Railways settles uplift priorities

ISLAMABAD: Following a bailout package of Rs1.1 billion announced by the federal government, the crisis-hit Pakistan Railways was finalising its priorities including maintenance of 145 locomotives and rehabilitation of rail tracks and coaches.

A meeting in this regard would be held by mid-January between Minister for Railways and Minister for Finance in which the former would brief the latter about projects to be executed after release of funds.
“We have planed to spend Rs 6.1 billion on maintenance of 145 locomotives, Rs 2 billion each on rehabilitation of tracks and coaches while Rs one billion would be reserved for future use,” Minister for Railways Haji Ghulam Ahmed Bilour told APP.
After their maintenance, 75 per cent of locomotives would be used for freight carrying and the rest would be used for passenger coaches. According to the estimates, a locomotive of 3000 horse power generates up to Rs 60 million per annum against Rs50.5 million by the one with 2000 horse power.
He said for maintenance purpose, the spare parts would be imported and 10 to 12 locomotives would be repaired each month hoping that it would help a lot to minimize losses of this public entity..-Agencies

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Posted in: billion,help,hit,Islamabad,January,losses,lot,Minister,Pakistan,projects,Railways,rehabilitation

NSS deposits up 19pc YoY in Nov

5M net investment reaches Rs66.5bn

Aamir Abidi

KARACHI: Investment in National Saving Schemes (NSS) saw a jump of 19.1 per cent YoY with an inflow of Rs11.74 billion during November 2010 versus Rs9.88 billion investment in November 2009.

However, net investment in the fiscal year 2010-11 down by 32.4 per cent to record at Rs66.49 billion in 5MFY11 against Rs98.37 billion attracted in same period last year.
Interest in national saving gradually declined mainly due to the reason that government was not offering attractive rate, and other avenues of investments were also available for investors i.e. Engro Rupiya, as per the TFD analyst.
However, NSS rate increased in January 2011 would attract fresh investments. Special Saving Certificates (Reg) attracted Rs15.13 billion in 5MFY11 compared to Rs38.2 inflow was witnessed during 5MFY10. Similarly, Regular Income Certificates attracted net fresh investment of Rs16.77 billion against Rs19.72 billion in identical period last year. Furthermore, prize bonds attracted Rs11.85 billion against Rs13.45 billion in corresponding period last year.

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Posted in: Aamir Abidi,billion,cent,Certificates,deposits,Engro Rupiya,inflow,investment,net,NSS,TFD,YoY

Govt blamed for fiscal deficit

ISLAMABAD: Government’s expenses consistently on the rise and if the trend goes on it will only lead to wider budget deficit. This was expressed by Governor State Bank, Shahid Hafeez Kardar while briefing Senate’s Standing Committee on Finance here Tuesday.  Senate Standing Committee meeting was chaired by Senator Ahmed Ali.

Governor State Bank of Pakistan told the committee if government expenditures remain on the higher side, then fiscal deficit may reach to 6 per cent of the gross domestic product. Governor SBP informed that during the current fiscal revenues were increased by 7 per cent whereas government expenses rose by 9 per cent.
Kardar added that government has borrowed Rs374 billion for its expenses from the central bank, whereas for the purchase of commodities Rs366 billion more had been borrowed while Rs368 billion extra also loaned for public sector entities. Governor central bank said that government still paying monthly Rs20 billion subsidy on power while Rs29 billion annual subsidy being paid on urea. On the occasion Federal Secretary Finance told the Committee that subsidies on power sector and security-related expensed are the biggest ingredients to the rising inflation, added that circular debt in the power sector has reached to Rs145 billion so far.

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Posted in: billion,cent,central bank,Committee,deficit,fiscal,Governor,Govt,Senate,Standing Committee,that

Dubai up most in 2-months; Egypt drops

Gulf stocks mkt

DUBAI: Dubai shares advanced the most in more than two months, leading gains in Gulf markets, as oil climbed to the highest year-end price since 2007. Egypt’s benchmark retreated as a bomb killed 21 people yesterday. Dubai Investments, which owns stakes in more than 40 companies, soared the most since Sept. 19. Drake & Scull International, the Dubai-based engineering contractor, rose for a fifth day

1,668.27 at the 2 pm close in the emirate. The measure lost 9.6 per cent in 2010. Abu Dhabi’s ADX General Index increased 0.8 per cent.

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Posted in: advanced,billion,cent,Drake,Drake Scull,Egypt,end,General,General Index,Gulf,Scull

Foreign portfolio up at $2.9bn

KSE during CY10: foreigners hold 32pc of free float

Offshorers invest $522 million

Ahmed Siddique

KARACHI: Total Investment value of foreign portfolio significantly hiked by 53.2 per cent or $1.02 billion to $2.93 billion at the end of year 2010 against $1.92 billion witnessed on year-end 2009.

Rise in portfolio investment in CY10 driven by fresh investment of $522 million and value of equity appreciation of around $490 million. In terms of rupee, special convertible rupee account (SCRA) showed closing market value of shares and securities at Rs 252 billion against Rs161 billion observed on same period last year, thus reflecting 56.4 per cent jump in portfolio value during the period.
As per “The Financial Daily” analyst, foreign investors own $2.93 billion which is 32 per cent of the free float market capitalization on above date. The main reasons for surge in foreign holding value were significant hike in equity market as it surged by 28.1 per cent or 2,636 points to close at 12,022-level at the end of December 31, 2010 comparing with the index stood at 9,387 points at the end of the year 2009.

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Posted in: Ahmed Siddique,billion,buying,cent,end,Foreign,investment,investors,KSE,net,Offshorers,rupee

Forex reserves up at $16.42bn

KARACHI: Pakistan’s foreign exchange reserves rose to $16.42 billion in the week ending December 25, up from $16.39 billion the previous week, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan (SBP) rose to $12.71 billion from $12.63 billion in the week ending Dec 25, while those held by commercial banks fell to $3.71 billion from $3.76 billion, said Syed Wasimuddin, chief spokesman of the central bank. “The $633 million from the United States will be included in the forex reserve data released next week,” said Wasimuddin. Pakistan’s reserves hit a record high of $17.10 billion in the week ending Oct 15 because of an increase in remittances from overseas Pakistanis and a narrowing trade deficit.

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Posted in: bank,billion,central bank,foreign exchange reserves,Forex,Karachi,Pakistan,Pakistanis,record high,reserves,State Bank

Domestic debt reaches Rs5.08tn

During 5MFY11

Aamir Abidi

KARACHI: Pakistan outstanding stock of domestic debt and liabilities has soared 8.2 per cent or Rs403 billion during the first five-month of current fiscal year (5MFY11), according to the State Bank of Pakistan (SBP). Domestic debt and liabilities recorded at a historical level of Rs5.296 trillion during the period, from Rs4.89 trillion on June 30, 2010, due to a significant rise in budget deficit. Similarly, domestic debt alone rose by Rs427 billion to Rs5.08 trillion in 5MFY11 as against Rs4.65 trillion in June 2010.

The floating debt during the period under review rose by Rs364 billion to Rs2.76 trillion against Rs2.39 trillion in June 2010, while the unfunded debt increased by Rs56.1 billion to Rs1.51 trillion as compared to Rs1.45 trillion.
Furthermore, permanent debt rose by Rs8.1 billion in 5MFY11 to Rs802 billion during the period under review. Within the floating debt category, government borrowed Rs249 billion through MTBs for replenishment. Similarly, it further borrows Rs115 billion through market treasury bills

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Posted in: Aamir Abidi,billion,debt,fiscal year,June,Karachi,Pakistan,review,rise,treasury bills,trillion

Factory output stays sluggish

LSM down 2.07 per cent in 4MFY11

Ghulam Raza Rajani

KARACHI: Pakistan’s industrial output continued to show downward trend and contracted by 2.07 per cent in the first four-month of the current fiscal year mainly due to decline in production of petroleum, chemical and fertiliser sectors, according to data from the Federal Bureau of Statistics (FBS).

During the period, two subsectors decline in production as Oil Companies Advisory Committee (OCAC) reported 13.86 per cent drop in production, and Ministry of Industries down by 4.55 per cent, while Provincial Bureau of Statistics showed a growth in production by 3.64 per cent. On the other hand, month of October also saw the decline – slightly higher by 2.81 per cent over the same period last year, worrying industrial output of the country.
The FBS data further reveals that petro

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Posted in: billion,Bureau,cent,country,decline,FBS,Federal Bureau of Statistics,fertiliser,financial,fiscal,Ghulam Raza Rajani,that

Textiles export grows by 23pc

KARACHI: The export of textile products showed an improvement of around 22.7 per cent in the initial five months (July-November) of current financial year against the same period of the last year, Federal Bureau of Statistics (FBS) reported Thursday. According to the official data, export of textile industry reached $5.12 billion in the period under review against $4.17 billion during the same period of previous year. The improvement in textile export was mainly attributed to higher per unit price of Pakistan textile products, otherwise quantity exported of mostly all the products under the category witnessed decline.
As per details available, ready-made garments export increased by 33.1 per cent to $653 million against $490 million in 5MFY10. Similarly, cotton cloth, knit-wear, bed wear and towel exports increased by 27.9 per cent, 20.7 per cent, 14.2 per cent and 7.3 per cent to $901 million, $928 million, $822 million and $293 million respectively.
Similarly, food group export registered an increase of 7.3 per cent to $1.19 billion in 5MFY11 versus $1.11 billion in 5MFY10.
In food group, rice export registered a jump of 11.9 per cent to $ 779 million against $696 million export of rice witnessed in 5MFY10, whereas fish and fish preparation export surged 34.3 per cent and fruits by 0.5 per cent over the same period last year.

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Posted in: billion,cent,Federal Bureau,Federal Bureau of Statistics,food,group,increased,July November,Karachi,Pakistan,review,rice

Offshorers pour $0.5bn into KSE

Foreigners hold shares worth $2.9 billion

KARACHI: One thing which was interesting at a time of crisis in Pakistan, led by ferocious floods, is the continuous foreign buying in local stock market. Though local investors remained bearish on the market due to liquidity crunch amid huge borrowing by the government, it was the foreign inflows that saved Pakistani market in the outgoing year.

Compared to the net buying of only $24 million in 2009, foreigners in 2010 bought shares worth $1.2 billion and sold $0.7 billion with net buying of $0.5 billion.
High government borrowing is crowding out private investment in Pakistan and local investors prefer to park their funds in risk free government papers or high yielding bank deposits.
In 2010YTD, local companies sold shares worth $168 million on net basis whereas local mutual funds sold $127 million worth of shares. As per the research analyst of Topline Securities, offshore funds now hold shares worth $2.9 billion as of December 17, 2010 which is 8 per cent of the market capitalisation and 31 per cent of free float. He said at the beginning of 2010, their share in overall market cap was 6 per cent and 23 per cent of market free float. Their peak holding was $5.1 billion (27 per cent of free float) in April 2008 and lowest was $1 billion (17 per cent of free float) in March 2009, he added. With no big IPOs in the near future, foreigners share in local bourses will continue to increase. With imposition of capital gain tax, individuals who mostly square their position within a day, their average share in December 2010 declined to 45 per cent compared to approx 57 per cent in January 2010. However, during this period foreign participation increased to 6 per cent as compared to only 3 per cent at the beginning of the year. Foreign participation in local market will remain robust next year due to ample liquidity in the global markets for high risk emerging and frontier countries. With Pakistan market trading at 50 per cent discount to regional market on PE multiples against historical average discount of 30 per cent will compel offshore investors to focus more on Pakistan than other regional markets for better returns amid new phase of quantitative easing (QE2).

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Posted in: billion,buying,cent,December,investors,KSE,liquidity,markets,net,Offshorers,Pakistan,share

Nepra tariff up 94.9pc in 2-year

ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has increased power tariffs by 94.9 per cent for domestic; 67. 6 per cent for commercial and 77 per cent for industrial consumers since March 2008 to August 2010. According to a water and power ministry source, the tariff was increased due to hike in fuel prices, more dependence on thermal generation, non-availability of committed gas and increase in administrative expenses.

He said the past government artificially froze power tariff from 2003 to 2007 which led to accumulation of circular debt to Rs400 billion. He said the energy mix balance has been completely disturbed and currently only 30 per cent of power is being generated by hydel resources while the rest of 70 per cent from thermal ones. Meanwhile, Pakistan Electric Supply Company (PEPCO) is going to start three to five hours load-shedding from December 26 (today) in urban and rural areas across the country due to annual canals closure. Canals will remain closed till January 31, 2011 under annual de-silting programme. At present, as many as 5,000 MW power is being generated by hydel resources which will be reduced to 2,000 MW due to annual canals closure programme. However, owing to induction of three units of KAPCO and two independent power producers (IPPs) AES Pakgen and AES Lalpir will supply about 1500 MW to the national grid system. The power plants were shut down due to inundation by the recent floods. -Agencies

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Posted in: AES,balance,billion,cent,increased,MW,National Electric Power Regulatory Authority,Nepra,prices,rural areas,tariff