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

Nikkei at 8-mth top as US data cheers

TOKYO: Japan’s Nikkei climbed to an eight-month high on Thursday after the dollar jumped against the yen following robust US private-sector jobs data, while Resona surged 14 per cent on speculation it would soon launch a planned share sale. Shares of blue-chip exporters rose, with Toyota Motor Corp gaining 2.6 per cent and Hitachi Ltd rising 2 per cent, leading the Nikkei’s advance after the greenback posted its best one-day gain in more than three months against the yen on Wednesday.

Trading volume picked up sharply as more investors tap into riskier assets on hopes of economic recovery. Around 2.4 billion shares changed hands on the Tokyo Stock Exchange’s first section, well above last week’s average of around 1.3 billion. Advancing issues outpaced declining ones by 1,250 to 302.

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Posted in: cent,focus,Friday,gain,gained,investors,jobs,Nikkei,report,US,US data,yen

Maybank buying Kim Eng for $1.3bn

Maybank move aims to up revenue sources after entering into Pak, Vietnam, & Indonesia

KUALA LUMPUR/ SINGAPORE: Maybank ,Malaysia’s largest lender by assets, is snapping up Singapore broker Kim Eng Holdings for $1.4 billion, in a move to strengthen its grip on the regional stock broking industry and diversify the lender’s source of overseas revenue. The acquisition comes as Southeast Asian markets are on a roll, with Thailand and Indonesia ranking as the best performing major markets in Asia last year, spurred by foreign fund inflows and robust economic growth.

“What Maybank wants to do is expand its stock broking operations, and it makes sense for it to acquire a company which provides immediate exposure,” Vincent Khoo, UOB Kay Hian’s head of research, said on Thursday.
Investment banking and stock broking are becoming increasingly important for Malaysian banks as stiffer domestic competition puts further pressure on net interest margins on its loans.
Two of the best performing Malaysian banks in 2010 were CIMB Group and RHB Capital, which were top deal-makers in terms of number and value respectively. Maybank and Kim Eng shares both rose nearly 3 per cent on Wednesday before trading was suspended on Thursday. Shares in Kim Eng, valued at about $1.3 billion, have risen more than 35 per cent since mid-December, when reports emerged of an impending stake sale. “This position will widen our investment banking scope and reach into Southeast Asian in line with our regional aspirations,” Maybank Chief Executive Abdul Wahid Omar told a news conference. Maybank, which was previously linked with another regional brokerage OSK Holdings, said it has no plans of further acquisitions in this business.

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Posted in: Asian,buying,cent,deal,Indonesia,Kim,Kim Eng,line,Malaysia,revenue,Southeast Asian,Vietnam

SBP rewrites credits rules

Banks/ DFIs told to ensure loan limit

Staff Reporter

KARACHI: State Bank of Pakistan has amended certain provisions of Prudential Regulations for Consumer Financing with immediate effect. According to a Circular (BPRD Circular No 1) issued here on Thursday, State Bank has revised Regulation R-7 pertaining to Maximum Card Limit.

Under the revised regulation, banks/ DFIs shall ensure that overall credit card and personal loan limit, both on secured as well as on unsecured basis, availed by one person from all banks/DFIs in aggregate should not exceed Rs5,000,000, at any point in time, subject to the condition that the overall unsecured/ clean facilities on account of credit card and personal loan of that individual do not exceed Rs2,000,000.
Similarly, in Regulation R-23, a new paragraph has been added as under:
“Banks/DFIs shall ensure that overall personal loan limits and credit card limits, both on secured as well as on unsecured basis, availed by one person from all banks/DFIs in aggregate should not exceed Rs5,000,000, at any point in time, subject to the condition that the overall unsecured/ clean facilities on account of personal loan and credit card of that individual do not exceed Rs2,000,000.” Following the above-mentioned amendment, instruction concerning secured personal loans (other than secured against liquid assets) mentioned in Regulation R-23 stands withdrawn, the circular added. The State Bank has also amended Regulation R-3 by adding a new provision which states as under:  “Banks/DFIs may waive the requirement of 50 per cent debt burden in case a credit card and personal loan is properly secured through liquid assets (as defined in prudential regulations) with minimum 30 per cent margin.”

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Posted in: banks,card,cent,condition,consumer,credit,HR,loan,loans,SBP,Service Rules,State Bank

Wall St dips as consumer shares weigh

US stocks late-morning
NEW YORK: Stocks fell on Tuesday on worries that rising food costs will sap supermarket profits, hurting consumer stocks and denting growing optimism about the economic outlook. Shares of Supervalu Inc nearly 7 per cent after Morgan Stanley told investors to cut holdings in the stock, saying rising food costs will crimp margins. Safeway Inc and Whole Foods Market also slid. Soybean and corn prices traded near two-year highs Tuesday.

"We’re light on consumer staples. One of our concerns is commodity prices are going to bite into profits,” said Thomas Villalta, portfolio manager for Jones Villalta Asset Management in Austin, Texas. Materials were the biggest losers, with the S&P materials index  falling 1.1 per cent, as metals prices dropped after recent gains.

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Posted in: cent,consumer,end,fell,food,Morgan Stanley,prices,profits,rise,rising,traded,Wall St

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

Dec CPI may touch 17.1pc

Inflation likely to cross 19-month high

Aamir Abidi

KARACHI: The disruption in supply of food chain along with increasing commodity prices is expected to cause December 2010 consumer price index (CPI) inflation to jump at 17.1 per cent YoY, pushing MoM CPI inflation to 0.93 per cent. Perishable foods items i.e. tomatoes, egg, vegetable ghee prices increased 98.6, 5.64 and 3.13 per cent MoM along with that of non-perishable food items i.e. wheat & rice prices hiked 0.53 and 0.57 per cent MoM.

On the other hand, SBP tightening is diluting the effectiveness of monetary policy due to high-level of government borrowing from the SBP. While rising security and flood-related expenditures and continued power sector subsidies are one aspect of the problem of rising fiscal deficit and ultimately rising inflation.
Of the Rs398 billion expansion in M2 till 18th December 2010 during the current fiscal year, Rs305 billion is due to government borrowing from the SBP, which has been on an increasing trend since September 2010. Such borrowing has stoked expectations of increasing inflation.
Furthermore, higher Net Domestic Assets (NDA) to Net Foreign Assets (NFA) ratio and its strong association with CPI inflation also suggest that the inflation is likely to persist at double digit levels during FY11 i.e. full year CPI expectation of 15.5 per cent. Furthermore, delay in implementation of RGST and uncertainty in timing of foreign inflows may force SBP to increase discount rate by 50bps to 14.5 per cent.

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Posted in: cent,CPI,December,fiscal,food,inflation,MoM,prices,rising,SBP,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

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

Oil import bill swells 39pc in Nov

KARACHI: Country’s oil import bill again rose 39.3 per cent YoY to $979 million during the month of November as compared to $703 million in the month of November last year, mainly because of high demand of petroleum products due to high consumption of furnace oil for power generation to meet shortfall of electricity.

According to the sector-wise trade data, in petroleum sector, the import of both crude and manufactured products went up significantly. Imports of manufactured petroleum product went rose 49.3 per cent to $578 million against $387 million witnessed in identical period last year. Similarly, crude oil import hiked 27 per cent to $401 million versus $315 million in November 09. In food group, import bill ballooned 96.1 per cent in November 2010 in which sugar import registered a hike of 734 per cent. Likewise, pulses import increased by 142.7 per cent and palm oil import bill registered surge of 58.1 per cent over the corresponding period of last year.

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Posted in: Ahmed Siddique,cent,crude,import,Karachi,Oil,oil import,shortfall,sugar,trade,YoY

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

China backs rare-earth quota-cut

Says quota cut in line with WTO

BEIJING: China defended its export controls on rare earth minerals on Thursday, saying that they were in line with World Trade Organization rules, after a government move to slash export quotas on rare earths sparked trade concerns.
China, which produces about 97 per cent of the global supply of the metals used in the production of numerous high-tech products, cut its export quota by 35 per cent for the first half of 2011 compared with a year earlier, saying it wanted to conserve reserves.
Foreign Ministry spokeswoman Jiang Yu reiterated at a regular news briefing in Beijing that the quotas were necessary for environmental protection.
“This accord with relevant WTO rules,” she said. “In the future, China will continue to supply rare earths to the international market and will take effective management steps over their export in accordance with WTO rules.”

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Posted in: BEIJING,cent,China,companies,cut,European,Jiang,that,trade,US,WTO

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