Saturday, 1 February 2014

HK conference woos capital market investors

International business community pinning hopes on current government. DESIGN: CREATIVE COMMON
KARACHI: In what seems to be a  step towards getting Pakistan’s stock market recognised, one of the leading brokerage houses, AKD Securities in association with the Karachi Stock Exchange (KSE) and Bloomberg, held the “Pakistan Investor Day” conference in Hong Kong.
This is not the first time such a conference has been held as several conferences and seminars have been organised in the past to highlight the importance of Pakistan’s capital market globally.
“This conference, which was the first of its kind in Hong Kong, introduced Pakistan and its capital markets to a fresh class of investors,” an official of AKD Securities told The Express Tribune.
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AKD and the KSE were joined at the event by some of Pakistan’s top-tier corporates including Oil and Gas Development Company, Engro Corporation, Pakistan Petroleum Limited, United Bank Limited, Fauji Fertilizer Company and DG Khan Cement.
The conference, held on January 21, was attended by leading regional asset management companies, some of which had already invested in Pakistan’s stock market.
“Pakistan is a business hub for investors and offers guaranteed returns in various sectors,” Consul General of Pakistan Ghufran Memon remarked, while discussing the macroeconomic situation along with the capital market dynamics.
AKD Securities Director Research and Business Development Naveed Vakil believed that the conference paved the way for foreign investors, who were keen to explore different fields in Pakistan.
“The international business community participating in the conference is pinning its hopes on the current PML-N government, which, it believes, can play a vital role in stabilising the economy,” Vakil said.
AKD Securities CEO Farid Alam commented that the conference was not only welcomed by the foreign delegates, but it also provided a concrete platform for opinion leaders to interact with Pakistani businessmen.

Wathra takes over as acting SBP governor

He was deputy governor at the central bank.
ISLAMABAD: The State Bank of Pakistan (SBP) has appointed Ashraf Wathra, a banker with a wealth of international experience, as acting governor, the finance ministry said on Friday after the central bank’s previous chief resigned.
The change in leadership comes at a time of gas and electricity shortages and deteriorating law and order situation that have hampered growth and contributed to falling foreign investment in the country.
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Yaseen Anwar stepped down as central bank chief on Thursday, citing personal reasons, with some officials pointing to policy differences between the governor and the finance minister.
“Anwar’s resignation has been accepted and Ashraf Wathra, the deputy governor, will be the acting governor,” said Shafqat Jalil, a finance ministry spokesman.
Anwar and Wathra were not immediately available for comment.
The $255 billion economy grew 3.6% in the last fiscal year, below the target of 4.3% and well below growth rates of around 9% seen 10 years ago. Unemployment is officially at 6.3% but is probably much higher.
Anwar was appointed the central bank chief in July 2011 after Shahid Kardar stepped down. Kardar’s predecessor, Salim Raza, resigned after 16 months in office.
Wathra brings 35 years of commercial and investment banking experience to his new assignment and has worked at Emirates Bank International, American Express and ANZ Grindlays Bank.

Room for investment: Education and then technology, says Intel chief

Country manager Siraj asks govt to set concrete goals and achieve them. PHOTO: FILE
ISLAMABAD: 
Intel Corporation, a leader in silicon innovation, is keen to invest in Pakistan but is looking at the government to set concrete goals and focus on educating the masses before it takes that step.
This was stated by Intel Pakistan’s Country Manager Naveed Siraj in an exclusive interview with The Express Tribune.
The official believed that education should be the government’s priority, without which there would be less scope for Intel to invest in Pakistan.
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“We would start the investment soon but the government needs to set goals — especially in the education sector,” said Siraj. “Look at China and India and see how far they have progressed.”
The Intel official spoke after the conclusion of Intel’s 10th annual National Science Fair in Islamabad on Wednesday, talking about his firm’s corporate social responsibility (CSR) initiatives and about using “Information Technology (IT) as an accelerator for national growth.”
“Countries such as India and China where Intel has invested in wafer fabrication facilities in the recent past have a long history of investing in education. These countries also have a tradition of strong academia-industry linkages.”
Siraj stressed on education as a common denominator for all countries that have progressed, pointing out that a lesson was to be learnt from the examples. “Pakistan’s poor education indicators are a serious cause of concern but they also provide a premise for Intel to invest in the country’s education sector.”
This premise is reflected in Intel Pakistan’s CSR programmes which include teacher training, adult IT literacy and the annual US-based International Science & Engineering Fair (ISEF), for which Pakistani students qualify through an elaborate series of local science fairs.
More recently, Intel Pakistan is focusing on “women empowerment and girls’ education” through its existing CSR projects, Siraj said.
“But, like most private-sector representatives, their efforts will eventually be limited to business objectives. The government will have to do the heavy lifting.
“The private sector needs to continue to invest and increasingly we see the government’s intention to speak with the private sector. But, in the end, it depends on whether the government sets the goals and achieves them.”
He said he was “cautiously optimistic” that the new government will try to improve economic indicators and drive investment.
“When the government starts delivering results, the IT sector would perhaps be the first movers for new investment.
“Technology can be leveraged to achieve education goals but there are some major impediments to technology use. From a Pakistani perspective, our biggest predicament is that a major segment of our population is deprived of devices due to lack of affordability. The lack of universal broadband access adds to the challenges.”
The Intel Pakistan chief said the official Universal Service Fund, which is dedicated for developing telecommunication infrastructure in “unserved and underserved areas,” needs to be made more effective. Similarly, broadband services needs to be pervasive and be offered at competitive prices, Siraj said.
‘Women, rural communities need to be invested in’
The official was of the opinion that the free laptop scheme for high-achieving students in Punjab, which drew criticism when it was first launched, was a step in the right direction with one caveat.
“But there needs to be subsidies for other segments of society especially women and rural communities. The government should keep on encouraging high-achiever students, but also incentivise a larger cross section of society to be able to afford devices.”
Intel-powered tablet PCs were introduced in the Pakistani market in 2013 and Siraj said the response has been “very interesting.” He said the tablet PCs could “have a transformational impact on device users in Pakistan in terms of computing, being able to connect and then get content.”
Device affordability and connectivity can also lead to use of unconventional learning methods, such as web-based learning and Massive Open Online Courses, in Pakistani schools to improve children’s analytical skills.
“All I am really interested in is that a particular teacher in, let’s say, Vehari is able to show online courses to students and preferably each student has an affordable device to follow the lesson.
“Such web-based courses can also be used to impart entrepreneurship skills to students and help them become job creators instead of job seekers, he said.
For the future, Siraj said the arrival of 3G services might open up avenues for technology investment in Pakistan. He said he believes the rural communities could also be a “game changer” for Pakistan’s future IT landscape.
“A lot of IT services are urban-oriented but our agriculture and farm-produce tasks are mostly done manually. Those processes can benefit tremendously from IT services

Govt leaves petrol, diesel prices unchanged

Increases petroleum levy to absorb impact of price reduction. PHOTO: RIAZ AHMED/EXPRESS
ISLAMABAD: The government on Friday kept prices of major petroleum products unchanged for February, contrary to the recommendation for price reduction given by the industry regulator and depriving the consumers of a significant relief.
It increased the petroleum levy in order to absorb the impact of reduction in oil prices.
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A day earlier, the Oil and Gas Regulatory Authority (Ogra) had proposed a major reduction in oil prices in line with the global market trend, but the government left unchanged prices of petrol and high-speed diesel (HSD), the main oil products.
However, prices of kerosene oil and light diesel oil (LDO) were reduced. “Kerosene oil is used where liquefied petroleum gas (LPG) is not available whereas LDO is consumed in industrial units but not on a large scale,” an official commented.
In a summary sent by Ogra to the petroleum and finance ministries on Thursday, the regulator had suggested a reduction of Rs3.04 per litre in the price of petrol, Rs4.48 in high octane blending component, Rs5.27 in HSD, Rs4.50 in kerosene oil and Rs4.28 in LDO.
However, according to sources, Finance Minister Ishaq Dar, who met Prime Minister Nawaz Sharif on Friday to discuss the oil prices, opposed any reduction because of financial constraints being faced by the government.
Dar was of the view that they had already given over Rs5 billion in subsidy by keeping oil prices unchanged in January instead of increasing them, and now the impact of lower prices should be absorbed in the petroleum levy.
Therefore, the prime minister decided to leave unchanged prices of petrol and diesel, which are consumed on a large scale especially in vehicles and agriculture sector.
According to officials, the government has enhanced the rate of petroleum levy to the budgeted level. The levy on petrol stands at Rs10 per litre, diesel Rs8, kerosene oil Rs6, HOBC Rs14 and LDO Rs3.
“On petroleum products, consumers are paying two taxes – general sales tax and petroleum levy,” the official said.
The petroleum levy was imposed to collect money for investment in developing the oil sector, but this had been utilised to bridge the budget deficit, he said.
According to a statement issued by the finance ministry, during meeting with the prime minister, it was decided that prices of kerosene oil would be reduced by Rs1.24 and LDO by Rs1.02 per litre while prices of petrol, HOBC and HSD would remain unchanged for February.
Petrol, HOBC and HSD will be sold at the current prices of Rs112.76, Rs141.23 and Rs116.75 per litre respectively. Kerosene oil will be sold for Rs106.76 per litre compared to Rs108 in January and LDO will be available at Rs100.22 per litre against Rs101.24 earlier.
The official pointed out that after the fresh revision in petroleum levy, the subsidy on petroleum products had come to zero. However, the finance minister claimed that in order to maintain the prices of petrol, HOBC and HSD, the government would have to bear a subsidy of around Rs1 billion

Credit share: NBP leads market in agriculture lending

The State Bank of Pakistan (SBP) has set the agriculture loan disbursement target at Rs360 billion for fiscal year 2013-14. In the first half of the year, banks disbursed Rs159.3 billion of the annual target. PHOTO: FILE
KARACHI: 
It is a pity that the share of agriculture — which employs 45% of the country’s labour force — in the outstanding loans to private-sector businesses was only 8.7% at the end of 2013.
In fact, the lack of enthusiasm on the part of banks is so pronounced that the central bank has to set annual targets for each bank for agriculture loan disbursement.
The State Bank of Pakistan (SBP) has set the agriculture loan disbursement target at Rs360 billion for fiscal year 2013-14. In the first half of the year, banks disbursed Rs159.3 billion of the annual target, meaning they achieved 44.2% of the target in the first six months.
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“Agriculture is one of the most profitable segments for National Bank of Pakistan (NBP),” NBP Executive Vice President Shaheryar Qaisrani told The Express Tribune in a recent interview.
The disbursement target for NBP for 2013-14 is Rs59 billion. It disbursed Rs29.8 billion, or 50.5% of the target, in the first half of the year. The performance of NBP is impressive because only 12 out of 29 banks and other financial institutions could achieve over 50% of their annual disbursement target in the first half.
However, NBP’s performance seems outstanding in the last six months if viewed in absolute terms. The disbursement target that the central bank has set for NBP constitutes one-third of the amount that the big five commercial banks have to lend to farmers in 2013-14.
Other big banks with notable agriculture loan disbursement targets include Habib Bank (Rs38 billion), MCB Bank (Rs32 billion), Allied Bank (Rs28 billion) and United Bank (Rs23 billion).
“The mere fact that the SBP has set the highest agriculture loan disbursement target for us reflects that the central bank trusts the NBP and its wide branch network that exists in all parts of the country,” Qaisrani said.
Indeed, SBP data shows NBP went above its agriculture loan disbursement targets by 3.4%, 6% and 19.5% in the last three years respectively.
Almost 88% customers of NBP’s agriculture segment are based in Punjab while the share of Sindh-based customers is 11%, he noted, adding average loan size is slightly less than Rs200,000.
Bad loans
But what about the non-performing loans (NPL), which typically increase with the rise in credit disbursement? NPLs of NBP in the agriculture segment stood at 4.6% as opposed to the sector-wide average of over 13%.
This is despite the fact that the outstanding loans extended by the NBP amounted to a hefty Rs59.6 billion at the end of December 2013, which is 58.4% of the total outstanding agriculture loans of the big five banks.
In terms of outstanding agriculture loan, the NBP is second only to Zarai Taraqiati Bank (ZTB), which is a specialised bank with outstanding loans of Rs108.7 billion at the end of 2013.
Outstanding loans of the NBP increased Rs13.3 billion, or 28.8%, in 2013 as opposed to the increase of Rs8.3 billion (8.3%) that Zarai Taraqiati Bank recorded over the same year.
“We have brought down our NPLs from over 8% in early 2011 to 4.6% by the end of 2013 despite doubling the amount of outstanding agriculture loans over the same period,” he said, adding the contribution of the agriculture business in the bank’s bottom line is roughly Rs7.8 billion now, in contrast with less than Rs3 billion at the end of 2010.

Official: Juventus sign Osvaldo on loan

Official: Juventus sign Osvaldo on loan
The Argentina-born attacker returns to Serie A after just six months in the Premier League and will continue his career at the Italian champions
Juventus have signed Southampton striker Pablo Osvaldo on loan until the end of the season, with an option to make the move permanent for a fee of €19 million at the end of his temporary spell.

The Serie A champions were keen to add some more depth to their attack as they chase their third consecutive Scudetto and head coach Antonio Conte sees the former Roma man as a valuable addition to his squad.

Osvaldo has fallen out of favour at Southampton following a training ground incident in which he became embroiled in a fight with defender Jose Fonte.

That incident saw him suspended for two weeks and he will now continue his career at Juventus as he aims to play his way into Italy's World Cup squad.

The 28-year-old joined Southampton from Roma at the start of the 2013-14 campaign and has since scored three goals in 13 Premier League appearances.

The striker previously enjoyed spells in Italy at Atalanta, Lecce, Fiorentina, Bologna and Roma, while also wearing the jerseys of Huracan and Espanyol.

He has a contract with Southampton until June 2017.

Barcelona to face Neymar court case in Brazil, lawyer says

Barcelona to face Neymar court case in Brazil, lawyer says
DIS representative Roberto Moreno claims the Catalan club will be hit with a fresh legal dispute in South America and says the company still want 40 per cent of the fee
A lawyer representing supermarket chain DIS claims the company is still owed 40 per cent of Neymar's transfer fee and insists Barcelona will face a new court case in Brazil over the controversial deal.

The 21-year-old's move from Santos to Barca last summer is already being investigated in Spain and led to the resignation of Blaugrana president Sandro Rosell last week.

But the deal is also causing a stir in Brazil, with Santos now saying they will take the player's father to court over the €40m payment revealed by Barcelona (in addition to the €17.1m fee paid to the club) and the Catalan club now look set to face further legal action from third-party owners DIS, who claim they were not paid their share.

"DIS presented a judicial lawsuit against Barcelona, Neymar, Santos and [agent] Wagner Ribeiro," lawyer Roberto Moreno told Catalan station La Xarxa on Friday. "It has been presented in Brazil and now it will be presented to the justice system in Spain."

Moreno also questioned Rosell's resignation and claimed the supermarket chain will continue to fight for the 40 per cent of the fee they say they are still owed.

"If there was no problem with Sandro Rosell, why did he resign? It's very strange," he said.

And he added: "We want that 40% from the Neymar operation. We feel very cheated by Neymar's father and by Neymar - very cheated and very sad.

"We had a lot of affection for his father and we helped both Neymar and his family. Real Madrid's offer was much better than Barca's, but DIS was never called to any of the negotiations with Madrid or Barca.

"They did it all behind our backs."