Category: Business

ISLAMABAD: Pakistan LNG Ltd has launched a mid- and a long-term tender to purchase a combined 240 shipments of liquefied natural gas (LNG), the company said on its website.

The mid-term tender covers a period of five years and calls for 60 shipments, while the long-term tender is for 15 years and 180 cargoes, according to information presented in the tender note.

Suppliers must submit bids by Dec 20.

A LONG journey might be about to end for Abraaj Group, the Dubai-based private equity fund that had made the bold move of acquiring a majority stake and management control in the beleaguered Karachi Electric Supply Company back in 2009. Those were troubled days as everyone remembers, when the first-ever privatisation of a power utility in Pakistan was floundering. Nobody really understood what Abraaj was up to and the move was met with a heavy dose of scepticism at the time. The new management took control at a time when the utility, renamed K-Electric, had been abandoned by its management, rolling blackouts in Karachi were a daily occurrence and a bruising battle with the state-owned power utility Pepco, which supplied almost half of the city’s power, had just seen a massive disconnection that cut off the power supply to the entire city.

Given the circumstances in which the acquisition was made, the positive track record of the Abraaj-led team must be acknowledged. It has restored the utility to profitability and brought load-shedding under control, even if through the morally dubious policy of increasing the incidence of load-shedding in areas that had been designated by it as ‘high loss’. They have weathered some powerful storms along the way, from rains and heatwaves that led to prolonged blackouts, labour unrest and more bruising conflict with government departments that did not pay their bills, to clashes with the Ministry of Water and Power. But to its credit, unlike the management that preceded it, the team did not give up and persevered through it all to reach this point.

Now comes the time for Abraaj to enjoy the fruits of its efforts, and the prize is a substantial one at $1.7bn for divestment of its 66.4pc stake, described by Abraaj as “one of the largest private-sector transactions in Pakistan”. At this time, it is imperative to bear in mind that there is a strong and abiding public interest in this transaction. So even though it is a ‘private transaction’, there is a significant role for public authorities to play. The public interest lies in determining whether the improvement in the utility’s affairs is being evenly experienced by all segments of the city’s population or whether it is a reality only for the elites whose neighbourhoods have seen an uninterrupted supply of power and the bulk of the investment made in system upgrades during the last seven years. It is also in ensuring that the new investor, Shanghai Electric Power, has the capacity to operate in Pakistan, where some amount of transparency and disclosure is the norm. The deal is still subject to approval from the state, and these matters ought to be thoroughly vetted before the Abraaj management is allowed to walk off with its prize.

LAHORE – All Pakistan Cement Manufacturers Association (APCMA) has asked the government to avoid disruptive policies that impact construction growth in the country as the cement industry growth in directly linked to speedy execution of infrastructure projects in the country.

“Industry hopes that the slow growth in domestic consumption in September 2016 is a one off phenomenon, triggered by the new property valuation policy of the government.
It expects the domestic consumption will pick up once the valuation issue is settled or factored in by the investors,” the APCMA spokesman said.

The association urged the government to take further measures to encourage domestic construction sector which is the main source of employment to the non-skilled workforce of the country.
According to data released by APCMA, during the first quarter of current fiscal year, the cement industry has posted a growth of 9.
50 percent in local despatches compared with local despatches during first quarter of last fiscal year.
Exports also recorded a growth of 3.
03 percent compared with exports during the first quarter of last year.
The overall situation during first quarter of current fiscal year showed an 8.
33 percent growth compared to the same period of last fiscal year.

During first quarter – July-September 2016 – the cement industry despatched 8.
976 million tons of cement, while during the corresponding period of July-September 2015 the total despatches were 8.
286 million tons.
Capacity utilisation during the first quarter of this fiscal is 79%, an increase of 7% compared with corresponding period last year.

The APCMA spokesman said that domestic despatches in September 2016 were 2.
536m tons registering a growth of 2pc while the exports amounted to 0.
523m tons reflecting growth of 11.
79 percent, compared to Sept2015.

Total cement despatches in September amounted to 3.
059 million tons depicting a growth of 3.
55 percent.

LAHORE – As many as 44 representatives of 25 countries on Tuesday visited the Lahore Chamber of Commerce & Industry (LCCI) and had an interactive session with the private sector representatives.

China-Pakistan Economic Corridor (CPEC), Kalabagh Dam, regional trade, energy, women empowerment, Orange Train project and bilateral trade with African region were the topics that came under discussion.

LCCI President Abdul Basit said that CPEC was a game-changer project for Pakistan and its generations.
CPEC was part of One-Belt-One-Road plan to establish close land and maritime links among 60 plus countries across Asia and Europe.
Its motivating force is prosperity and the partner countries are focusing on investment in our region, he said.
He added that once it is complete, it is estimated that the volume of intra-trade among these countries would reach $2.
5 trillion.

The LCCI president said that Gwadar Port is going to play the pivotal role in development of Western region of China, adding the infrastructure development currently going on in Pakistan in major areas like power sector, roads and railways network etc has kick-started the process of economic recovery.
These projects will accelerate investment, trade and economic growth in Pakistan, and help to stabilize the country, he maintained.

“We believe that greater success cannot be achieved without fullest participation of the private sectors from both countries especially engaging small and medium-sized enterprises.

“We want our government to ensure that Pakistani companies are given more opportunities to interact closely with Chinese companies so that there is a win-win situation for everyone,” Abdul Basit said.

Abdul Basit said: “We are known as resilient nation and we have learnt the art of surviving in any situation.
Some experts predict that in next 20 years, Pakistan will fall among the trillion dollar economies.
” Through right policies, Pakistan can become a regional trade and energy corridor, he added.

LCCI Vice President Nasir Hameed Khan said that growing gap between revenue and expenditure has increased the vulnerability of fiscal framework, requiring the federal and provincial governments to tighten belt with a view to putting economy on track.

He said that the LCCI was making all-out efforts to give boost to business and economic activities in the country.
To achieve the goal, it is holding seminars and inviting foreign delegations to Pakistan, he added.

Head of the delegation Brig Hammad spoke about the importance of the private sector for the economic turnaround of the country while the visiting diplomats also asked a number of question ranging from economic situation of the country to the LCCI role.

LCCI former president Sohail Lashari, Executive Committee members Mian Zahid Jawaid, Tahir Manzoor Chaudhry, Shahid Nazeer, Moazzam Rasheed, Javed Iqbal Siddiqui and former Executive Committee Member Kamal Mahmood Amjad Mian were also present in the meeting.

ISLAMABAD –  The Economic Coordination Committee of the Cabinet on Monday approved the issuance of second revised government of Pakistan sovereign guarantees up to Rs30.
612 billion for the 425 MW Nandipur power project.

The ECC gave this approval after detailed briefing by the Ministry of Water and Power.
These guarantees will remain valid till May 31, 2017.
Federal Minister Ishaq Dar chaired the meeting of the ECC here at the Prime Minister’s office.

The ECC considered and approved the summary moved by the Ministry of States and Frontier Regions for the provision of 50,000 metric tons of wheat costing Rs2.
007 billion to the United Nations World Food Program for the temporarily displaced people of FATA and Khyber Pakhtunkhwa.
The approved quantity will be distributed to the target population from December 2016 to June 2017.
It is worth mentioning that the quantity is the second such approval after the provision of 124,000 metric tons of wheat costing Rs4.
977 billion to the displaced population; the stocks from the earlier grant will be exhausted in November as reported by the World Food Program.

In view of the growing needs of the country for energy, ECC considered and approved the proposal, sent by the Ministry of Petroleum and Natural Resources, for the setting up of the LPG air mix plants at Murree (Kurbagla, Dewal, Company Bagh and Tret), Awaran and Bella at an estimated cost of Rs1353.
29 million to be funded by the respective gas utility companies (SSGC and SNGPL) through their own resources.
For the housing colonies, the private sector is free to establish their own LPG air mix plants subject to the fulfillment of all codal formalities such as OGRA licensing, explosive licenses etc.
It was also decided that in addition to the above mentioned plants 30 new air mix plants each on SSGC and SNGPL systems will be constructed in the areas of AJK, Chitral, Gilgit Baltistan and backward areas of Balochistan as the development of these areas is the first priority of the government.
The setting up of the LPG air mix plants will save these areas from the rapid deforestation in these areas.

ECC also approved and ordered the notification of the PNC for the LNG supplies from Malaysia, Russia, France, Italy, Oman and Azerbaijan in the wake of the growing demand of energy in the country.
ECC also decided that the PNC will engage with all the energy supplying companies in the process to finalise the best deal for the country.

ECC also approved the proposal by Ministry of Water and Power for utilisation of power generated through captive power plants, as a short term measure, in order to optimize use of available generation in the coming summers of 2017 and 2018.
The measure taken by the Ministry will add around 300-600MW power to the national grid on the following conditions: plants having capacity of 03MW or above on gas, furnace oil, coal, bagasse and other fuels/sources will be offered energy purchase under this policy.
Tariff shall be based on take and pay basis and electricity actually delivered to the national grid.
These plants shall not be entitled for any capacity charges/payments.

ISLAMABAD: Mobile broadband users’ growth in Pakistan is expected to touch eight per cent mark in coming years as the country would have more than 40 million smartphones by end of this year.

The third-generation (3G) and 4G mobile phone users stand at around 30 million and continue to grow, creating a huge demand for smartphones, which is the top selling category across all major e-commerce platforms.

Publicly available data shows mobile phone imports in terms of value and not in units, making it difficult to figure out category-wise imports. However, market sources say less than 20pc of Pakistan’s monthly mobile phone imports comprises smartphones.

This equation though is likely to change in a couple of years, they added.

Pakistan’s e-commerce market is still in its infancy and represents only five per cent of conventional retail trade. However, the overall size of this fast growing segment has come close to $100 million, up by two-thirds from $60 million as of 2014.

A bulk of the country’s e-commerce transactions originate from Karachi, Lahore, Islamabad and Rawalpindi, which comprise about 50pc of customers. The remaining customer base is very thinly split between cities and towns nationwide.

With telecom operators rolling out 3G and 4G services in semi-urban and rural areas of the country – which usually don’t have outlets for branded products – the e-commerce market is likely to benefit a great deal.

According to a report by marketing firm GfK, the smartphone industry worldwide will grow by 6.6 per cent this year, backed largely by a thriving Chinese market.

For the future, the markets which will drive the most success are again likely going to be developing ones, namely Emerging Asia at eight per cent, and Central & Eastern Europe with a growth rate of 10pc.

The world’s largest market, China, grew by 15pc this year, the highest growth rate in any region, accounting for a third of all phones sold. However, this streak may be about to end, with operator subsidies set to end next year, which may result in a 3-percent decline in sales.

Other markets such as Middle East and Africa, Central and Eastern Europe (Russia and Ukraine) and Emerging Asia managed decent growth levels too.

In the Western world, the phone sales remained largely the same, though, as they did in Developed Asia (Hong Kong and Japan) while Latin America shrunk by four per cent.

Overall, the total sales value generated by the market will amount to a mammoth $ 421.8 billion, up from $398.1 billion last year (six per cent).

Again, it is China which backed most of that growth with $131.2 billion, followed by North America ($72.7 billion) and Western Europe ($53.6 billion), which is not really a surprise.

Pakistan Telecommunication Authority (PTA) in its latest report said Next Generation Mobile Services (NGMS) auction 2014 was very successful as broadband subscriptions have shown a growth of over 1900pc during June 2014 to July 2016.

Increase in the number of broadband subscribers has also pushed the total data used on the mobile networks: jumping from a mere 1,964 TBs in month of June 2014 to a massive level of 39,821 TBs in July 2016.

Mobile data usage is expected to increase further in future due to surge in usage of data hungry next generation services and applications over mobile networks.

In order to meet the growing data needs in the market, mobile operators are to have strategies for more spectrum acquisition and optimisation of their network.

SAN FRANCISCO: Uber on Thursday laid out a vision for on-demand aircraft that can whisk commuters to home or work in a fraction of the time it would take on the road.

The ride-sharing giant assessed the feasibility of what it called “vertical take-off and landing” vehicles in a 98-page white paper, inviting innovators and entrepreneurs to take flight with the idea. The company said it will be reaching out to cities, manufacturers and others about the concept.

“Just as skyscrapers allowed cities to use limited land more efficiently, urban air transportation will use three-dimensional airspace to alleviate transportation congestion on the ground,” said the white paper.

“A network of small, electric aircraft that take off and land vertically will enable rapid, reliable transportation between suburbs and cities and, ultimately, within cities.”

NEW YORK: General Electric is in talks to buy oilfield-services company Baker Hughes in a deal that could be the US industrial giant’s biggest, The Wall Street Journal reported Thursday.

GE had approached Baker Hughes about a takeover, the Journal said, citing people familiar with the matter. Details about the talks could not be learned and the negotiations may not produce an agreement, they said.

Baker Hughes, based in Houston, Texas, has a market value of $23 billion, and could fetch more than $30 billion in a takeover, given the typical premium, the newspaper said.

GE has a market value of $259 billion.

Baker Hughes had struck a deal to be acquired by Halliburton for $34.6 billion in 2014. But the transaction died in May after the Justice Department filed a lawsuit to block the proposed merger on antitrust grounds.

GE is a sprawling industrial conglomerate with 333,000 full-time employees worldwide. Based in Fairfield, Connecticut, the company has businesses in the oil and gas sector, including surface and subsea drilling and production systems, and equipment for floating production platforms.

A takeover of Baker Hughes could dwarf GE’s acquisition of French company Alstom’s power and grid businesses last year for 9.7 billion euros ($10.6 billion).

LAHORE –  Economic activity in the manufacturing sector expanded in October 2016 (which covers Aug-Sept 2016 period) at a slower pace than in August (covering Jun-Jul 2016 period).

The PMI for the month of October registered a value of 63.
51, a decrease from August’s reading of 64.
67.
As a rule of thumb, a reading of 50 or above indicates that manufacturing activity and the overall economy expanded.According to company executives surveyed in the MCB Bank Purchasing Managers Index (PMI), the manufacturing sector has got to off to a good start, increasing on a year-on-year basis by 2.
62% YoY in July FY17.
With improvements in energy availability and lower input prices, supply conditions for manufacturing firms have also improved.
On the downside, however, declining exports continue to weigh in on growth prospects.
Pakistan’s exports declined by 9.
08%, in dollar terms from July – Sept FY17 when compared with the corresponding period of the previous fiscal year.

The October MCB Bank PMI indicates that manufacturing activity continued to grow for the 17th consecutive reading but at a much slower pace compared to August.
New orders increased at a slower pace, registering an index value of 73.
89, compared to 74.
72 in August.
Meanwhile, the Production Indexdecreased0.
83 points to 68.
06.
Inventory levels decreased by3.
06 points to 56.
66 (previously registered at 59.
72).
Therefore, new orders and production grew at a slower pace than before while manufacturers increased inventories at a slower pace which reflects slightly slower pace of growth in demand.

Supplier deliveries were slow at 53.
33 compared to an index value of 54.
44 in August.
A reading of below 50 indicates faster deliveries and a potential cooling down of the economy and vice versa.
Employment in the manufacturing sector also grew at a slower pace, registering a value of 53.
33 from an earlier value of 54.
44.

The Prices Paid and Prices Received indices both pointed to an overall increase in price levels (with index values above 50 for both) which corroborates with Pakistan’s current inflation dynamics.
CPI Inflation has experienced a reversal since bottoming out in September 2015 at 1.
32% YoY and currently stands at 3.
88% YoY for the month of September 2016.
Prices Paid Index stood at 61.
11, unchanged from August which indicates that prices paid increased at a stable rate.
YoY WPI Inflation was registered at 3.
4% YoY in September, almost unchanged from 3.
5% YoY in August.
The Prices Received index decreased 1.
67 points to 66.
39.

Overall, the manufacturing sector still remains on a moderate rate of growth and this indicates an uplift of the general economy.
Manufacturing PMI serves as a leading indicator of economic activity as health of the manufacturing sector is typically highly correlated with future GDP levels.

KARACHI –  Standard Chartered Bank (Pakistan) has announced its results for third quarter and first nine months of 2016, declaring profit before tax (PBT) of Rs 12.
1 billion.

The Bank delivered resilient financial performance despite margin compression due to lower interest rates.
On the liabilities side, the bank’s total deposits grew by 9 percent since the start of this year.
The continuous increase in low cost deposits has significantly supported the bank’s performance with current and savings accounts comprising 93 per cent of the deposit base.