Wednesday, 28 November, 2012

KARACHI

ISMAIL DILAWAR

Despite positives like the inflow of $ 1.8billion from the United States in Augustthis year under the long-withheld Coali-tion Support Fund (CSF), the country’sfiscal deficit for fiscal year 2012-13 is ex-pected to swell by Rs 1.5 trillion or 6.5percent of the Gross Domestic Product(GDP). The official quarterly data, how-ever, shows that fiscal gap between thefederal government’s revenues and ex-penditures during July-OctFY13 set at Rs284 billion com-pared Rs 257 bil-lion of thecorrespon-d i n g

quarter last year.Latest fiscal operation numbers re-

leased by Ministry of Finance (MoF) de-pict a relatively curtailed fiscal deficit in1QFY13, thanks to the CSF.

The analysts believe that despite thesubdued 1Q numbers, the full year fiscaldeficit was likely to stand around at 6.5percent. According to Topline analystNauman Khan, this would be on the backof a likely shortfall in tax revenue, highersubsidy outlay and higher developmentexpenditures in the election year.

Khan said the full year numbers farebetter than last year deficit of 8.4 per-

cent but compares unfavorablywith last 10 years and 20

years average of 5.1percent and 5.6 per-

cent, respec-tively.

“ F u r -t h e r ,

w i t h

threats persistent on the external ac-count, financing of fiscal deficit would re-main a major concern for the policymakers, particularly in 2HFY13,” said theanalyst.

As per the latest fiscal operationnumbers, 93 percent growth in non-taxrevenue in 1QFY13 helped the deficit toremain at 1.2 percent of GDP similar tothe one registered in the same period lastyear. Receipts of $1.8 billion CSF stoodout as the single largest factor in growthin non-tax revenue, he said.

Resultantly, the government’s totalrevenue increased by 30 percent to Rs692 billion with 10 percent growth alsowitnessed in tax collections.

On the other side, total expendituregrew by 23 percent with 24 percent in-crease in current expenditure and 15 per-cent decline coming in developmentexpenditure.

Digging in current expenditure, theincrease came primarily from 76 percentincrease in debt servicing, while 82 per-cent increase was witnessed in generalpublic services (this includes subsidypayments).

Disbursement in Public Sector Devel-opment Program expenditure declined by15 percent, during 1QFY13

“With elections around the corner, weanticipate increase in the fiscal slippagesin the coming months. In our base case,we estimate revenue shortfall of ap-prox. Rs150-200 billion (though wehave not incorporated the effect of tax

amnesty scheme), while we estimate sub-sidy head to cross Rs350 billion this year.Furthermore, we foresee little chance ofcut in the PSDP as it is a potent tool togear up for next elections,” Khan said.

Though worrisome, the analyst said,the major threat comes from financing offiscal deficit with pressure existing on theexternal front.

“We expect the onus of financing thedeficit will squarely fall on the domesticsources as witnessed in the 1Q. Of Rs284billion net financing requirement, Rs285billion was provided by domestic sourceswhile foreign financing stood at (-ve)Rs1.5 billion,” Khan said.

The material change in his estimate,Khan said, may come from another roundof CSF receipts, implementation of taxamnesty scheme. On the other hand, an-other round of one-off payment in lieu ofcircular debt can further increase thedeficit,” said he.

Abdul Azeem, an analyst at InvestCapResearch, also sees the fiscal deficitclocking in at 6.5 percent during FY13.

“As per latest fiscal figures, totaldeficit during 1QFY13 of Pakistan didn’tshow any signs of recovery as it stagnantat 1.2 percent of GDP as compared tosame period last year,” he said.

However, in absolute terms, thedeficit went up by 10 percentYoY toRs284 billion from last year’s level ofRs257 billion. An initial insight would re-veal that the revenue head rose by 30 per-centYoY (Rs158 billion) in absolute terms

to 692 billion as compared to last year ofRs534 billion.

Similarly, expenditure grew by 23percentYoY (Rs185 billion) to Rs976 bil-lion as compared the corresponding pe-riod last year, that’s why the budgetdeficit still at 1.2 percent of GDP during1QFY13. Both direct and indirect taxesare showing reasonable improvement,with sales tax registering growth of 8 per-centYoY in absolute terms, as its bracketwas expanded despite stable rate.

However, in real terms tax collectionstill stays 1.9 percent of GDP same levelsas compared to last year, meanwhile di-rect tax-GDP also remained at 0.6 per-cent of GDP.

“We therefore believe that evidence ofreal growth in taxes is still lacking andonly a handful of head was defence serv-ices which can be seen outperforming asthe US collation support fund improvedthe amount of this head to Rs107 billion,”said Abdul Azeem.

Another notable rise was seen in thecollection of Gas Infrastructure Develop-ment Cess (Cess) and Petroleum Levy(PL), where cess collection was witnessedat Rs8.6 billion and PL to Rs22.8 billionduring 1QFY13.

The cash-strapped government, hesaid, was heavily relying on domesticsources, mainly the banks, to fund thedeficit during the first quarter duringwhich the said sources provided liquidityworth Rs285 billion compared to Rs262billion in the same period last year.

Fiscal deficit all set to widen by 6.5% of GDP in FY13

ISLAMABAD

STAFF REPORT

PAKISTAN State Oil (PSO)is to establish 100 Lique-fied Petroleum Gas (LPG)auto gas stations in thecountry within a year, be-

sides initiating construction of a moderncrude oil refinery in KhyberPakhtunkhawa (KP) which would becompleted within four years.

This was stated by Naeem YahyaMir, Managing Director (MD) PakistanState Oil (PSO) while addressing a pressconference here on Tuesday. He saidthat the national fuel supplying com-pany has signed a contract with PakistanNational Shipping Corporation (PNSC)for importing furnace oil from foreignports so that valuable foreign exchangecould be saved being spent on makingpayments to the foreign shipping com-panies.

Highlighting PSO”s future expan-sion strategy, Mir said that PSO in prin-ciple has decided to establish an oilrefinery is KPK, adding that the PSO hasnot violated any rules and regulationswhile signing a contract with BakriTrading Company Pakistan (Pvt.) Ltd(BTCPL).

Mr. Mir said that as part of hisdream vision for PSO, he aimed to makethe national giant an integrated energycompany by incorporating all aspects ofthe product supply chain including ex-ploration, refining, distribution andshipping. Through this, the company

will minimize dependence on foreignsupply chains and follow the model ofsuccessful companies which have inte-grated multiple supply chain aspectswithin themselves.

He also that PSO can only achievethis dream by connecting with upstreampartners, introducing innovative ideas tobeat the competition downstream andestablishing control of its own productsupply chain. Furthermore, he outlinedhis goals of establishing PSO as the lead-ing company in Pakistanwithin a periodof two years, a regional player in fouryears and a member of the ranks ofglobal oil conglomerates such asPETROCHINA, PETRONAS-Malaysia,PETROBRAS -Brazil etc within six years.

Moving forward, the MD-PSO out-lined some of the new initiatives PSOhas undertaken under his leadership in-cluding signing a Contract of Affreight-ment (COA) with Pakistan NationalShipping Corporation (PNSC) for im-porting furnace oil from foreign ports,development of a new oil tanker moor-ing point and storage facility at Hubwhich will increase national storage ca-pacity and reduce congestion at the ex-isting jetties, establishment of over 100LPG Autogas stations in the upcomingyear and agreements with PARCO,BYCO and Bakri Trading for the acqui-sition of POL products. Other majorprojects listed at the conference in-cluded establishment of a modernEURO IV capacity refinery in KhyberPakhtunwa, acquisition of a refinery inthe south of the country and setting up

a Base II lubricant refinery. He alsoplans to establish a regional JV AviationCompany in the Middle East and is look-ing to expand into the coal business inpartnership with other companies.

Furthermore, the MD stated that hehad embarked on a program of cuttingout middle-men and cost rationalizationat PSO. He stated that by eliminating theaddition of detergent additives in Mogasand Diesel, the Company would save ap-

proximately Rs. 635 Million/year, sav-ings of Rs. 450 Million/year were alsoexpected through the stoppage of warpremium insurance payments on POLproduct imports. Additionally by uplift-ing products from local sources/ refiner-ies, foreign exchange of approximately$200 Million would be saved annuallyand a further Rs. 500 Million will besaved by engaging the national flag car-rier PNSC for transport of furnace oil.

OGRA to

hold public

hearing today

ISLAMABA

ONLINE

In the backdrop of Supreme Court direc-tions, the Oil and Gas Regulatory Author-ity (Ogra) will hold public hearing today(Wednesday) in Karachi which will helpdetermine a new price formula of CNG.An official of Ogra told Online that fol-lowing the Supreme Court directions thepublic hearing was going to be held inKarachi which will be chaired by Chair-man Ogra Saeed Ahmed Khan.Official further said that Regulator willconsider all applicable suggestions of thestakeholders which will help settle on anew price formula of CNG as per the di-rections of apex court. Ogra has decidedto solicit public opinion to determine theprices of CNG for which Regulator hasbeen holding public hearing in threemajor cities of the country including La-hore, Islamabad and Karachi.Ogra held meeting on CNG price on No-vember 23 in Lahore and that kind ofsecond meeting in Islamabad on Novem-ber26 and Karachi will be the venue for apublic hearing today(Wednesday).The demand audit report of the CNG sta-tions and proposals from the regulatorwill be put forward before the massesand report which will be compiled afterthe people were approached for theiropinions, will be produced before theSupreme Court on December 5.Chairman Supreme Council CNG Associ-ations Ghyas Paracha has expressed thehope that Ogra would fix a price thatwould not become burden for the CNGstation owners and the people. Parachaalso called for reduction in CNG taxesand surcharges.

ISLAMABAD

ONLINE

\Asim Hussain Advisor to the PrimeMinister on Petroleum and Natural Re-sources has said that the Government ofPakistan has provided friendly opportu-nities to foreign investors in the oil andgas sector under the new Petroleum Pol-icy 2012.

Dr Asim Hussain stated this in ameeting with the Ambassador of Nigeriato Pakistan H.E. Mr. Dauda Danladi,who called on the Advisor here on Tues-day. The Nigerian Ambassador apprisedthe Advisor that Nigeria is enriched withoil and gas resources and it has an esti-mated 184 TCF gas reserves.

The Government of Nigeria supportsderegulation of the Petroleum Sector so

that healthy competition is encouraged.H.E. Mr. Dauda Danladi, while referringto the recent D-8 conference, empha-sized that in the spirit of mutual cooper-ation direct intervention on Governmentto Government basis is required in theOil and Gas sector. The Ambassador alsoinformed that Nigeria has establishedFree Zones for International E&P com-panies, which provides beneficial oppor-

tunities for Pakistani companies. Dr. Asim Hussain welcomed the in-

terest shown by Nigerian Government toenter into dialogue regarding possiblecooperation in the oil and gas sector.The Advisor also suggested to explorevistas of cooperation in the downstreamoil and gas sector including refining. Dr.Asim Hussain accepted the invitation tovisit Nigeria.

PSO to establish 100 LPG stationsA modern oil refinery in KP also being considered

Next gas import destination: Nigeria

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02

Wednesday, 28 November, 2012

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERUnilever Food 3960.00 4150.00 4150.00 4150.00 190.00 40Bata (Pak) XD 1491.00 1565.55 1565.55 1565.55 74.55 100UniLever Pak 9650.00 9750.00 9700.00 9700.00 50.00 40Island Textile 787.50 826.87 750.00 823.00 35.50 700Fazal Textile 212.10 222.50 222.49 222.50 10.40 400

Major LosersLinde Pakistan 156.75 157.00 153.05 153.37 -3.38 12,100Noon Pakistan 45.70 44.00 43.42 43.42 -2.28 1,000Liberty Mills XD 66.35 64.10 64.10 64.10 -2.25 1,000Shifa Int.Hospit 46.00 45.00 44.00 44.00 -2.00 4,500Clover Pakistan 77.90 79.50 74.11 76.00 -1.90 5,000

Volume Leaders

Fauji Cement 7.03 7.10 6.88 6.90 -0.13 31,705,000K.E.S.C. 5.83 6.80 6.00 6.56 0.73 28,262,000D.G.K.Cement 53.44 55.55 53.22 55.40 1.96 19,798,500Maple Leaf Cement 16.44 16.90 15.85 16.61 0.17 15,570,500Summit Bank 3.02 3.30 2.99 3.01 -0.01 10,354,500

Interbank RatesUS Dollar 96.2144UK Pound 154.2221Japanese Yen 1.1718Euro 124.6650

Dollar EastBUY SELL

US Dollar 96.90 97.40Euro 123.98 125.55Great Britain Pound 153.61 155.52Japanese Yen 1.1620 1.1764Canadian Dollar 96.23 97.93Hong Kong Dollar 12.24 12.46UAE Dirham 26.15 26.45Saudi Riyal 25.63 25.90Australian Dollar 99.91 102.60

Business

Getz Pharma donates

Rs 25m to IBA for promoting

quality education

ISLAMABAD: At a simple but impres-sive ceremony at the Institute of Busi-ness Administration (IBA), GetzPharma (Private) Limited donated Rs.25 million to the IBA for promotingquality education in Pakistan. In theceremony, Dean & Director IBA, Dr.Ishrat Husain and Managing Director &Chief Executive Officer Getz Pharma,Mr. Khalid Mahmood signed a Memo-randum of Understanding that aimed toestablish strategic partnership betweenboth the parties to promote academicand applied research in the country.This collaboration will focus on sup-porting students with financial needs tosucceed in their academic and profes-sional pursuits and will also be used inadvancing social applications of re-search and fostering the growth ofpromising students.

Debate on present

political crisis

KARACHI: A debate was organized atthe Commecs Institute of Business andEmerging Sciences on Wednesday toenable the students to voice their opin-ion about the present political crisisand the resultant economic situationwith special reference to the role of themedia and the celebrities in guiding thepopulace towards a positive or a nega-tive stance. The students participatedvery actively and delivered theirspeeches and opinion in an uninhibitedmanner and spoke for and against thetopic with a number of references andquotations to backup their presenta-

tion. Sohaib Qureshi and FarwaHus-sainwere declared the winners for the1st and 2nd position in Urdu debatewhile Hafsa Farooq and Ramis Ahsanwere declared the winners for the Eng-lish debate.

Warid Brings Double

Number Offer

KARACHI: Leading the innovationwith many firsts in the telecom indus-try of Pakistan, Warid Telecom bringsyet another exciting Double NumberOffer which allows Warid users to gettwo numbers on one SIM without car-rying two handsets or dual SIM hand-sets. All Warid prepaid customers can availthis exciting offer. Warid customerscan activate Double Number on theirexisting SIM by sending SMS SUB to3311. For more information visithttp://www.waridtel.com/products/double_number.php

UBL Funds announces

Interim Payout from Funds

KARACHI: UBL Fund Managers an-nounced an interim payout for the pe-riod-ended November 20, 2012 fromits open-end investment schemes.The Company announced a payout ofRs. 4.10 per units of par value RS. 100from its money market scheme, UBLLiquidity Plus Fund (ULPF) which

gave an year to date return of 10.44%p.a. From UBL Government Securi-ties Fund (UGSF), the Company an-nounced a payout of RS. 4.55 perunit of par value RS. 100. Thisscheme has given a year to date re-turn of 13.07% p.a. While from UBLSavings Income Fund (USIF), UBLFunds announced a payout of RS.4.40 per unit of par value of RS. 100.This scheme has given a year to datereturn of 11.61% p.a.

CORPORATE CORNER

KARACHI: PIA Board of Directors in recognition of the services rendered by the out-going

Chairman presented him with a crest as a tribute. Group photo on the occasion shows:

(Center) Air Chief Marshal (R) Rao Qamar Suleman, Chairman PIA Lt. General (R) Asif Yasin

Malik, MD PIA Muhammad Junaid Yunus with members of the BOD.

HONG KONG

AGENCIES

ASIAN markets rose in early tradeTuesday after the eurozone andthe IMF agreed to unlock 43.7billion euros ($56 billion) inloans to Greece and grant signif-

icant debt relief for decades to come.Tokyo shares rose 0.38 percent by the

break, Hong Kong was up 0.25 percent andSydney gained 0.68 percent.

Seoul opened flat but Shanghai was down0.76 percent on concerns over the strength ofrecovery in the domestic economy.

The Eurogroup of currency partnerspenned the Greek deal at its third late-nightmeeting in two weeks, agreeing to release, inDecember, the funds after months in whichGreece was starved of bailout financing.

Greece, struggling to stay afloat despite aseries of unpopular austerity measures, hasbeen waiting impatiently for an injection of in-ternational loans for several weeks to avoid de-faulting on its upcoming debt repayments.

Greece’s public creditors agreed to takemeasures to bring down the country’s debt-to-GDP ratio from an estimated 144 percent to124 percent within eight years, in exchange forthe bailout funds.

Finance ministers, the IMF and the Euro-pean Central Bank said the money would bepaid in four instalments from December 13through until the end of March.

Greek Prime Minister Antonis Samarassaid the agreement represented a fresh start forhis beleaguered country.

“Everything has gone well,” Samaras told

local media in Athens. “All Greeks have fought (for this

decision) and tomorrow is a new day for everyGreek person.” ECB President Mario Draghisaid: “The decision will certainly reduce the un-certainty and strengthen confidence in Europeand in Greece.”

US markets were feeble in the first sessionafter a slow Thanksgiving holiday week, withthe jury still out over how strong the crucialBlack Friday holiday sales were for retailers.

The Dow Jones Industrial Average finisheddown 42.31 points (0.33 percent) at 12,967.37.

The broad-market S&P 500 lost 2.86 (0.20percent) at 1,406.29, while the Nasdaq Com-posite rose 9.93 (0.33 percent) to 2,976.78.

On currency markets the euro was stronger

in Asian trade as investors breathed a sigh ofrelief over the deal for Greece.

The 17-nation currency bought $1.2980and 106.46 yen in Tokyo morning trade afterbriefly topping $1.30 for the first time in abouta month. That was up from $1.2971 and 106.38yen in New York trade late Monday, althoughthe euro eased slightly after the Greece an-nouncement.

The dollar was flat at 82 yen.On oil markets, New York’s main contract,

West Texas Intermediate (WTI) for Januarydelivery, bounced 30 cents to $88.04 a barreland Brent North Sea crude, also for January,jumped 29 cents to $111.21.

Gold was at $1,749.50 at 0310 GMT com-pared with $1,734.47 late Monday.

Asian markets rise on Greece deal

NEW YORK

AGENCIES

The euro traded in a narrow range against the dollar Mon-day in a nervous market awaiting the outcome of a meetingof Greece’s creditors on crucial aid for the debt-crushedcountry.

The euro bought $1.2971 at 2200 GMT,slightly down from $1.2973 at the sametime Friday.

The euro fell against theJapanese currency, to106.38 yen from 106.90 lateFriday, while the dollar fell to81.98 yen from 82.60.

The eurozone and the Inter-national Monetary Fund battledlate Monday in Brussels undermounting pressure to conclude along-delayed deal on immediatefunding to avert bankruptcy forGreece.

With creditors struggling to agree onhow to tackle the country’s ever-growingmountain of debt over the medium term,the aim was to get short-term financing tapsswitched back on. The pressure grew over theday, with the European Union’s euro commis-

sioner Olli Rehn deeming it “essential” to reach a deal be-fore the talks broke up.

“Following last week’s unexpected failure to come to anagreement, people aren’t exactly sure what to expect fromtoday’s meeting,” said Benjamin Spier at DailyFX.

The British government’s surprise nomination of Cana-dian central bank chief Mark Carney as the new Bank of

England governor, had little impact on the market, saidSebastien Galy at Societe Generale.

Carney will take over from MervynKing, who has led the BoE since 2003

and is due to step down on June30.

“By leaving the BoC andtaking the head seat at the

BoE, Carney bringswith him the expe-rience of rebuild-

ing an economy thatrebounded faster than

all other G8 nations whilemaintaining a strong AAA

rating with the rating agencies,”said Neal Gilbert at GFT. The dol-

lar was virtually unchanged at0.9278 Swiss francs from 0.9279 late

Friday, while the British pound fetched$1.6026, down from $1.6033.

LAHORE

STAFF REPORT

Zong the international brand of China Mobileand Huawei - a leading global information andcommunications technology (ICT) solutionsprovider have established a state-of-the-artGSM laboratory and training center at Na-tional University of Science and Technology(NUST) to liaison with the telecom industry’sneeds by creating a bridge between the acade-mia and the corporate world.

With the expertise of China Mobile Pak-istan and Huawei’s investment of US$ 1.3 mil-lion in hardware, the GSM laboratory will be

providing exposure and hands-on experienceof operating high-tech GSM equipments whichcan be used as platform for further Researchand Development (R&D) for Value AddedServices (VAS). This lab is to be used for studypurposes; the lab is a complete telephone net-work including a GSM mobile infrastructurewith one MSC, one BSC and one BTS, HLR andmedia gateway.

The lab will also provide the platform fordevelopment of software, tools and patches toremove discrepancies. It will familiarize stu-dents with the fault, configuration, security,network performance management of telecominfrastructure.

ZONG ESTABLISHES GSM LABEuro steady as tradersawait Greek rescue deal

KARACHI: Allamah Rasheed Turabi Foundation & Trust President and renowned research scholarAllahmah Dr Salman Turabi addressing at Majlis-e-Aza held by Anjaman-e-Parcham-e-Parcham-e-Abbasunder the topic ‘Imamate and Guidance’ in connection with the central speeches of second Ashra-e-Muharram at Islamic Research Centre Karachi.

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