry cannot afford to pay additional Rs 80 billion on account of energy differential with other provinces. Already, he said, a good number of textile mills on independent feeders had been closed and another 56 mills were on the verge of it due to the electricity loadshedding. "We do hope that the Ministry for Water & Power will exempt the prime users from electricity loadshedding in the


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larger interest of textile workers and textile exports," he added. Chairman APTMA Punjab has expressed deep gratitude to the Federal Minister for Petroleum & Natural Resources Shahid Khaqan Abbasi and his team and further expressed the hope that the government would ensure uninterrupted energy supply both for the prime users as well as the captive power based mills for growth in investment, employment and exports of the country.



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Taxation: Pakistan

Revenue-generation efforts: increased share may breed complacency among provinces: SBP July 11, 2014

State Bank of Pakistan said on Friday that a substantial increase in the provincial share of federal revenues may discourage provinces to increase their own revenue generation efforts. In its third quarterly report "The State of Pakistan Economy", SBP revealed that after rising substantially in the previous year, the pace of provincial tax collection weakened in Jul-Mar FY14 and the cumulative provincial tax revenues growth fell from 90.1 percent in Jul-Mar FY13 to 24.3 percent in Jul-Mar FY14. In terms of individual provinces, tax receipts by Sindh and the Punjab posted a sharp slowdown during this period. However, collections by KPK almost doubled in Jul-Mar FY14, following the establishment of KPK Revenue Authority in August 2013. In SBP''''s view, the growth in provincial tax revenues is likely to settle down, after witnessing an initial spurt following the devolution of sales tax collection. According to SBP, the improvement in tax administration and widening the tax base, can lead to a significant increase in provincial tax receipts. In this context, a look at the details of taxable services in Sindh and the Punjab, provides some important insights: -- The rate of GST on services is 16 percent, compared to 17 percent in the rest of the country; -- The base of sales tax on services is wider in Sindh (150 services) compared to the Punjab (105 services); -- The scope of telecommunication services is much broader in Sindh, with 65 services in the tax net, compared to 29 in the Punjab; -- Services provided by the financial sector, hotels, restaurants, advertising agencies, professional and consultants, and couriers, are almost fully covered in both these provinces; According to SBP, the tax net can be enhanced by expanding the coverage to untaxed (or under-taxed) services. They could be, travel services, specialised workshops (partially covered in Sindh), cable TV operators, rent a car (taxed in Punjab), designers, auctioneers, prize bond dealers, commission agents, art painters, fumigation services, property and automobile dealers, internet cafes, coaching & training centers, corporate law and tax consultants, building maintenance and service providers, etc. "This analysis suggests there is a significant scope for widening the tax base on services for GST collection at the provincial level. In this regard, it should be noted that under the 7th NFC award,


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57.5 percent of total tax revenues are to be transferred to the provinces," the report said. Although this has been complemented by the devolution of spending responsibilities, the substantial increase in the provincial share of federal revenues, in the absence of binding fiscal targets for provincial revenue generation, may discourage them to increase their own revenue generation efforts, it added. SBP has suggested that this anomaly should be taken into account, while finalising the new NFC award with the provinces.


Power bills exceeding Rs 0.6 million: taxmen told to compile list of retailers July 11, 2014

The Federal Board of Revenue (FBR) has directed its field formation to compile a list of retailers having cumulative electricity bill exceeding Rs 0.6 million for sales tax registration; it is learnt Thursday. Sources said most of the retailers have remained beyond sales tax regime so far. Therefore, to bring retail sector into tax net, the board has ordered its field formation to compile a list of retailers having cumulative electricity bill exceeding Rs 0.6 million for sales tax registration. For this purpose, a two-tier regime for sales tax has also been introduced through a new sub-section (9) in section 3, which replaced chapter II of the Sales Tax Special Procedure Rules, 2007. According to this latest development, first tier comprises of retailers who are part of national or international chains, or are located in air-conditioned shopping malls, or have credit or debit card machines, or have cumulative electricity bill exceeding Rs 0.6 million for the past 12 months. These retailers shall be registered and pay sales tax under normal regime at standard rate of sales tax. Sources said that an incentive scheme will also be announced to encourage customers to demand proper receipts from such retailers and added that exemption threshold for retail sector has now been omitted from Table II of the Sixth Schedule. Moreover, sources said that retailers, falling in the second tier, shall pay sales tax through their electricity bills - 5 per cent on monthly electricity bill up to Rs 20 thousand and 7.5 per cent on monthly electricity bill above Rs 20 thousand. Replying to a question, sources said that field formation after finalising first tier retailers'' list is also required to ensure their sales tax registration and regular tax collection from them under normal tax regime. Furthermore, sources said the field formation in order to avoid revenue leakage in second tier of retailers was establishing co-ordination with electricity distribution companies in their respective jurisdictions to enable charging of sales tax through electricity bills at prescribed rates.



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Prime Minister may award Taxpayer Cards to top payers on July 15 July 11, 2014

Prime Minister Nawaz Sharif is expected to award Taxpayer Privilege and Honour Cards to the top taxpayers in a ceremony to be held on July 15, 2014. Sources told Business Recorder here on Thursday that the function is scheduled to be held on July 11. However, it has been rescheduled for July 15. Besides Taxpayer Privilege and Honour Cards, the government would also distribute certificates to the top taxpayers. The Board had issued separate lists of 400 top taxpayers in each category of companies, Association of Persons, salaried individuals and non-salaried individuals, to whom Taxpayer Privilege and Honour Cards would be issued. The FBR had released the names of top 100 taxpayers in each category of companies, Association of Persons and salaried individuals/non-salaried individuals after verification from the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) for issuance of Taxpayer Privilege and Honour Cards. According to the FBR, as a part of Prime Minister Tax Incentive Package, Taxpayers Privilege and Honour Card Scheme has been announced. The scheme has been notified and is available on the FBR website. Under the scheme, Privilege and Honour Cards are to be issued to 100 top taxpayers in each of the following categories: salaried individuals, non-salaried individuals, Association of Persons and companies. The holder of the card shall be entitled to and enjoy the following privileges: The facilities and privileges as provided at the VIP lounges of airports managed by Civil Aviation Authority excluding lounges managed and maintained by Airlines for their passengers; secondly, fast-track clearance at immigration counters; thirdly, issuance of gratis passport; fourthly, increase in baggage allowance from $500 to $5,000; fifthly, invitation for Annual dinner and Excellence Awards by the Prime Minister and invitation for ceremonies on March 23 and August 14. The list has been compiled on the basis of the return or statement of final taxation fully paid and no arrear or current demand is outstanding against the individual, AOP, or the company, as the case may be, unless the said demand is disputed in any court or stayed by any court.


FBR launches recovery drive against fashion designers July 11, 2014

Directorate of Intelligence and Investigation-Inland Revenue (IR), Karachi has launched recovery drive against the fashion designers, who evaded taxes concealing actual income and


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made a case of huge revenue loss against famous Karachi-based fashion designer. According to an announcement of the directorate here on Thursday, the agency is focusing on fashion industry to dig out cases of tax evasion. Under the ongoing drive, the directorate on receipt of credible information that the said fashion designer is involved in tax evasion; constituted and authorised a team of officers/officials to have access to the premises, stocks, accounts and record of the registered person under section 38 of the Sales Tax Act, 1990. The team has visited the registered person and resumed relevant record. The scrutiny of record so resumed reveals that from the period from July, 2012 to April, 2014 the fashion designer has suppressed the sales and supplies of goods to the tune of Rs 452 millions to deprive the exchequer by more than Rs 22 million on account of sales tax. Sources said that another case for recovery of income tax evaded by the said designer involving millions of rupees is still under litigation. Sources added that efforts are also being made to grab the other tax evaders of the fashion industry.



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Taxation: World

10-year tax holiday for new investors July 11, 2014

India's government on Wednesday announced a 10-year tax holiday to new investors, who begin generation, distribution and transmission of power till March 31, 2017, increased personal income tax exemption limit from Rs 2 lakh to Rs 2.5 lakh for individual taxpayers and Rs 2.5 lakh to Rs 3 lakh for senior citizens, import duty concessions for manufacturing sector, tax incentives for all kinds of bonds, raised excise duty on tobacco products by 72 percent and facility of Advance Rulings for resident taxpayers. In his budget speech (2014-15), Finance Minister Arun Jaitley also announced measures to facilitate taxpayers along with excise duty concession for local sectors. Indian authorities have enabled resident taxpayers to obtain an advance ruling in respect of their income tax liability and also enlarged the scope of the Income-tax Settlement Commission. As a measure of passenger facilitation, it is proposed to increase free baggage allowance from Rs 35,000 to Rs 45,000. To encourage exports of readymade garments it is proposed to increase the duty-free entitlement for import of trimmings, embellishments and other specified items from 3 percent to 5 percent of the value of their exports. A High Level Committee has been set-up to interact with trade and industry on a regular basis and ascertain areas where clarity in tax laws is required. Presently, tax demand of more than Rs 4 lakh crore is under dispute and in litigation before various courts and appellate authorities for which legislative and administrative changes are proposed to reduce litigation. To augment low cost long-term foreign borrowings for Indian companies, it is proposed to extend the eligible date of borrowing in foreign currency from June 30, 2016 to June 30, 2017 for a concessional tax rate of 5 percent on interest payments. It is also proposed to extend this tax incentive to all types of bonds instead of only infrastructure bonds. In order to provide incentivize to smaller entrepreneurs, it is proposed to provide investment allowance at the rate of 15 percent to a manufacturing company that invests more than Rs 25 crore in any year in new plant and machinery. This benefit will be available for three years ie for investments up to March 31, 2017. Under service tax regime, radio taxis have been brought under service tax. Bio-medical waste disposal exempted from service tax. Indian Tour Operators serving foreigners to tour outside India exempted from service tax. Service Tax for broadcast and online advertisements; print advertisements exempted. To provide a fillip to the capital goods, consumer durables and automobile sectors, and given the commitment to revive economic growth, excise duty concessions were extended beyond June 30, 2014 for a period of 6 months up to December 31, 2014. To incentivize expansion of processing capacity and domestic production, it is proposed to reduce the excise duty on specified food processing and packaging machinery from 10 percent to 6 percent. The footwear industry in


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SME sector has been given a tax relief by reducing excise duty from 12 to 6 percent on footwear of specific retail price. To develop renewable sources of energy, it is proposed to exempt from excise duty EVA sheets and solar back sheets and specified inputs used in their manufacture; solar tempered glass used in the manufacture of solar photovoltaic cells and modules; flat copper wire for the manufacture of PV ribbons for use in solar cells and modules; machinery and equipment required for setting up of a project for solar energy production; forged steel rings used in the manufacture of bearings of wind operated generators and machinery and equipment required for setting up of compressed biogas plants (Bio-CNG). In order to provide relief to small and marginal taxpayers and senior citizens, it is proposed to increase personal income tax exemption limit by `50,000 that is, from `2 lakh to `2.5 lakh in the case of individual taxpayers who are below the age of 60 years. Similarly, it is proposed to raise the exemption limit from `2.5 lakh to `3 lakh in the case of senior citizens. The concessional rate of tax at 15 percent on dividends received by Indian companies from their foreign subsidiaries has resulted in enhanced repatriation of funds from abroad. He said he proposes to continue with this concessional rate of 15 percent on foreign dividends without any sunset date. This will ensure stability of taxation policy. To facilitate manufacturing sector, it is proposed to reduce the basic customs duty (BCD) on fatty acids, crude palm stearin, RBD and other palm stearin, specified industrial grade crude oils from 7.5 percent to Nil for manufacture of soaps and oleo-chemicals; crude glycerin from 12.5 percent to 7.5 percent and crude glycerin used in the manufacture of soaps from 12.5 percent to Nil; steel grade limestone and steel grade dolomite from 5 percent to 2.5 percent; battery waste and battery scrap from 10 percent to 5 percent; coal tar pitch from 10 percent to 5 percent and specified inputs for manufacture of spandex yarn from 5 percent to Nil. In order to encourage new investment and capacity addition in the chemicals and petrochemicals sector, it is proposed to reduce the basic customs duty on reformate from 10 percent to 2.5 percent; on ethane, propane, ethylene, propylene, butadiene and ortho-xylene from 5 percent to 2.5 percent; on methyl alcohol and denatured ethyl alcohol from 7.5 percent to 5 percent; and on crude naphthalene from 10 percent to 5 percent. India has imposed basic customs duty at 10 percent on specified telecommunication products that are outside the purview of the Information Technology Agreement; exempt all inputs/components used in the manufacture of personal computers from 4 percent special additional duty (SAD); impose education cess on imported electronic products to provide a parity between domestically produced goods and imported goods and exempt 4 percent SAD on PVC sheet and ribbon used for the manufacture of smart cards. In the case of Mutual Funds, other than equity oriented funds, the capital gains arising on transfer of units held for more than a year is taxed at a concessional rate of 10% whereas direct investments in banks and other debt instruments attract a higher rate of tax. This allows a tax arbitrage opportunity. This arbitrage has hardly benefited retail investors as their percentage is very small among such Mutual Fund investors. With a view to removing this tax arbitrage, it is proposed to increase the rate of tax on long term capital gains from 10 percent to 20 percent on


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transfer of units of such funds. It is also proposed to increase the period of holding in respect of such units from 12 months to 36 months for this purpose.



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Agriculture and Allied: Pakistan

Daily trading report of PMEX July 11, 2014

On Thursday at Pakistan Mercantile Exchange (PMEX) value traded was recorded at PKR 4.187 billion as compared to PKR 3.650 billion registered on Wednesday, up 14.73 percent. Number of lots traded was 17,176 and PMEX Commodity Index closed at 3,066. Major business was contributed by gold amounting to PKR 2.305 billion, up 12 percent from PKR 2.064 billion. It was followed by crude oil amounting to PKR 1.598 billion from PKR 1.333 billion, up 20 percent. Silver was up by 12 percent to PKR 284 million from PKR 253 million.


Advisory to maize growers July 11, 2014

Punjab Agriculture Department (PAD) has advised the maize growers to complete sowing of their crop in Barani areas before start of monsoon season, so that the plants could establish their roots and take full advantage of monsoon rains. In an advisory issued here on Thursday, experts said that growers should sow approved varieties Sahiwal 2002, MMRI yellow, Pearl, Hybrid FH-810 and Yousafwala Hybrid.


Up to 80 percent price hike registered in all varieties of fruits July 11, 2014

AMJAD ALI SHAH

The sky-rocketing prices of fruits in wholesale and retail markets have pushing the buyers beyond their purchasing power, as registering an hike of 70 to 80 percent in all varieties of fruits during the first 10 days of the holy month of Ramazan. With the beginning of holy month, the vendors have increased prices of almost all varieties of fruits which are commonly used during 'Iftar' by the faithfuls, as prices continually surging up in anticipation of high demand by the buyers. Fruits are staple diet usually their demand increase in this important month, but the prices are increased suddenly and totally out of purchase of salaried and daily wage class. Fasting


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consumers are forced to settle for higher prices after a little bargaining because they didn't have stamina for protracted argument. According to survey conducted by Business Recorder here on Thursday, it was noticed that the prices of apples, mangoes, peaches, bananas and dates were registered 50 to 80 percent increase in wholesale and retail markets. The vendors and merchants are swindling faithful in the absence of official prices, as consumers are at the mercy of profiteers during the whole month of Ramazan. The fruits vendors displayed official prices list as majority they said that the government did not issue price list during the holy month, whereas government officials are not seen in the market to check overpricing. Banana is being available at Rs 100 per dozen, which was selling at Rs 50-60 per dozen before the start of the holy month. Similarly, Mango is being sold at Rs 100/kg against Rs 80/kg. The price of grapes also increased manifold as available at Rs 200-250 per/kg, while apricot is being soled at Rs 200 and Rs 150 against Rs 100/kg. Peach is being sold at Rs 80 against Rs 60/kg, while banana is available at Rs 100-80 per/dozen against Rs 40 and Rs 50 per/dozen. Muskmelon is being sold at Rs 50/kg, watermelon is being available at Rs 80/piece. The buyers complained that the due to unchecked of prices of fruits and other essential commodities in the holy month, the prices are going up by each passing day. They said that vendors are squeezing them with high rates all varieties of fruits, including melon, banana, watermelon, apple, and grape. The arbitrary hike in prices of essential commodities and fruits had totally unjust with them, said Ibrahim Khan, a buyer, while purchasing mangoes at a pushcart. He added that the vendors recover profit of entire 11 months in just one month. "Is it possible for a salaried class and poor daily wage earner enjoy this luxury in the holy month," Zile Humma, a housewife while purchasing fruit items. She demanded the city district government to issue proper price list and take action against the profiteers, who are swindling faithful with high prices in the holy month. Khalid Khan, a fruit wholesaler at Hashtnagri market said, the quantity of fruits he used to supply to the retailers has gone up by 35 to 45 percent. "Fortunately this year, the production of apples is not very good in Swat, from where we get our stock. Despite huge supply of apples of two qualities, he said prices are registered high with advent of season, and he further said most of fruit items are exported to neighbouring Afghanistan, which causes high prices in the local market. Though, he said, there was a good supply complimented by a good demand, still the prices are rising with every passing day due to expenses, taxes and other transportation charges. He blamed retailers for charging exorbitant rates of fruits from helpless consumer, which is left at the mercy of profiteers in the absence of any mechanism by the concerned department of the City District Government Peshawar to check unlawful activities of such elements.



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Fuel and Energy: Pakistan

BoM of PSO re-constituted July 11, 2014

The Ministry of Petroleum and Natural Resources (MoP&NR) has re-constituted the Board of Management (BoM) of Pakistan State Oil (PSO), while dissolving the previous board over poor performance, it is learnt. Well-placed sources in the Ministry of Petroleum revealed that a summary was sent to the Prime Minister office, which was approved on July 8 and now the new BoM of PSO has been notified with Mujahid Eshai as the current Chairman. Sources said that a summary sent to the Prime Minister office for reconstitution of the BoM included 10 names, ie Mujahid Eshai, Naeem Malik, Additional Secretary Petroleum, Amjad Parvez Janjua, Managing Director PSO, Shahzad Saleem, Umar Dawood Pota, Saleem Ansari, Bilal Shafi, Shahid Islam, Adil Rauaf and Hussain Islam. The Prime Minister and the Petroleum Ministry high-ups were not satisfied with the performance of the PSO BoM, which was appointed by former Prime Minister Yousaf Raza Gillani. However, the officials said that removal of the Director General (DG) Oil from Board of Management is quite surprising as he was one of the most senior officials of the Petroleum Ministry dealing with the imports, exports, price calculation and other relevant developments in Board of Management. According to officials, the decision of the Ministry would have negative impact on the matters related to petroleum product import, supply and demand situation as the DG Oil plays a key role in making all decisions regarding the demand and supply of the petroleum products. Following members of PSO BoM have been removed: DG Oil Azam Khan, Mirza Ikhtiyar Baig, Raja Hameed Ahmed Saleem, and Ahsan Bashir. The government has decided to change all the private members of the PSO Board of Management.


Qatargas LNG price: Ministry urges ECC to form negotiation committee July 11, 2014

ZAHEER ABBASI

The Ministry of Petroleum and Natural Resources has reportedly requested the Economic Co-ordination Committee (ECC) of the Cabinet to constitute a price negotiation committee to negotiate the LNG price and other important aspects with Qatargas. Sources told Business Recorder that the proposal submitted by the Ministry to the last ECC meeting presided over by Finance Minister Ishaq Dar was deferred subsequent to different viewpoints on the issue by various ministries and divisions.


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The composition of the committee proposed by the ministry included; Secretary Petroleum and Natural Resources as Chairman of the Committee and Chairman Board of Investment (BoI), Secretary Finance, Secretary Law Secretary, Secretary Water & Power or his nominee as well as Managing Director Pakistan State Oil, Managing Director Sui Southern Gas Company Limited (SSGCL) and Managing Director Inter-State Gas System Limited (ISGSL) as members of the committee. Ministry stated that subsequent to ECC approval, SSGC and Engro Elengy Terminal (Pvt) Limited (EETPL) have executed an LNG Services Agreement (LSA) for provision of LNG receiving, storage and re-gasification services under a tolling fee arrangement. The EETPL have also executed an implementation agreement with Port Qasim Authority dated 23-06-2014 to develop and operate LNG Terminal at Port Qasim. Pakistan State Oil Company Limited (PSOCL) and Qatargas Operating Company Limited (QOCL) have been nominated by respective governments to negotiate draft Heads of Agreement (HOA) for import of LNG. This Ministry has constituted a team comprising PSO, SNGPL, SSGCL and ISGSL to negotiate the technical and operational aspects of head of agreement. Initial discussions have been held with the Qatargas, however, the LNG price would be negotiated after finalising operational and commercial terms. In parallel, bidding process for import of LNG has also been initiated and EOI has already been advertised on 30-05-2014 in the national and international press. Being a capital intensive project of national importance, which may also require sovereign guarantees, the Ministry proposes that a price negotiation committee may be constituted to negotiate the LNG pricing and other important aspects with Qatargas. The LNG price negotiation committee will; (i) negotiate the LNG price formula payable for the LNG to be supplied by Qatargas under the Sale Purchase Agreement (SPA) as a single source supplier on the basis of Government to Government commitments: (ii) to negotiate bench marking criterion, price review triggers price review mechanism and payment mechanism. Review price trends in the international market and the region, comparison of LNG price with other alternate fuels available for supply and technical suitability: (iii) to provide general guidance in connection with negotiation of the SPA, and such other related matters for which it may be mandated to the Committee by the GoP: (iv) the LNG Price Negotiation Committee will also advice on the following matters: (a) provision of advice and guidance regarding the policy issues concerning commercial terms of the SPA and its consistency with Government to Government arrangements: (b) period of SPA/contract: (c) identification of the preferred pricing mechanism after due consideration of specific mechanisms proposed and finalised with QOCL: (d) review of the draft SPA and its submission to the competent forums for its approval: (e) recommending requisite approvals and consents and authorisations from relevant authorities. The Committee will meet on a regular basis as and when required. Special meetings may be held at the request of any member of the Committee. The Committee will also be assisted by the LNG consultants being engaged for the purpose to assist and provide professional support in general and particularly with reference to benchmarking criterion, Price Formula, Price review mechanism, Price review triggers, price trends in the international market and region, comparison of price with other alternate fuels etc and technical suitability.



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Mari Gas MD lauded for investment: government channelling more resources to discover new oil fields: Dar July 11, 2014

Minister for Finance Ishaq Dar on Thursday said the government was looking forward into channelling more and more resources for discovering new oil fields in the country since it was bestowed with valuable natural resources. "It is always my belief that Pakistan is rich with minerals and natural resources and we need to restructure our priorities and focus more on providing facilities to exploration companies," Ishaq Dar said in a meeting with Managing Director, Mari Gas Limited, General Nadeem Ahmad (Retd) who called on him here on Thursday. The Finance Minister said successful companies did adopt market based business model and protect rights of the shareholders in order to achieve success. He appreciated the desire of the company to invest more funds into exploration side. Managing Director Mari Gas briefed the Finance Minister on the working model, operational capacity and level of efficiency of Mari Gas, now changed to Mari Petroleum, as the Organisation had ventured into petroleum business. The MD said the well success ratio of Mari Petroleum in its hydrocarbon exploration had been 1:1.4 which was extremely optimistic. He said the success ratio of other international companies in Pakistan was 1:3.3 and it was almost 1:7 around the world.


Loadshedding hours: power ministry fails to bring improvement July 11, 2014

MUSHTAQ GHUMMAN

The Ministry of Water and Power has failed to bring improvement in load shedding hours and just paying lip service and wasting the exchequer on lavish meetings at Iftars and Sehris. Well-informed sources told Business Recorder that millions of rupees from national exchequer are being spent on meetings of officials at Iftars and Sehris in the Ministry of Water and Power and offices of Chief Executive Officers (CEOs) of Discos. Recently, Secretary Water and Power, Mrs Nargis Sethi had directed all the deputy secretaries and section officers to ensure their presence for the video conferencing to be held in the committee room of Ministry of Water and Power everyday at Sehri from 2.00 am and in Iftar from 6:30 pm to 8 pm.


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The sources said electricity shortfall is around 7,000 MW as is evident from load shedding hours but the Ministry and the National Transmission and Dispatch Company (NTDC) insists on shortfall of 3,000-3,500 MW which is far from reality. People who are facing sever load shedding in scorching heat in Ramazan are being forced to take refuge in canals water. According to sources access to National Power Control Centre's board which gives details of Disco-wise demand and supply position has only been given to a few top officials so that the actual shortfall is not disclosed. National Transmission and Dispatch Company (NTDC) which is responsible to disseminate information regarding power generation, demand and load-shedding hours is completely silent. Officials in Gencos and Discos are of the view that they are facing hard times as the incumbent secretary takes on them off and on. Secretary Water and Power, Nargis Sethi who is about to retire in just six months after reaching the age of superannuation, is just focusing on 'fire fighting' instead of much needed viable policies. At a recent meeting of National Assembly Standing Committee on Water and Power, she revealed that Pakistan's power sector cannot endure more than 15,000 MW load. However, she sought a few months time to prepare a plan to improve the system. Insiders raise the question that where the billions of dollars taken from the World Bank and the Asian Development (ADB) in the name of system improvement have gone?


Blocking Nepra's pro-consumers decision: K-Electric accused of seeking stay order July 11, 2014

MUHAMMAD SHAFA

The K-Electric has been resorting to litigation to get stay orders against the National Electric Power Regulatory Authority's (Nepra) pro-consumers decisions since 2010, K-Electric consumers complained. Sources said that Nepra had been taking decisions over the complaints made by different consumers regarding electricity issues against K-Electric time to time, but the power utility instead of implementing the decisions of Nepra in letter and spirit, either defied them or approached higher courts 'unnecessarily' to get stay orders against the regulator's decisions. They said that this practice of the power utility was creating sense of deprivation among the consumers. Elaborating the issue they said that a corrigendum had been issued by Nepra in 2010 regarding Rs 5 billion subsidies received by the KESC (now K-Electric) from federal government but not passed it on to the consumers. The matter was detected by the audit department of the regulatory authority. However, the power utility moved to court against the corrigendum by filing a suit No-556/14 in Sindh High Court (SHC) and obtain an stay order on the plea that no show cause notice was issued by the Nepra before issuing the corrigendum. They said in the same way, the power utility also moved to the court over t issuing wrong and


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manipulated bills to the consumers. Certain associations of Karachi had approached Nepra over the issue, referring to the e-mail issued by Shoaib Siddiqui, Deputy General Manager (DGM) of K-Electric, wherein he had instructed his subordinates to issue excessive bills to consumers. "Shoaib Siddiqui admitted this before Nepra's hearing on November 18, 2013," they added. Nepra, after enquires, concluded that K-Electric's top management was involved in instructing the subordinate officers to issue inflated bills to the consumers in order to increase the revenue and balance the theft of electricity. Finally the regulatory body issued a show cause notice to K-Electric's management for the imposition of a penalty of Rs 100 million for doing this illegal act and also hiding the facts from Nepra. The regulatory body had served a show cause notice on K-Electric through a letter No-NEPRA/R/TCD.09/2387 dated 12-3-2014 which states: "You are hereby served a show cause notice under Rule 4(8) and (9) of Nepra (fines) rules, 2002 to show cause as to why not a fine up to Rupees One Hundred Million (Rs 100, 000,000/-) be imposed upon you." Meanwhile, K-Electric management filed a civil suit No-486/14 in SHC against Nepra and again obtained stay order. The regulatory body in the meantime finalised the inquiry and then ordered the power utility to take actions against its 15 senior officers for their involvement in issuing inflated bills to the consumers. But the K-Electric again approached SHC and filed a constitutional petition N0-2883/14 against the regulatory body, alleging that Nepra is harassing them and not allowing them to avail the legal right of doing fair business. Sources said that the cases and petitions would come up for hearing before an SHC bench on July 15. Similarly, the power utility in defiance of Nepra's orders is still charging extra Rs 8 for its consumers on account of bank charges. The Nepra through a letter No-Nepra/R//TCD.09/1213-14 written to Chief Executive Officer (CEO) KESC stated: "KESC is hereby directed to stop collecting additional Bill Collection Charges at the rate of Rs 8 form its consumers till decision on the case by the authority." The K-Electric's consumers are of the view that stay orders issued by the SHC against the Nepra's pro-consumers decision are actually affecting the 2.2 million consumers. Sources in K-Electric consumer forum said that they would approach SHC pleading it to vacate the stay orders and let the consumers' representatives to become a party in the court proceedings in these matters.


Increasing power generation July 11, 2014

MUSHTAQ GHUMMAN

The Indian government led by Prime Minister, Narendra Modi has announced a number of measures to increase power generation especially on promotion of clean energy in the country. Indian Finance Minister Arun Jaitley in his budget speech unveiled a new energy strategy which includes schemes such as setting up ultra mega solar power projects, developing solar parks on


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canal banks, constructing transmission corridors for renewable energy and energising 100,000 solar power-driven agricultural pump sets and water pumping stations. India's capacity addition for the 12th Plan period is estimated at 88537 MW. Against this target 38583 MW capacity has been added till April 2014 which constitutes 43.6 per cent of the target envisaged in the plan. To encourage setting up of clean energy projects, the Indian Finance Minister announced that the BJP government would extend excise duty exemptions for raw materials for solar and wind power projects. The government also proposed to take up ultra mega solar power projects in Rajasthan, Gujarat, Tamil Nadu, and Ladakh in the held J&K. Indian Finance Minister announced in his speech that developing renewable energy will also help reduce dependence on coal, which is in short supply domestically, requiring imports of the mineral to fuel most of India's power plants. India has a power generation capacity of 245,394 megawatts (MW), of which only 13%, or 31,692MW, is contributed by renewable sources. India has also increased the quantum of clean energy cess which is currently levied on coal, peat and lignite from Rs 50 per ton to Rs 100 per ton and expanded the scope of its usage to include financing and promoting clean environment initiatives and funding research in the area of clean environment. To develop renewable sources of energy, India will exempt from excise duty: (i) EVA sheets and solar back sheets and specified inputs used in their manufacture; (ii) solar tempered glass used in the manufacture of solar photovoltaic cells and modules; (iii) flat copper wire for the manufacture of PV ribbons for use in solar cells and modules; (iv) machinery and equipment required for setting up of a project for solar energy production; (v) forged steel rings used in the manufacture of bearings of wind operated generators; and ;(vii) machinery and equipment required for setting up of compressed biogas plants (Bio-CNG). The new Indian government, in its party manifesto had made energy security a part of its poll plank. India, which is dependent on imports to meet its energy demand, has an energy import bill of around $150 billion which is expected to reach $300 billion by 2030. In addition, the budget provided a concessional basic customs duty of 5% on equipment for setting up compressed biogas plants. The Indian Finance Minister maintained that supply of power continues to be a major area of concern for the country. Therefore, instead of annual extensions, he proposed to extend 10 year tax holiday to the undertakings which begin generation, distribution and transmission of power by March 31, 2017. He hoped that the stability in policy will help the investors to plan their investments better. To promote wind energy, India announced reducing basic customs duty from 10 percent to 5 percent on forged steel rings used in the manufacture of bearings of wind operated electricity generators.



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Fuel and Energy: World

Oil slips on slack US demand, improving supply outlook July 11, 2014

Oil fell towards $108 a barrel on Thursday, extending its longest losing streak in four years, pressured by the prospect of solid global supply and weak gasoline demand in the United States. Brent and US crude oil futures continued their downward trend that begun about a fortnight ago, as easing geopolitical tension in Iraq and Libya decreased the risk premium from previous weeks. "The rally of the previous weeks was all on anticipation that there was going to be supply disruptions," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut. "You still continue to see some liquidation selling because of evaporating geopolitical risk, but the market is now starting to stabilise." Brent crude fell 19 cents to $108.09 a barrel by 11:43 am EDT (1543 GMT), down for a ninth session and matching a similar run in May 2010. It hit a low of $107.76 earlier, the weakest price since May 9. US crude fell for a 10th session to $102.10 a barrel, down 19 cents and was set to post its longest stretch of losses since July 1984. The two benchmarks had climbed to a nine-month high of 115.71 for Brent and 107.26 for US crude last month, as an Islamist insurgency in Iraq raised the spectre of oil disruptions from Opec's second-largest producer. Concerns over oil shortages from Iraq have since eased, as fighting between Sunni militants and government forces has spared exports from southern oil terminals. Meanwhile, Libya's output has risen to 350,000 barrels per day due to an increase in production from the El Sharara field, where a protest ended earlier this month. "It's a combination of profit-taking, the Libya effect and I would say a slight reduction in the risk premium regarding the Iraq situation," said Hans van Cleef, a senior energy economist at ABN Amro in Amsterdam. While Libya's oil industry hopes life will return to normal, experts say it will take months to ramp up production and more unrest is in prospect as political chaos spreads. Fuel demand in the United States has been a let-down despite a gradual recovery in the world's largest economy, according to government data. Gasoline demand over the past four weeks was at 9.04 million bpd, down 0.4 percent from a year earlier, data from the Energy Information Administration showed on Wednesday. "We expect gasoline demand to pick up, but so far it has not surpassed late-May or early-June levels," Societe Generale's Michael Wittner said in a note. However, China, the world's second-largest oil consumer, posted a 10.2 percent rise in crude imports in the first six months, customs data showed. Analysts attributed the jump in imports to stockpiling.

Copyright Reuters, 2014


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Oil demand to grow further: Opec July 11, 2014

Global world oil demand is due to increase further next year thanks in part to resurgent growth in developed countries, Opec said Thursday in its first forecast for 2015. The Organisation for Petroleum Exporting Countries, which pumps a third of the world's crude, predicted demand would top 92.35 million barrels per day (mbpd), up 1.33 percent from 2014. The growth is due to a recovery in demand for the first time since 2010 among advanced economies in the OECD region, particularly in the United States, Opec said in its monthly report. The bulk of the demand will come as per usual from non-OECD countries however, especially China and the Middle East. Still, Opec sounded a word of warning, saying that the development and use of alternative sources of fuel, could cut into its 2015 forecast.



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Banking & Finance

SBP to announce monetary policy on July 19 Thursday, 10 July 2014 18:23

Posted by Imaduddin

ISLAMABAD: The State Bank of Pakistan issued a notification on Thursday that it will announce its monetary policy on July 19, a week later than previously announced.

According to the notification, the SBP bank official said that Governor SBP will announce the monetary policy through a press conference in Karachi.

Earlier, the State Bank had announced that the governor will hold a press conference in Lahore on July 12 to unveil the monetary policy.

The central bank did not give any reason for change in plans.

Copyright APP (Associated Press of Pakistan), 2014

Workers’ remittances rise by 13.72pc to $15.83bn in FY14 Thursday, 10 July 2014 18:21

Posted by Imaduddin

KARACHI: Overseas Pakistani workers remitted an amount of dollars 15,832.25 million during the last fiscal year ; showing growth of 13.72 percent compared with $ 13,921.66 million received the financial year 2012-13.

The inflow of remittances, over last fiscal year, from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman), and EU countries amounted to $4,729.38 million, $3,109.43 million, $2,464.14 million, $2,180.14 million, $1,860.03 million and $431.79 million respectively as compared with the inflow of $4,104.73 million, $ 2,750.17 million, $ 2,186.24 million, $ 1,946.01 million, $ 1,607.88 million and $ 357.37 million respectively during FY13.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during FY14 amounted to $1,057.34 million as against $ 969.16 million received during last fiscal year. In June 2014, the inflow of remittances from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman), and EU countries amounted to $ 471.88 million, $295.63 million, $222.34 million, $200.82 million, $168.62 million and $37.42 million


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respectively as compared with the inflow of $353.18 million, $218.60 million, $179.96 million, $171.94 million, $138.18 million and $31.03 million respectively in June, 2013. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during FY14 amounted to $102.57 million.

Copyright APP (Associated Press of Pakistan), 2014


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BR Research: All

Whats brewing at Mari? July 11, 2014

BR Research

Take a good look at the chart. Had it been Pakistan Petroleum Limited or Oil and Gas Development Company, it wouldn be as surprising in the backdrop of the privatisation stories, but it is rather the oft ignored Mari Petroleum Company Limited (MPCL) that has stolen the spotlight this time. The last four months have been ecstatic for MPCLs share price, which has beaten both the broader index and its fellow E&P companies by a hefty margin. Maris share price has almost doubled since March. And it has taken more than a name change of the company for the share prices to go loco. The most recent burst of delight to Mari comes from the move to change the pricing formula. The willingness of the government to offer MPCL increased pricing can be seen from the Ministry of Finances press release where Finance Minister Ishaq Dar seems to be appreciating the companys move to adopt the market based business model and the desire to invest more on the exploration side. Let it be known that MPCLs cost plus formula is an anomaly in the oil and gas E&P sector under which company gets a gas price of $0.73 per mmbtu with state financing of Rs20 million for exploration expenditure. The company has been urging the government since May 2014 to switch the cost plus formula with a more market based approach followed by other E&P companies. The company was seeking switching from 73 cents per mmbtu to 2001 or 2012 Petroleum Policies, which translates to around $2 and $6 per mmbtu prices, respectively. The government has now agreed to a price of $2.15 per mmbtu under the Petroleum Policy 2001, which will be a boon for the firm as it is still much higher than the prevailing prices. The second and equally important factor in driving up the companys share price has been its recent discoveries. Both the oil and gas discoveries have been significant in terms of reserve size, their location in some of the untapped areas of the country, and their spillover effects of increased E&P activity in these prospective areas. In May 2014, MPCL spotted gas and condensate reserves of around 20bcf in Sujawal district of Sindh with flow rates of around 13 mmcfd and 75 bpd, respectively. In June 2014, the firm also discovered huge oil reserves in Sohawa district, near Jehlum, Punjab. With 22 million barrels reserves, the new field is likely to produce around 5,500 barrels of oil per day. So, it is really more than just a name change; the firm enjoys better-than-average well success ratio in hydrocarbon exploration versus the international and the local E&P players. And together


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with a successful move to a market based pricing model, MPCL can unravel new growth drivers in future. The stock is currently priced around Rs389 in the market, with one brokerage house (Ismail Iqbal Securities)--yes only one brokerage house-projecting a fair value of Rs700 plus. For a stock making such ripples, its unfortunate that none of the leading brokerage houses have any valuation calls on the MPCL. This kind of lazy broking might leave a few fingers burnt.

Key takeaways from SBPs third quarter report July 11, 2014

BR Research

The central banks third quarterly report for FY14 is out, and their headline is that Pakistans economy "appears" to have turned a corner during the third quarter of FY14, and sentiments about the economy "seem" to have improved. Do these inverted commas reflect typical central bankers speech, or is it that the SBP is sitting on a fence. One may never know the answer to that question, for its always debatable as to what the SBP might actually be thinking. But, here are a few of its relatively concrete observations. "It must be said that these signs of improvements should not discount the challenges faced by the economy; and efforts for much needed structural reforms should continue," the SBP said. On the subject of LSM growth, the SBP echoed what this column had earlier opined (See BR Research column: The LSM mystery June 12, 2014) that it simply isn broad based. "This uneven growth can be traced to structural imbalances that need to be addressed," the report said, while casting doubts over the ability to achieve full-year LSM growth of 5.3 percent estimated by the government. The SBP says that total public debt (external plus domestic) has already crossed the limit of 60 percent of GDP, set by the Fiscal Responsibility and Debt Limitation Act (2005) for FY13 onward. "Hence, any addition to the external debt should at least be matched with an equivalent reduction in the domestic debt outstanding." In perhaps one of its most vocal statements, the SBP has shown serious concern over corruption in public spending. "The importance given to transport and construction at the provincial level is also intriguing. While the differences in sub-national development priorities can be attributed to individual provincial needs, a review of literature on the determinants of public spending provides another perspective," the SBP said. Citing a set of multi-year academic studies from across the world, the SBP said that the composition of government spending is often shaped by the degree of inefficiencies and wastages of financial resources in a country. The types of government expenditure that creates opportunities for bribe taking and other types of rent seeking behaviour are often prioritized when governance is poor. "As a result, investments in huge projects (buildings, highways,


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airports, etc.) attract more public funds compared to social sector." One study cited by the SBP proves that corruption plays an important role in distributing government spending between various sectors. "Specifically, it (corruption) favours spending on defense, fuel, public services, law and order at the cost of spending on social sector." This thesis surely seems familiar to Pakistan. But, interestingly, going by this thesis, KPK and Punjab are competing head to head on possible corruption in government spending, whereas the oft blamed Sindh is faring better (see graph). While SBPs third quarterly report talks about how rupees appreciation might affect remittances (See coming Mondays columns for detailed commentary), it fails to delve into on how rupee appreciation would impact Pakistans trade balance going forward. The only thing the report said on the subject is that a part of the loss of competitiveness "could be offset by the availability of cheaper imported inputs, which most Pakistani exporters are dependent upon". For a subject so complex and hotly debated in political and economic circles, one would expect the SBP to shed more light on it than just two lines.

Milk it! July 11, 2014

BR Research

For years weve been told, drinking milk is good for you, which we did or, insolently, didn , end of story. But milk consumption is on the rise. According to The Global UHT Milk Market report by Transparency Market Research, the global Ultra High Temperature (UHT) milk market was assessed at $60.8 billion in 2012. It is projected to expand at a CAGR of 12.8 percent from 2013 to 2019, to achieve an estimated value of $137.7 billion in 2019. Milk is one food item which finds its consumption daily in every household, but requires apposite preservation. UHT milk helps the consumers to store it for a long time. Hence, the growing apartment culture coupled with less refrigeration space is driving the UHT milk market globally. Despite consumers plagued by flogging economy, security issues and rising inflation, consumer spending in Pakistan, as per Euro-monitor International, has risen at an average rate of 9.4 percent in the last three years, as against 4.3 percent for the Asia-Pacific region. Thus, 180 million population bulges an emerging middle class, and rising rural propensity is becoming the epicenter of FMCGs in Pakistan. To cater to the worlds sixth-largest population, Nestlé Pakistan and Engro Foods have established many milk production plants. The duo has almost captured most of the UHT milk market in Pakistan, selling an array of UHT milk products and now dwelling into dry milk production. In addition, many powerful politicians such as Jahangir Tareen and Hamza Shahbaz have set up


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milk production facilities. Mian Mansha and Fauji Foundation are also pursuing to enter the market dominated by Nestle and Engro. A BR Genie tells us that Tapal is deciding to enter the dairy business as well. Milk production in Pakistan grew by 3.22 percent year on year in FY14, in accordance with milk consumption of 3.21 percent year on year. Although Pakistan is the worlds fourth-largest milk producer, yet it is placed lowermost between the 20 biggest milk-producing countries for the quantity of milk that arrives at the processing companies, according to Kiel, a Germany-based dairy research firm. Moreover, regardless of millions of animals, the average milk production is drab compared to India due to viral diseases considerably threatening livestock, culminating in inferior milk. The state-of-the-art dairy farms churned out 8,000 liters of milk per animal on yearly basis whereas the average production for sub-standard farms remained about 3,000 liters. In addition, poor cold chain storage infrastructure is further hampering quality of the milk. In a country where numerous disorganized small dairy farmers supply raw cow and buffalo milk to households. UHT milk sector has a huge potential to grow as rising income levels along with growing influence of Western culture is likely to sublime this restraint to considerable extent in the near future.

Stirring start-ups July 11, 2014

BR Research

Pakistan remains a lucrative market for start-ups, according to the recently launched World Start-ups Report (WSR). In an attempt to promote local start-ups, the WSR documents the worlds start-up ecosystem, detailing on the local culture, key players, challenges and opportunities. The report highlights that with no limit on equity (allowing investors to hold 100 percent in a company and with no local partner), and 100 percent repatriation of capital, Pakistan offers one of the most liberal investment policies in the region. Experts have long highlighted that Pakistan carries enormous potential to reap demographic dividends owing to its demographic structure, with over 50 percent of the population between the ages of 15 and 45. However, the country also offers lucrative markets for investors in terms of being the fourth largest middle class population in developing Asia. Even within the country, too, this effect has historically been clearly evident in the case of Karachi, which continues to hold investor attention despite continued deterioration in law and order over the years. Moreover, for start-up opportunities, internet penetration is one of the highest in the region and will be boosted further with the advent of 3G/4G in the country. "Foreign firms are rushing into Pakistan to compete in some of the most easily monetizable parts of the web," says Steven Millward, Editor TechinAsia.


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More interestingly, WSRs commodity innovation map for Pakistan suggests potentially rewarding avenues for start-ups, including music-streaming, travels and tours, finance, and domestic transport. Local entrepreneurs are encouraged to seek advice from incubators such as Plan9, The Foundation, and Invest2Innovate, to also participate in start-up competitions. On the other hand, foreign investors should take immediate note of opportunities in Pakistan before local markets get more saturated. Start-ups provide an excellent route to economic prosperity and development. While a number of start-ups have gained traction in the country over the years, government initiatives towards facilitation and support need to be acknowledged as well. These include support for incubators such as Plan9 and initiatives in the fields of e-governance being spearheaded by the Punjab IT Board. This is a welcome sign on part of the Punjab government; in the post-18th Amendment scenario, other provinces should also step up their efforts in this area. For a detailed discussion on start-ups, follow our Brief Recording section on Monday where we interview Khurram Zafar, Executive Director of LUMS Centre for Entrepreneurship.


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Crime Records

Law & order: chief minister asked why he keeps changing IGs July 11, 2014

Prime Minister Nawaz Sharif on Thursday expressed his displeasure over the performance of Sindh Government towards maintenance of law and order situation of the provincial capital, Karachi. The Prime Minister underscored the need for devising a joint action plan with the co-operation of law enforcement institutions, Interior Ministry and Sindh Government. He was chairing a high-level level meeting which focused on Karachi's law and order situation at Sindh Governor's House. It was attended by Interior Minister, Chaudhry Nisar Ali Khan, Information Minister Pervaiz Rasheed, Chief Minister Qaim Ali Shah, provincial Information Minister Sharjeel Memon, and other dignitaries. DG Rangers Major General Rizwan Akhtar, Acting IG Sindh Ghulam Haider Jamali and Corps Commander Karachi were also present. On the repeated change of IG Police Sindh, the Prime Minister asked the Chief Minister: "Shah sahib how can you expect to get the desired results if you would keep changing the captain of the team?" "You even transferred the services of IG Sindh to the Federation," the Premier protested. The Chief Secretary on the occasion told the meeting that 7000 policemen had been recruited whose training was under way. He said the targeted operation in Karachi was heading in the right direction and that sensitive areas had been identified following an attack on the Karachi airport. The work on erection of walls around the sensitive national installations was also under way, he added. Nawaz Sharif has directed for carrying out targeted raids with focus on attacking the hideouts of the terrorists. The Corps Commander Karachi assured that the army would extend its co-operation towards maintaining law and order in the provincial capital. Later, Prime Minister, Nawaz Sharif heard the grievances of Karachi's business and trade community at a separate meeting. The city's businessmen and traders said that Karachi's police had failed to provide security to people. They said criminals brazenly extorted money from them using EasyPaisa service while 17 businessmen had been kidnapped for ransom since June 1. They said the police and law enforcing agencies had black sheep in their ranks which must be exposed and thrown out. They demanded that the Rangers Task Force be granted powers. The Prime Minister told them that their grievances would be effectively addressed. He, however, complained that no businessman came forward for the help of Internally Displaced Persons (IDPs).

Copyright News Network International, 2014


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US drone kills six amid anti-Taliban offensive July 11, 2014

Military says its anti-militant offensive in a north-western tribal area has now taken control of 80 percent of a strategic town, as a US drone strike on Thursday killed six suspected insurgents. The armed forces have been waging a long-awaited assault on North Waziristan for the past three and a half weeks to eradicate hideouts militants have used to launch attacks across the restive nuclear-armed country. The army says it has retaken most of Miranshah, the main town of North Waziristan which had been under effective militant control for years. Journalists including AFP reporters were taken on a rare trip to Miranshah on Wednesday to see the aftermath of the operation, which began on June 15 with air strikes and artillery bombardment and continued with nine days of ground assault. The once-bustling town is now virtually deserted, the rubble of countless bombed-out buildings strewn across the dusty streets. Apart from soldiers, only dogs and donkeys roam the ruins, picking through the wreckage for scraps of food. "It's about 80 percent clear from the terrorists but it's still not clear of IEDs (improvised explosive devices) - it will take more time for combat engineers to clear the IEDs," General Zafarullah Khan told AFP in Miranshah. Major General Asim Bajwa, the head of the military's media wing, said that before the onslaught the town become a virtual supermarket for jihadist fighters wanting to equip themselves with guns and explosives. "This looked like a terrorist economy, a whole chain of things being sold in the city," Bajwa told AFP. "You could find a shop selling IEDs, another shop selling fuses, and a third selling cords and detonators." Soldiers showed journalists what they described as a "suicide bomber training centre" complete with explosive vests lined up against the walls. In all, the army said they had recovered 23 tonnes of explosive material in Miranshah, including IEDs, mines and rocket-propelled grenades. DRONE STRIKE Adding to the pressure on militants, two US drones fired four missiles into a compound in Doga Macha Madda Khel, a village close to Datta Khel town, local security officials said. The village lies 35 kilometres (22 miles) west of Miranshah. A local security official told AFP that Thursday's drone strike had killed four foreign fighters and two local cadres who had fled Miranshah before the launch of the offensive. "The compound and a vehicle parked inside were completely destroyed and killed at least six militants," the official told AFP. Doga Macha Madda lies in difficult, mountainous terrain which the official said the militants had hoped to use as cover. Another security official in the north-western city of Peshawar, confirmed the attack and the casualties. It is the third round of drone strikes to hit north-west Pakistan since the US resumed the campaign following a six-month hiatus. Washington reportedly suspended its drone programme in December to give Islamabad time to pursue a dialogue process with the Pakistani Tehreek-e-Taliban (TTP) aimed at ending a seven-


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year insurgency that has claimed thousands of lives. But a spectacular, bloody attack on Karachi airport on June 9 that left dozens dead sank the peace efforts and prompted the army offensive. US drone strikes resumed a few days after the Karachi attack, though Pakistani officials insist they have not given their approval. LINGERING DOUBTS The army says it has killed 400 insurgents in the course of the operation, but with media access to the area impossible without military approval it is impossible to verify the number or identity of the dead. Resistance to the army advance has been scant, leading many to suspect that the majority of militants have fled, undermining the effectiveness of the operation.


Three Lyari gangsters killed in 2 encounters By Our Correspondent

Published: July 11, 2014

KARACHI: Three alleged gang members of Lyari were killed in two separate encounters with the police and Rangers in Lyari and Old City areas on Thursday.

The two gang members of the Sheraz Comrade group of the Lyari gangsters were killed during a joint raid conducted by the police and Rangers in the Saifi Lane area of Baghdadi, Lyari. The gangsters killed in an encounter were later identified as 30-year-old Majeed aka Steel, and 28-year-old Akhtar.

SHO Khalid Abbasi said that the raid was conducted after they received a tip-off about the presence of some members of the gang in the area. They fired at the law enforcers, who retaliated and killed two of the suspects. Two other suspects escaped under the cover of firing.

According to the police, the deceased gangsters were involved in various cases of target killings, kidnappings and extortion.

Similarly, another alleged gang member of Lyari was killed in an encounter with the police on Mehmood Shah Road within the limits of Napier police station. The deceased was identified as Kashif aka Mota. During routine patrolling in the area, the police received a tip-off about the presence of some suspects on Mehmood Shah Road. The police reached the spot and killed the suspect after an exchange of fire. However, his accomplice escaped.

SP Sheraz Nazeer said that Kashif was a member of the Sohail Dada group of the Lyari gangsters. The gang leader, Dada, used to operate his gang from Malir and was allegedly involved in more than 100 cases of crime. He was killed recently killed in the Old City area by the Anti-Extremist Cell of the Crime Investigation Department. The police said that Kashif was considered a close aide of Dada and was wanted by the police in a number of cases.

Published in The Express Tribune, July 11th, 2014.


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Political worker’s death leads to protests By Our Correspondent


KARACHI:

The roads, on Thursday morning, were blocked in Saddar as the police had put barricades to avoid problems at the funeral of Majlis-e-Wahadat-e-Muslimeen’s (MWM) worker, Asif Ali alias Karbalai.

Asif Ali, a senior worker of the MWM, was shot dead in a targeted attack in Saddar on Wednesday night. He was a resident of Soldier Bazaar. He was buried at the Wadi-e-Hussain graveyard.

Around two unidentified men on a motorcycle shot Ali who was driving a black Suzuki Cultus, said the police. The incident took place near Empress Market.

Ali was shot at multiple times and died on the spot. The body was taken to Jinnah Postgraduate Medical Centre for an autopsy and later handed over to the family. As the news of his death spread, the situation in Soldier Bazaar became tense as unidentified people tried to shut the area down.

This was the third time Ali had been targeted. SHO Ghazanfar Kazmi claimed that it was a sectarian killing and the same people had attacked him again. He added that a case has been registered and an investigation was being carried out.

The protest

After news of Ali’s death spread, different organisations including the MWM also staged a protest on Numaish Chowrangi, MA Jinnah Road. Several protesters shouted slogans against the incident as well as the government and law enforcement agencies.

According to the MWM spokesperson, this was not the first time they had been targeted in Karachi. “It has become a routine for us,” he said.



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Fatalities: Two die in separate incidents By Our Correspondent


HYDERABAD:

A young boy was shot dead and another was injured during a clash over a piece of land between two groups on Wednesday night.

The incident took place in Wahdat Colony within the limits of Qasimabad police station. According to the police, the children were playing on government-owned land when an argument ensued between the people of Katrio and Syed communities, and lapsed into violence.

Twelve-year-old Abdul Haseeb Jokhio was hit by a bullet in his head and died on the spot. Another child, Sajjad Chandio, sustained a gunshot to his neck. He is in a critical condition in the hospital.

An FIR of the incident has not been registered as yet.

In a separate incident, a 30-year-old man, Laung Kolhi was shot dead during an armed robbery near SSP Office on Thursday. According to Cant SHO Aijaz Lakho, two armed men riding a motorcycle tried to snatch cash and a mobile phone from Kolhi. He was shot dead for resisting. The police are yet to register an FIR.


Drone strike in North Waziristan not confirmed yet: FO By Web Desk / AFP


NORTH WAZIRISTAN: The drone strike reported in North Waziristan today has not been confirmed yet, Foreign Office spokesperson Tasnim Aslam stated on Thursday, during her weekly media briefing in Islamabad.

Express News reported earlier today that a drone strike in North Waziristan killed seven people and injured three others.

“I have also seen media reports about the drone strike but have no confirmation as yet about the veracity of these reports,” Aslam said.


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“Our position on drone strikes is very clear. We have condemned these attacks. We have made it clear that these attacks are unacceptable, they violate Pakistan’s sovereignty,” the spokesperson added.

Aslam remarked that Pakistan has been successful in creating a strong public opinion against drone strikes which violate the international law, adding that drone strikes complicate efforts to eliminate terrorists.

The unmanned aircraft is said to have targeted a building and car in the Datta Khel area of North Waziristan Agency.

Two US drones fired four missiles, local security officials said.

A local security official told AFP that Thursday’s drone strike had killed four foreign fighters.

“The compound and a vehicle parked inside were completely destroyed,” the official told AFP.

Another security official in Peshawar confirmed the attack.

The last drone strike carried out in the tribal area was on June 18. It had killed at least six militants in North Waziristan.

More than 2,000 people have been killed in drone attacks since August 2008, according to an AFP tally, with critics charging that the strikes cause many civilian casualties.

Previous strikes

On June 11, two successive drone strikes reportedly killed around 16 people and injured few others in Miramshah.

This was the year’s first drone strike after a six-month lull. The previous drone attack on Pakistani soil occurred on December 25, 2013 in the Qutab Khel area of Miramshah, killing four suspected militants.

According to media reports, the strikes were temporarily halted at the Pakistani government’s request.

Gaza violence spirals as UN warns of regional threat By AFP


GAZA CITY, PALESTINIAN TERRITORIES: Israeli warplanes pounded Gaza relentlessly on Thursday, causing a growing number of civilian casualties, as the United


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Nations Security Council (UNSC) was meeting urgently over Israel’s spiralling confrontation with Hamas.

Five children and four women were among 27 people killed in Israeli air strikes on Thursday, medics said, with most of the bloodshed in Khan Yunis.

The deaths bring to 78 the overall number of Gazans killed since Israel launched Operation Protective Edge early on Tuesday to halt cross-border rocket fire.

Palestinian president Mahmud Abbas has accused Israel of committing “genocide” in Gaza, but Israel showed no sign of letting up, with six children among 27 Palestinians killed in air strikes carried out since midnight (2100 GMT).

And Israeli Prime Minister Benjamin Netanyahu has vowed even tougher action against Hamas, despite growing international calls for a ceasefire in the worst confrontation in and around Gaza since 2012.

So far, there have been no Israel deaths but Hamas has kept up a steady barrage of rocket fire on cities in central Israel, sending people fleeing for cover as air raid sirens rang out in cities as far away as Jerusalem, Tel Aviv and even Haifa.

“We are facing long days of fighting and Hamas attempts to surprise Israel with attacks from the air, sea and land,” Israeli Defence Minister Moshe Yaalon said Thursday.

The violence has emptied the streets from Gaza City to Tel Aviv, as both Israelis and Palestinians take shelter indoors for fear of being caught in the open when the next rocket or missile hits.

On the beachfront in Tel Aviv, cafes which would normally have been bursting at the seams at the height of tourist season, sat empty, their waiters nervously checking the phones for any news of an incoming missile.

But in cafes in Gaza, the story was much darker after an Israeli missile slammed into a coffee shop in Khan Yunis, killing eight as they watched a World Cup semi-final match. Another 15 people were injured.

And Israel has confirmed preparations are under way for a possible ground attack, with tanks seen massing along the border and Netanyahu facing mounting pressure from hardliners within his coalition to put boots back on the ground in the territory from which Israel pulled all troops and settlers in 2005.

A senior official told reporters on Thursday Israel’s goal was to get Hamas to stop “the launching of rockets and carrying out terror attacks against Israelis.”

“If we can achieve our goals without a ground operation, we would prefer it this way,” said the ministry of strategic affairs director general Yossi Kuperwasser.


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“Gaza is on a knife edge. The deteriorating situation is leading to a downward spiral which could quickly get beyond anyone’s control,” UN chief Ban Ki-moon warned ahead of an emergency meeting of the Security Council at 1400 GMT.

“The risk of violence expanding further still is real. Gaza, and the region as a whole, cannot afford another full-blown war,” he said.

Ban spoke with Netanyahu, urging him to exercise maximum restraint, although he described the Gaza rocket attacks as “unacceptable and must stop”.

He also spoke with Abbas, Egypt’s President Abdel Fattah al-Sisi and US Secretary of State John Kerry over the crisis, which drawn calls for restraint from Washington and the European Union.

As the number of victims in Gaza rose, Egypt opened the Rafah border crossing, with hospitals in north Sinai placed on standby to receive the wounded, Egypt’s official MENA news agency reported.

One missile attack on Khan Yunis struck two homes, killing four women and four children, while another air strike killed a five-year-old boy in the northern Gaza town of Beit Lahiya, emergency services spokesperson Ashraf al Qudra told AFP.

The Israeli military said it had hit more than 300 targets overnight, raising the total number of strikes in just over 48 hours to 750, in Israel’s largest military operation in Gaza since November 2012.

The air offensive has so far failed to staunch the rocket fire, with 84 rockets hitting Israel on Thursday and another 12 intercepted by Iron Dome.

Neither side has shown any sign of backing down, and Israel has approved the call-up of 40,000 reservists as it steps up its preparations for a possible ground assault.

Analysts said Hamas and its backers had a clear aim for their military build-up: to drag Israel into a ground war hoping to inflict a heavy number of casualties.

Israeli forces entering Gaza would face likely attack by Hamas anti-tank weapons, including Kornet missiles used by Hezbollah in the 2006 Lebanon war, and improvised explosive devices, they said.

There would also be a possibility of capturing Israeli soldiers for prisoner swaps.


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Five FC men martyred in Loralai July 11, 2014

Five troopers of Frontier Corps Balochistan were martyred and another sustained injuries when terrorists attacked their picket near Duki in the wee hours of Thursday.

Copyright Pakistan Press International, 2014

Pakistani jailed 18 years to life for wife's New York murder July 11, 2014

A US judge sentenced an elderly Pakistani-American to 18 years to life in prison Wednesday for murdering his wife in New York after she refused to cook him a goat supper. Noor Hussain, 75, was convicted of second degree murder for killing Nazar in April 2011 as she lay in bed in their Brooklyn apartment after subjecting her to years of abuse. Frail and with medical problems, Wednesday's sentencing from Brooklyn Supreme Court Judge Matthew D'Emic means that Hussain will likely die behind bars. District attorney Kenneth Thompson welcomed the tough penalty. "This defendant viciously attacked his wife as she lay in bed, unable to defend herself," he said. "Now the defendant has been held accountable for this brutal and cowardly act." Thompson said Hussain "viciously" beat 66-year-old Nazar, his third wife, to death. The medical examiner's office said she had been battered more than 20 times. She died of a fatal brain hemorrhage. Hussain admitted only to striking her with a wooden stick after she made lentils rather than the goat dinner he wanted. He maintained she "disrespected" him by swearing and believed he was entitled to "discipline" his wife of 21 years. The harrowing trial saw photographs of Nazar's swollen, bruised face, and of her body lying on a blood-stained bed next to a blood-soaked bedroom wall in the couple's modest apartment. Neighbour Safida Khan told the court she heard the Hussains argue for years, and that she twice intervened. She testified hearing Nazar "crying and yelling" and her husband "cursing and shouting" on the day she died. Relatives said Hussain moved to the United States more than 30 years ago in search of a better life and worked at a gas station.



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7 security officials dead in separate attacks in Balochistan, K-P By Web Desk / Shezad Baloch


QUETTA / PESHAWAR: Seven security officials were killed in two separate incidents in Balochistan and Khyber-Pakhtunkhwa, Express News reported on Thursday.

In the first incident, unidentified men attacked a check post in Dukki area of Loralai district in Balochistan, gunning down five personnel of Frontier Corps (FC).

According to Levies Balochistan, the assailants, who were on motorbike, carried out the deadly attack in the early hours of Thursday, adding that they managed to flee after the attack.

“The tragic incident took place near Nawab Coal mine,” an official said on anonymity.

The attack also left one FC person, identified as Sajid, critically injured. The deceased FC men were identified as Sarfraz Pathan, Riasat, Akbar Khan, Zia Khan and Rashid Farid.

A high contingent of security forces reached the area and has started a search operation to find the attackers.

No one claimed responsibility for the attack till the filing of this report.

Peshawar attack

In the Chamkani area of Peshawar, unidentified armed men opened fire on a police mobile, killing two police officials and injuring another.

On retaliation by the police, one of the attackers was killed while the others fled.

After the incident, the site of the attack was cordoned off and a search operation was started in order to find the assailants.

Funeral prayers for these policemen were offered in the police line area of the city.

Bomb blast near bank in Bannu injures 5 By Web Desk


BANNU: A bomb blast near a bank on Railway Road in Bannu injured at least five people, Express News reported on Thursday.


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According to the police, the bomb was planted in a motorcycle and detonated via remote control.

No loss of life has been reported as of yet.

Ten shops were also damaged in the explosion.

Police and rescue teams have reached the site of the blast and further investigations are underway.

Blast outside PPP leader's house in Peshawar By Web Desk


PESHAWAR: An explosion has occurred outside the house of Pakistan Peoples Party leader Misbahuddin near Kohat Road in Peshawar, Express News reported.

So far, no casualties have been reported.

The explosion was heard around the city and firing can also be heard after the explosion.

Rescue teams and bomb disposal squad are on their way to the site of the blast.

This is a developing story and will be updated accordingly.


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Miscellaneous News

Unfriendly ties: US turns down Pakistan’s demand for LNG supply By Zafar Bhutta


ISLAMABAD:

The United States has refused to enter into a liquefied natural gas (LNG) supply deal with Pakistan on a state-to-state basis and has instead suggested that Islamabad should strike an agreement with Qatar for gas import, but it could prove quite expensive.

Background interviews with some officials reveal that the government was upset over the US response, which denied LNG supply to a country that has been its key strategic partner since long.

On the other side, Washington has offered civil nuclear technology to Delhi and a US company has clinched an LNG supply accord with an Indian firm at $12 to $13 per million British thermal units (mmbtu).

The US has also piled pressure on Pakistan to prevent it from pushing ahead with a vital gas pipeline project with Iran, called the Iran-Pakistan (IP) pipeline.

“US is pressing Pakistan to source LNG supplies from Qatar in a government-to-government contract, but it will cost around $19 per mmbtu,” an official told The Express Tribune.

Separately, US firm ConocoPhillips, which is operating in Qatar, would also be able to offer LNG to Pakistan, he added.

ConocoPhillips has shareholding in a joint gas field between Qatar and Iran from where LNG is being exported to the entire world. The South Pars field, from where Pakistan was to import gas under the IP pipeline, is also shared by Iran and Qatar.

Experts are of the view that the government could not afford to pay a high LNG price to Qatar, which stands close to the furnace oil price of $20 per mmbtu. Pakistan could afford a price that is in the range of $13 to $15 per mmbtu, they say.

According to officials of the Ministry of Petroleum and Natural Resources, they asked the US government to commit LNG export, which could be quite cheap compared to Qatar.

US officials say they place no bar on non-Free Trade Agreement (FTA) countries including Pakistan on inking an LNG deal with US private enterprises.


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All natural gas production and LNG manufacturing in the US is the endeavour of private enterprises, they say, adding the American government does not have any agreement to sell LNG and is not negotiating with any country for gas export.

Instead of the IP pipeline, the US favours another project called the Turkmenistan, Afghanistan, Pakistan and India (TAPI) gas pipeline. At this stage, however, this project only looks like a dream and is far from reality because of the unrest in Afghanistan.

Insiders believe the IP project, which was at an advanced stage, has been all but shelved following a $1.5 billion ‘gift’ to Pakistan from a friendly nation, widely believed to be Saudi Arabia.

Officials say the country missed an opportunity to purchase LNG at a cheaper rate from Qatar in the past. Now, a price negotiation committee is being constituted to bargain with Doha.

Meanwhile, Pakistan State Oil has floated a tender, seeking bids for LNG import. The government is working on three options to secure LNG supplies which include spot purchases, floating tenders and a government-to-government contract with Qatar.


FY14: Growth rate was 3.3%, govt admits to IMF By Shahbaz Rana


ISLAMABAD:

After denying it for weeks, the government has finally admitted that economic growth for the recently-concluded fiscal year is expected to be around 3.3% – the worst in years – breaking the myth of economic revival in the first year of the Pakistan Muslim League-Nawaz (PML-N) government.

The admission, however, was only made in front of the International Monetary Fund (IMF).

“We now expect that the GDP will expand by about 3.3% in fiscal year 2013-14,” the government said in the Memorandum of Economic and Financial Policies (MEFP) which it submitted to the international lender on June 19.

Publicly, the government has maintained that the growth in 2013-14 stood at 4.1%. The figure was announced as the preliminary growth rate for the previous fiscal year and published in the Economic Survey of Pakistan 2013-14 as well as the State Bank of Pakistan’s (SBP) quarterly report released yesterday. The government has yet to share the actual growth rate with people and Parliament.


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Pakistan needs an annual growth rate of over 7% to accommodate the bulk of youth that is entering the market every year but remains jobless due to limited economic opportunities, according to the Planning Commission of Pakistan.

The government shared its fresh estimates of economic growth with IMF two days before the budget was approved by Parliament but never shared these details, either with lawmakers or the federal cabinet.

The MEFP was attached with the letter of intent (LoI) the government submitted to IMF while seeking approval for the fourth $555 million tranche of the $6.5 billion loan programme. The LoI is jointly signed by Finance Minister Ishaq Dar and SBP Governor Ashraf Wathra.

The rate mentioned in the MEFP is even lower than the 3.7% growth achieved by the Pakistan Peoples Party (PPP) government in its last year in power. The figure was then the lowest rate in five years.

The 3.3% growth rate is in line with IMF projections but even lower than the estimates of the Institute for Policy Reforms (IPR) which had predicted 3.5% growth rate. The government had vehemently contested IPR’s estimates.

The government has delayed the scheduled release of the third quarter GDP figures – perhaps to hide dismal economic performance – and decided that it will announce in October this year.

The Express Tribune tried to contact finance ministry spokesman Rana Assad Amin and Asif Bajwa, chief statistician of Pakistan Bureau of Statistics. Neither of them responded to questions regarding why these estimates were not shared with Parliament and the reasons behind hiding this information.

“In my budget speech, I had predicted that very soon the government’s own documents would disclose that the economic growth rate was not 4.1% in fiscal year 2013-14,” said Pakistan Tehreek-e-Insaf’s (PTI) financial wizard and member of the National Assembly Asad Umar.

He said his party will move a privilege motion in the lower house. “By concealing facts from the National Assembly, the government has breached the privilege of the lower house of Parliament,” the PTI MNA added.

The government has also misled Parliament and the federal cabinet when it came to growth estimates for fiscal year 2014-15. It got a growth rate of 5.1% approved from the National Economic Council and shared the same with Parliament.

But according to the MEFP, “in the next fiscal year, expansion should accelerate to 4%,” as downside risks to growth remain. The government’s 4% growth estimates are in line with the IMF’s projections that also see a growth rate of around 4% in the current fiscal year.



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Economic fortunes: Economy has turned a corner, says central bank By Our Correspondent


KARACHI:

The State Bank of Pakistan (SBP) has said the country’s economy ‘appears to have turned a corner’ during the third quarter (January-March) of 2013-14.

In its third quarterly report for 2013-14 on the state of the economy released on Thursday, the central bank termed the ‘revival of economic activity’ a key development in the last fiscal year when real gross domestic product (GDP) growth clocked up at 4.1 per cent — highest in the last five years.

The report says that after many years of low growth, sentiments about the economy seem to have improved. Manifestations can be seen in the rebound in real GDP growth, rise in private sector credit, contained fiscal deficit, subdued inflation outlook, sharp increase in foreign exchange reserves, and the appreciation and subsequent stability in the exchange rate. It mentioned that improvements in the economy were the result of the government’s resolve to address the energy shortage, growing perception of business-friendly policies, and external inflows that have recently been realised. More specifically, the auction of 3G/4G licences, larger than projected inflow via Eurobonds, programme loans from the international financial institutions ( IFIs), and SBP’s efforts to support the foreign exchange reserves have sharply improved the outlook of the country’s external sector as well as fiscal position, it said.

However, the report emphasised that “these signs of improvements should not discount the challenges faced by the economy; and efforts for much needed structural reforms should continue.”


2013-14: Remittances clock in at $15.8 billion By Our Correspondent


KARACHI: Overseas Pakistani workers remitted $15.8 billion in 2013-14, which translates into an increase of 13.7% over the remittances of $13.9 billion received in 2012-13.

According to data released by the State Bank of Pakistan (SBP) on Thursday, the inflow of remittances during 2013-14 from Saudi Arabia, United Arab Emirates, United States, United Kingdom, GCC countries (including Bahrain, Kuwait, Qatar and Oman), and EU countries

http://www.sbp.org.pk/reports/quarterly/fy14/Third/Full%20Report-QR3-FY14.pdf


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amounted to $4.7 billion, $3.1 billion, $2.4 billion, $2.1 billion, $1.8 billion and $431.8 million, respectively.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during 2013-14 amounted to over $1 billion as opposed to $969.16 million received during the preceding fiscal year.

In June, the inflow of remittances from Saudi Arabia, UAE, US, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman), and EU countries amounted to $471.88 million, $295.63 million, $222.34 million, $200.82 million, $168.62 million and $37.42 million, respectively.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during June amounted to $102.57 million.


Record high: Mobile phone subscriptions spike up to 140m By Our Correspondent


KARACHI: The country’s total mobile phone subscriptions reached almost 140 million, 139.2 million to be exact, for the first time at the end of May 2014, which corresponds to a cellular mobile tele-density of 76.2%, according to the latest data released by the Pakistan Telecommunication Authority (PTA).

The PTA statistics revealed that each of the five cellular mobile operators (CMOs) were able to increase their subscriber base – collectively selling 1.5 million new connections in the month of May, 2014.

China Mobile Pakistan (Zong) and Telenor Pakistan were once again the highest contributors to the growth of country’s mobile phone subscribers. Interestingly, May 2014 turned out to be a good month for Warid, which regained 13 million subscriptions after a gap of nearly two years – it was in fiscal 2011-2012 last time when the company had more than 13 million subscribers.

Zong, the Pakistani subsidiary of China Mobile, continued positive growth trend by selling 754,368 new connections – the highest by any operator in the month of May – and sustained at number three with 26.7 million subscriptions.

As of May, Zong accounts for 19% of the country’s telecom subscriptions, one percentage point above Ufone that stood at number 4 with a market share of 18% or 24.6 million subscribers in the same period – Ufone sold 72,600 new connections during the review period.

Telenor Pakistan sold 434,912 new connections during the month under review, taking its overall subscriber base to 36.3 million. The Pakistani arm of the Oslo-based cellular giant holds 26%


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share in the country’s cellular subscriber base, only two percentage points behind the market leader Mobilink.

Mobilink maintained the top slot by growing its subscriptions to 38.4 million after adding 143,882 new subscriptions to its network. Its share in the cellular segment is 28% as of May, 2014, revealed the data.

Warid Telecom, the smallest player by subscriber base, sold 109,506 new connections and finished with a market share of 9% or 13 million subscriptions, according to the latest statistics.


Reserves increase 6.2% in a week By Kazim Alam


KARACHI:

Foreign exchange reserves held by the State Bank of Pakistan (SBP) stood at $9,602 million on July 4 after registering an increase of 6.2% over the preceding week, data released by the central bank showed.

The central bank’s foreign exchange reserves increased $569 million to $9,602 million at the end of the first week of 2014-15 as opposed to $8,613 million on June 27.

The increase is attributed to receipts of $556 million from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF), according to an SBP statement. During the week ending on July 4, the SBP made payments of $78 million from its reserves on account of external debt servicing and other official payments.

SBP-held foreign exchange reserves dipped quickly, which was followed by a swift recovery, in the last fiscal year. On a year-on-year basis, they increased more than 50% in 2013-14. The drop was rather significant in the first half of the last fiscal year, as the central bank’s reserves decreased to less than $3.2 billion by the end of January, which translates into the import cover of less than one month. The plunge prompted international financial institutions to raise the red flag, resulting in a series of actions from the finance ministry, which ultimately strengthened SBP-held foreign exchange reserves.

Although the SBP-held foreign exchange reserves increased dramatically in the last fiscal year, the IMF believes they remain at low levels and that the central bank should continue its efforts until reserves ‘comfortably exceed’ three months of import cover. “Greater willingness to accommodate downward exchange rate flexibility could play an important role in accelerated reserves accumulation while helping boost exports over time,” the international lender wrote in its third review of the Extended Arrangement under the Extended Fund Facility (EFF).


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While referring to the grant from Saudi Arabia totalling $1.5 billion and the Eurobond issue ($2 billion), the IMF suggested that the SBP should “not bet on one-off inflows” – such as grants and privatisation receipts – and instead align monetary and exchange rate policy to further boost reserves.

According to the IMF, the SBP believes the current account deficit is low and the main deterrent to private inflows is not the interest rate. While the current account deficit increased by 3% year-on-year in the first 11 months of 2013-14, foreign direct investment (FDI) that Pakistan received over the same period amounted to $1.36 billion. It was up 2.5% from the amount received under the same head during the comparable period of the preceding fiscal year.

Total liquid foreign reserves held by the country, including net foreign reserves held by banks other than the SBP, stood at $14,637.7 million while net foreign reserves held by banks amounted to $5,035.4 million on July 4.


SHC bars transfer of frozen funds By Our Correspondent


KARACHI: The Sindh High Court (SHC) on Thursday barred the port authorities from transferring over Rs30 million, frozen from the accounts of the foreign firm over the allegations of stamp duties evasion, to the revenue or accountability bureau.

Headed by Justice Muhammad Ali Mazhar, the bench passed this direction on a petition filed by the China International Water and Electric Company against deduction of the amount from its bills allegedly in an unlawful manner over the allegations of stamp duties evasion.

It had named the interior ministry, ports and shipping ministry, the National Accountability Bureau (NAB) and the Karachi Port Trust (KPT) as respondents in the plea.

The Supreme Court, while hearing the Karachi law and order suo motu case, had ordered the Board of Revenue (BoR) chief to ensure full recovery of the duties on the ports to be injected to the fragile economy.

The firm’s lawyer, Haider Waheed, told the judges that his client had participated in the tender floated by the KPT for dredging and reclamation at the Pakistan Deep Water Container Port. The petitioner company being the lowest bidder was awarded the contract.

He said the NAB officials issued a letter on May 20 to the KPT secretary and the petitioner, saying that an inquiry has been initiated against them and the chief inspector.

“The allegation against the petitioner is that on awarding of the contract. They have fraudulently deposited deficient stamp duty,” he referred to the NAB inquiry.


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For a flawless distribution: Zakat fund disbursement handed over to Sindh Bank By Our Correspondent


KARACHI: The Zakat department has replaced National Database and Regulation Authority (NADRA) with the Sindh Bank for an efficient disbursement of the Zakat fund.

A joint mechanism has been agreed upon by the Sindh Zakat department and the bank for distribution among as many as 85,000 beneficiaries free of charge. The initiative is a result of the reports of massive discrepancies in distributing Zakat among ‘mustehqeen’ (deserving people).

The Sindh Bank will supply ATM cards to all beneficiaries so that they can conveniently draw their guzara allowance installments from any bank branch.

This was decided during a high-level meeting presided over by Sindh Chief Minister Qaim Ali Shah, which was held to come up with a strategy for flawless distribution of the Zakat fund among deserving beneficiaries at the Chief Minister House.

Shah said that the government has already launched different income support programmes and wants to ensure judicious and easy distribution of the Zakat fund among the poor as well.

“The organisation previously entrusted with the responsibility of an efficient distribution of the Zakat fund has not delivered up to the expectation of the beneficiaries,” said Shah, referring to NADRA.

“We have received many complaints about the system under which the Zakat fund was being distributed in the province,” he said. “Therefore, we are giving the charge of the disbursing mechanism to another efficient and active organisation.”

According to Shah, different banks and organisations had agreed to launch the services for a three per cent deduction from the fund as their services charges. However, the Sindh government, and especially the CM, did not feel at ease with the idea of the deduction of even a single rupee from the Zakat fund for the poor people, he added.



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EC approves FCCI election schedule By Imran Rana


FAISALABAD: The Executive Committee (EC) of the Faisalabad Chamber of Commerce and Industry (FCCI) has approved the schedule for the 2014-15 FCCI elections.

According to the schedule, changes regarding the name of representatives appearing in the list of provisional voters shall be sent to the FCCI secretary general along with the necessary proof of eligibility up to July 12, 2014.

The secretary general shall display the provisional list of all members eligible to vote with the name and the national identity card number of their representative at the notice board and website of the chamber on July 15.

Any person who is eligible to contest the election for the vacant posts of the member executive committee shall send his nomination papers duly proposed and seconded by a registered voter and signed by the candidate.

In the same manner, women entrepreneurs desiring to contest the election for the reserved seats in the executive committee for women will also submit their nomination papers up to August 25.

Scrutiny of the nomination papers by the commission will be completed on August 26.

The final list of candidates for the election for all the members who are eligible to participate in the election will be displayed on September 10.

The polling for the corporate class will be held on September 15, followed by the associate class on September 16. The election commission will declare the provisional results on September 15 and 16 followed by the election for the women reserved seats on September 17.

The polling for the election of office bearers will be held on September 22, while the results will be announced officially at the annual general body meeting of the chamber on September 30.



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Saarc countries: ‘Sensitive list needs to be reviewed’ By Our Correspondent


KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zakaria Usman said the respective governments of South Asian Association of Regional Countries (Saarc) should speed up their efforts to increase regional trade.

“Saarc governments need to review their country-specific list of products that have export capacity but their trade volumes are lower,” said Usman. “There is also a requirement to devise strategies to promote trade and development in the region by reducing trade barriers. Sensitive list should be revisited to liberalise trade among Saarc countries for those products, which are being imported from other countries.”

He said at present Nepal maintains 25.5% of total product lines in sensitive list which means that 25.5% product lines are not contributing in regional trade with Nepal. Similarly, 22.6% of total products lines are included in the sensitive list of Pakistan, which means that they have no contribution in regional trade. Sri Lanka’s list contains 20.3%, Maldives 12.8%, India 16.9% and Bhutan 3% of total product lines.

Shifting of items from sensitive list to general category leads to reduction in duties and boosts trade. The eight Saarc member countries including Pakistan and India concluded a landmark treaty South Asian Free Trade Area (Safta) with a pledge to allow free trade among member countries by eliminating trade barriers and scaling down their tariffs in two phases from 0% to 5%.

“Under the Trade Liberalisation Programme of Safta, the customs duties on products will be progressively reduced and this programme will be completed by 2016. Currently, most of the tradable items are in the negative lists of the respective member states.



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OPEN MARKET FOREX RATES Updated at: 11/7/2014 6:51 AM (PST)

Currency Buying Selling Australian Dollar 92.25 92.5 Bahrain Dinar 261.75 262 Canadian Dollar 92.4 92.65 China Yuan 15.8 15.95 Danish Krone 17.95 18.1 Euro 134.75 135 Hong Kong Dollar 12.5 12.65 Indian Rupee 1.6 1.65 Japanese Yen 0.97 0.98 Kuwaiti Dinar 349.75 350 Malaysian Ringgit 30.25 30.5 NewZealand $ 85.25 85.5 Norwegians Krone 16.3 16.45 Omani Riyal 256.25 256.5 Qatari Riyal 27.1 27.35 Saudi Riyal 26.3 26.55 Singapore Dollar 79.15 79.4 Swedish Korona 14.35 14.5 Swiss Franc 110 110.25 Thai Bhat 3 3.05 U.A.E Dirham 26.9 27.15 UK Pound Sterling 169.25 169.5 US Dollar 99 99.25


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INTER BANK RATES Updated at: 11/7/2014 6:51 AM (PST)

Currency Bank Buying TT Clean

Bank Selling TT & OD

Australian Dollar 92.49 92.67

Canadian Dollar 92.38 92.56

Danish Krone 18.01 18.05

Euro 134.28 134.55

Hong Kong Dollar 12.70 12.72

Japanese Yen 0.9692 0.9711

Saudi Riyal 26.24 26.29

Singapore Dollar 79.28 79.44

Swedish Korona 14.49 14.52

Swiss Franc 110.46 110.69

U.A.E Dirham 26.79 26.84

UK Pound Sterling 168.77 169.11

US Dollar 98.4 98.6


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Bullion Rates (Gold Prices) in Pakistan Rupee (PKR) As on Fri, Jul 11 2014, 02:45 GMT

Metal Symbol PKR for 10 Gm

PKR for 1 Tola

PKR for 1 Ounce

Gold 24K XAU 42,447 49,458 132,028

Palladium XPD 27,667 32,236 86,055

Platinum XPT 47,977 55,901 149,228

Silver XAG 681 793 2,118

Gold Rates in other Major Currencies

Currency Symbol 10 Gm 1 Tola 1 Ounce

Australian Dollar AUD 458 534 1,425

Canadian Dollar CAD 458 533 1,424

Euro EUR 316 369 984

Japanese Yen JPY 43,589 50,788 135,580

U.A.E Dirham AED 1,580 1,841 4,915

UK Pound Sterling GBP 251 293 781

US Dollar USD 430 501 1,338

* These rates are taken from International Market so there may be some fluctuation from Local

Market.

http://www.forex.pk/bullion-rates-gold-24k-xau-pkr.php

http://www.forex.pk/bullion-rates-palladium-xpd-pkr.php

http://www.forex.pk/bullion-rates-platinum-xpt-pkr.php

http://www.forex.pk/bullion-rates-silver-xag-pkr.php

http://www.forex.pk/bullion.php?base=AUD&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=CAD&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=EUR&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=JPY&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=AED&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=GBP&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=USD&curr=XAU&type=ounce


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Gold Rates & Silver Rate from major cities of Pakistan A year by year reference of the daily Silver Price in Pakistan and history of Gold Rates in Pakistan

Jul 10, 2014

Following table shows gold rates per Tola in Pakistan in Pakistani Rupess (PKR) in 24 carat per 10 Grams, 22 carat per 10 grams and sliver rates per 10 grams in pakistan.

City 24k per 10gm 24k per Tola 22k Per 10gm 21k Per 10gm Silver Karachi 42,171 49,200 38,657 36,900 643 Lahore 42,171 49,200 38,657 36,900 643 Multan 42,171 49,200 38,657 36,900 643 Faisalabad 42,171 49,200 38,657 36,900 643 Rawalpindi 42,171 49,200 38,657 36,900 643 Hyderabad 42,171 49,200 38,657 36,900 643 Gujranwala 42,171 49,200 38,657 36,900 643 Peshawar 42,171 49,200 38,657 36,900 643 Quetta 42,171 49,200 38,657 36,900 643 Islamabad 42,171 49,200 38,657 36,900 643 Sargodha 42,171 49,200 38,657 36,900 643

Source: Karachi Saraf.

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