tag:blogger.com,1999:blog-5848640164815342479.post8011701613236270120..comments2024-03-18T16:01:13.871-07:00Comments on Haq's Musings: Pakistan FDI Soaring With CPEC Energy & Infrastructure Projects Riaz Haqhttp://www.blogger.com/profile/00522781692886598586noreply@blogger.comBlogger57125tag:blogger.com,1999:blog-5848640164815342479.post-86378906325477183212019-08-06T07:12:38.823-07:002019-08-06T07:12:38.823-07:00#IMF Official: #CPEC #energy #infrastructure proje...#IMF Official: #CPEC #energy #infrastructure projects have helped #Pakistan deal with acute shortages of power. She said the #debt sustainability analysis showed that CPEC loans were manageable, but the country’s overall debt situation was not sustainable. https://www.dawn.com/news/1498260<br /><br />The International Monetary Fund (IMF) said on Monday that it had full access to borrowing and maturity terms of the China-Pakistan Economic Corridor (CPEC) projects and its loans were manageable.<br /><br />Addressing Senior Journalists’ Forum at the National Press Club, IMF resident representative in Islamabad Teresa Daban Sanchez counted issues relating to the Financial Action Task Force (FATF), provincial spending behaviours and insufficient parliamentary strength of the government as key risks to its $6 billion 39-month bailout programme.<br /><br />She said Pakistan had shared full details of CPEC loans with the IMF, adding that CPEC was mostly private sector investment in energy and infrastructure. In reply to a question, the IMF official said energy projects had no doubt helped the country deal with acute shortages of power and this was a very positive aspect. She said the debt sustainability analysis showed that CPEC loans were manageable, but the country’s overall debt situation was not sustainable.<br /><br />Responding to a question, Ms Sanchez said fiscal consolidation and revenue mobilisation, market-based exchange rate and social sector protection were three basic pillars of the new IMF programme, adding that fiscal consolidation should be revenue-oriented to deal with the problems of fiscal deficit because the country had a very low tax-to-GDP ratio and needed to increase revenue which was being done through removing tax exemptions and privileges.<br /><br />The IMF official said there was a strong need for greater coordination with the provinces to ensure that they spent less and provided budget surplus to the federal government. She said the IMF did not place any condition to bring changes in the National Finance Commission’s resource distribution formula, but it did get a commitment of fiscal federalism under a memorandum of understanding signed by the federal and provincial governments on revenue surplus and harmonisation of taxes for improved revenue collection.<br /><br />Ms Sanchez said one of the most important pillars of the IMF programme was the market-based exchange rate, with the central bank in the background, to achieve price stability through forward looking actions to deal with inflation.<br /><br />Speaking about key reforms in the programme, she enumerated implementation of financial management to instill fiscal discipline in the public sector, autonomy to the central bank, energy sector improvement, strengthening of anti-corruption agencies and compliance with the FATF.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-68091731314845564192018-03-21T07:12:25.292-07:002018-03-21T07:12:25.292-07:00#Pakistan #FDI surging. Expected to reach $3.7 bil...#Pakistan #FDI surging. Expected to reach $3.7 billion in fiscal year 2017-18 ending in June 2018. #CPEC #China #Investment<br /><br />https://www.reuters.com/article/us-pakistan-economy-investment/pakistan-fdi-seen-surging-but-some-western-investors-fret-over-chinese-influence-idUSKBN1GX0QO?il=0<br /><br />Pakistan expects net foreign direct investment (FDI) to jump about 60 percent in 2017/2018, the chairman of Pakistan’s Board of Investment said, but some Western investors appear to be put off by China’s growing influence in the South Asian nation.<br /><br />Chinese companies are building roads, power stations and a deep-water port in Pakistan after Beijing offered more than $50 billion in funding for Pakistani infrastructure as part of China’s vast Belt and Road initiative.<br /><br />Chinese investment has helped spur Pakistan’s economic growth to more than 5 percent, its highest in a decade, while also increasing Beijing’s clout in Pakistan at a time when Islamabad’s relations with the United States, an historic ally, are fraying over Pakistan’s handling of Islamist militants and the conflict in Afghanistan.<br /><br />Naeem Zamindar, a state minister responsible for promoting foreign investment in Pakistan, said some Western investors appeared reticent because of an incorrect perception that Chinese companies would get “exclusive advantages” and concessions that would not allow for an even playing field.<br /><br />“A perception was created that the Chinese are taking over. The fact of the matter is that this is not true,” Zamindar told Reuters in his office in Islamabad.<br /><br />“Pakistan’s government is very clear about it: we want investors of all hues to come in and participate in building this economy - whether American, English or Japanese.”<br /><br />Zamindar said some Chinese companies building power stations had obtained soft loans but that was because the money was provided by Beijing, which made such terms a condition of its financing for projects that were part of the China-Pakistan Economic Corridor (CPEC), a key leg of the Belt and Road infrastructure network.<br /><br />But for the second phase of CPEC, in which a series of Special Economic Zones (SEZs) will be set up to boost Pakistan’s industries, Chinese companies will not receive preferential treatment, Zamindar added.<br /><br />“That is completely non-discriminatory,” he said, adding that Pakistan’s Special Economic Zones Act stipulates no country or company will get preferential treatment within the SEZs.<br /><br />“The (SEZ) concessions are published and are on the website, open to all.”<br /><br />Zamindar said net FDI for the financial year 2017/2018 (July-June) is expect to reach about $3.7 billion, with Chinese companies providing up to 70 percent of the new investment.<br /><br />Net FDI has been gradually rising since 2014/2015, when it plummeted to less than $1 billion. It rose to $2.3 billion last year, according to central bank data.<br /><br />Foreign direct investment is separate from the China-Pakistan Economic Corridor investments. More than 20 CPEC projects worth nearly $27 billion are currently being implemented, a senior government official told Reuters, meaning either work has begun on the projects or financing deals have been completed.<br /><br />Zamindar said militant attacks were sharply down in recent years and security was much improved, but some investors are unaware of this and had an outdated “negative image” of Pakistan.<br /><br />Yet overall interest in Pakistan had jumped, Zaminder said, and he would tour Britain, the United States, France and Saudi Arabia in coming weeks to promote the opportunities available in the country of 208 million people and a fast-expanding middle class.<br /><br />“We are open for business.”Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-49650406110975137572017-05-15T16:46:43.249-07:002017-05-15T16:46:43.249-07:00Exclusive: CPEC master plan revealed
https://www....Exclusive: CPEC master plan revealed<br /><br />https://www.dawn.com/news/1333101<br /><br />In any plan, the question of financial resources is always crucial. The long term plan drawn up by the China Development Bank is at its sharpest when discussing Pakistan’s financial sector, government debt market, depth of commercial banking and the overall health of the financial system. It is at its most unsentimental when drawing up the risks faced by long term investments in Pakistan’s economy.<br /><br />The chief risk the plan identifies is politics and security. “There are various factors affecting Pakistani politics, such as competing parties, religion, tribes, terrorists, and Western intervention” the authors write. “The security situation is the worst in recent years”. The next big risk, surprisingly, is inflation, which the plan says has averaged 11.6 per cent over the past 6 years. “A high inflation rate means a rise of project-related costs and a decline in profits.”<br /><br />Efforts will be made, says the plan, to furnish “free and low interest loans to Pakistan” once the costs of the corridor begin to come in. But this is no free ride, it emphasizes. “Pakistan’s federal and involved local governments should also bear part of the responsibility for financing through issuing sovereign guarantee bonds, meanwhile protecting and improving the proportion and scale of the government funds invested in corridor construction in the financial budget.”<br /><br />It asks for financial guarantees “to provide credit enhancement support for the financing of major infrastructure projects, enhance the financing capacity, and protect the interests of creditors.” Relying on the assessments of the IMF, World Bank and the ADB, it notes that Pakistan’s economy cannot absorb FDI much above $2 billion per year without giving rise to stresses in its economy. “It is recommended that China’s maximum annual direct investment in Pakistan should be around US$1 billion.” Likewise, it concludes that Pakistan’s ceiling for preferential loans should be $1 billion, and for non preferential loans no more than $1.5 billion per year.<br /><br />It advises its own enterprises to take precautions to protect their own investments. “International business cooperation with Pakistan should be conducted mainly with the government as a support, the banks as intermediary agents and enterprises as the mainstay.” Nor is the growing engagement some sort of brotherly involvement. “The cooperation with Pakistan in the monetary and financial areas aims to serve China’s diplomatic strategy.”<br /><br />The other big risk the plan refers to is exchange rate risk, after noting the severe weakness in Pakistan’s ability to earn foreign exchange. To mitigate this, the plan proposes tripling the size of the swap mechanism between the RMB and the Pakistani rupee to 30 billion Yuan, diversifying power purchase payments beyond the dollar into RMB and rupee basket, tapping the Hong Kong market for RMB bonds, and diversifying enterprise loans from a wide array of sources. The growing role of the RMB in Pakistan’s economy is a clearly stated objective of the measures proposed.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-69467413725269142472017-01-17T08:01:09.206-08:002017-01-17T08:01:09.206-08:00Foreign Direct #Investment #FDI in #Pakistan Cross...Foreign Direct #Investment #FDI in #Pakistan Crosses $1 Billion in first 6 months of Fiscal Year 2016-17. #CPEC<br /><br />http://dunyanews.tv/en/Business/370802-Foreign-Direct-Investment-in-Pakistan-rises-by-10<br /><br />Foreign investment in the country flourished after a long pause and a growth of 10 percent to $1.080 billion was recorded in the six months of the current fiscal year, the State Bank of Pakistan data showed.<br />The economic measures according to an analyst started paying some dividends as after a long gap in the first six months the barrier of $1 billion has been crossed. However, the stock market was on the losing side as the foreign fund managers repatriated their investment during July to December period. Outflow from the Pakistan Stock Exchange stood around $254 million as against $236 million of the same period last year or 2015.<br />There has been general tendency among the foreign fund houses to pull out from the emerging markets as they felt that with the rising interest rates and hope of further rise in the US in 2017, the best option to park their funds would be the US treasury or bonds.<br />Another analyst said that foreign direct investment recorded increase because of one time arrival of payment received from the Netherland as they bought majority of stakes of Engro Foods amounting to $464 million. Another factor which increased the net foreign investment climbing by 52.5 percent to $1.804 billion was the issuance of the Euro Bonds by the government during the period.<br />The government and economists mostly bet on China Pakistan Economic Corridor (CPEC) as the project would yield around $5 billion dollars year in the coming years.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-41039586979351679162016-12-15T17:27:18.506-08:002016-12-15T17:27:18.506-08:00#China’s #Pakistan project: a geopolitical game-ch...#China’s #Pakistan project: a geopolitical game-changer. #CPEC #eurasia #India #OBOR https://goo.gl/MBNaAj via @east_asia_forum<br /><br />David Brewster, ANU<br /><br />China’s One Belt One Road (OBOR) initiative is carving out new pathways across the Eurasian continent, signifying Beijing’s ambitions to remake the world around it. This project, if implemented, will fundamentally change China’s role and relationships in South Asia, perhaps in some ways that are not intended.<br /><br />In the Indian Ocean region, OBOR has two aspects. One is the Maritime Silk Road, a series of linked port projects aimed at facilitating trade and new production chains linked with China by sea. The other is a series of planned north–south pathways from China to the Indian Ocean, including the China–Pakistan Economic Corridor (CPEC) and the Bangladesh–China–India–Myanmar Economic Corridor. These projects come with huge price tags and would involve the construction of roads, railways, pipelines and other major infrastructure in corridors stretching for hundreds and even thousands of kilometres.<br /><br />---<br /><br />But these new overland pathways also have the potential to fundamentally alter China’s role in South Asia and the entire strategic make-up of the region. Geopolitically, South Asia has long functioned more or less as an island rather than as part of a bigger continent. Any overland connections that South Asia has with the rest of the continent are, at best, tenuous and excepting a tiny proportion of trade that is carried overland to and from Eurasia, essentially all of South Asia’s connections with the rest of the world are by sea or air.<br /><br />These geographic constraints have had considerable political, economic and strategic consequences for the region. One is in underpinning India’s role as South Asia’s predominant power. The relative lack of landward connections into the Eurasian continent also amplifies the importance of control over the maritime trade routes across the northern Indian Ocean.<br /><br />Geography has also caused Eurasian states, such as China, to have very limited contact with their South Asian neighbours. Sitting on the other side of the Himalayas, China may as well have been on the other side of the world. While it has been a strategic player in South Asia for some time, it has been from far away. China’s virtual remoteness allowed it to keep its hands clean of domestic political and security problems, even while it provided substantial military and diplomatic support to the Pakistani government. This has helped China to project itself as a benevolent partner that does not ‘meddle’ in internal affairs.<br /><br />---<br /><br />Pakistan has sought to address CPEC security risks by forming a special army corps of 12,000 personnel devoted to protecting the project. But, at least until recently, China has been surprisingly sanguine about these risks and its ability to rely on the Pakistan Army.<br /><br />---<br /><br />In August 2016, in a national Independence Day speech, Indian Prime Minister Modi sent a clear message that India may begin to publicly support Balochistan’s separatist insurgents. This represents a big shift for India and was directed almost as much at Beijing as at Islamabad. A senior and well-connected Chinese scholar responded that China will have ‘to get involved’ if India seeks to disrupt the CPEC. On 21 September, in the wake of the deterioration in Indo–Pakistan relations over Kashmir, Chinese Premier Li Keqiang publicly warned his civilian Pakistani counterpart, Nawaz Sharif, that he ‘hoped’ Pakistan can continue to provide safety protection to the program construction and Chinese personnel in Pakistan. These may well be the opening moves to a whole new strategic dynamic in South Asia driven by China’s great OBOR ambitions.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-71365304215812542372016-08-31T07:47:50.257-07:002016-08-31T07:47:50.257-07:00#China’s #Shanghai Electric to buy majority stake ...#China’s #Shanghai Electric to buy majority stake in #Pakistan’s K-Electric. #Karachi #CPEC http://on.wsj.com/2c4rCAr via @WSJ<br /><br />hina’s state-owned Shanghai Electric Power Co. plans to acquire a controlling stake in Pakistani power utility K-Electric Ltd., in a deal that could be one of the biggest foreign investments in Pakistan’s history.<br /><br />In a notification filed with the Pakistan Stock Exchange Tuesday, Shanghai Electric said it intends to purchase the 66.4% stake in K-Electric currently held by The Abraaj Group, a Dubai-based investment firm. K-Electric shares, included in the Pakistan Stock Exchange’s benchmark 100-index, closed at 9.21 Pakistani rupees ($0.09) Tuesday, valuing Abraaj’s stake in the utility at 168.9 billion rupees, or $1.6 billion.<br /><br />K-Electric supplies power to Pakistan’s largest city and economic hub, Karachi, home to around 20 million people. The company has a customer base of 2.2 million, and 11,000 employees.<br /><br />The acquisition would be the largest investment in a Pakistani company by a Chinese firm, and a boost to Prime Minister Nawaz Sharif’s government, which considers increasing foreign investment a key component of its economic policy.<br /><br />If completed, Shanghai Electric’s purchase will be the third major foreign investment this year in Pakistan, dwarfing the $258 million acquisition of Pakistani appliance maker Dawlance by Turkey’s Arçelik A.Ş. in June, and Netherlands-based Royal FrieslandCampina N.V.’s acquisition of a 51% stake in Engro Foods Ltd. for an estimated $450 million in July.<br /><br /><br />Work is also under way in Pakistan to build the China-Pakistan Economic Corridor, a $46 billion, multiyear Chinese investment program connecting the two countries. A bulk of the investment will be in Pakistan’s energy sector, and the government hopes the new power plants will help end electricity shortages that have hampered economic activity for years. Pakistani officials also hope the corridor will help the country industrialize and boost growth.<br /><br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-26872230395947298362016-06-27T10:36:31.831-07:002016-06-27T10:36:31.831-07:00#China-Led #Infrastructure Bank AIIB Starts With $...#China-Led #Infrastructure Bank AIIB Starts With $509M in Loans 4 Projects: #Bangladesh #Indonesia, #Pakistan #CPEC<br /><br />http://www.nytimes.com/2016/06/26/world/asia/china-led-development-bank-starts-with-509-million-in-loans-for-4-projects.html<br /><br />BEIJING — A new Chinese-led international development bank announced its first four loans on Saturday, pledging to lend $509 million for projects to spread electric power in rural Bangladesh, upgrade living conditions in slums in Indonesia, and improve roads in Pakistan and Tajikistan.<br /><br />At the first of the annual general meetings of the institution, the Asian Infrastructure Investment Bank, the bank’s president, Jin Liqun, said the projects were financially sound and environmentally friendly and had been accepted by the people in the project areas.<br /><br />The projects of the 57-member bank, founded last year as an effort by China to both challenge lending institutions and cooperate with them, are relatively modest.<br /><br />The road in Tajikistan is just three miles long, but it will help clear traffic congestion on an important trading route near the capital, Dushanbe. A $100 million loan to Pakistan is for 40 miles of highway in Punjab Province that would complete the last section of a national artery, the M-4, the bank said.<br /><br />Three of the projects are being financed with other institutions — the Asian Development Bank, the World Bank, and the European Bank for Reconstruction and Development — an approach that allowed the new bank to begin the projects quickly. The bank’s $165 million loan to expand electricity in rural areas of Bangladesh is its only stand-alone project.<br /><br />By financing projects with long-established institutions, the Beijing-based bank was able to move quickly because work on meeting environmental standards and procurement policies had been completed, staff members at the bank said.<br /><br />Although the new bank was China’s idea, it is intended to operate as an international bank dedicated to improving the basic structures and facilities needed to stimulate development across Asia, Mr. Jin said at a news conference on Saturday. Unlike the World Bank and the Asian Development Bank, the Asian Infrastructure Investment Bank places less emphasis on the reduction of poverty, he said.<br /><br />The bank “was born with the birthmark of China, but its upbringing is international,” Mr. Jin said. Referring to the three other institutions that will finance the projects, he said, “We can work wonderfully together.”Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-81661718134153172732016-06-20T22:48:39.480-07:002016-06-20T22:48:39.480-07:00#China eases rules for #Pakistan’s banks. #CPEC #F...#China eases rules for #Pakistan’s banks. #CPEC #FDI<br />http://tribune.com.pk/story/1126610/unprecedented-china-eases-rules-pakistans-banks/<br /><br />After successful negotiations by the Ministry of Commerce, Chinese authorities have eased the regulations for Pakistan’s financial sector which will make it easier for Habib Bank Limited (HBL) to establish a branch in China.<br /><br />HBL will be the first South Asian commercial bank to open a division in China. It will be located in China’s northwest city of Urumqi.<br /><br />“The bank has received formal approval from the Chinese authorities and will open its branch by the end of this year,” announced Commerce Minister Khurram Dastgir, accompanied by the president and CEO of HBL, at a press conference on Monday.<br /><br />HBL to open branch in China<br /><br />The minister said after successful negotiations with the Chinese authorities under the Trade and Investment Agreement 2009, they relaxed their criteria for Pakistan’s banking sector by curtailing the currency reserves limit from $20 billion to $15 billion.<br /><br />The banking channels will be opened under the Trade and Investment Agreement signed by the two countries. Under the agreement, both sides have agreed to provide concessions to each other in 11 sectors including the banking sector.<br /><br />Dastgir was optimistic that the step would enhance trade facilitation between the two countries and they would now be able to open letters of credit with HBL instead of a foreign bank.<br /><br />“This initiative will also help Pakistan’s banking channel to reach the Central Asian countries bordering Urumqi.”<br /><br />China cuts cost estimate by another $200 million for Gwadar LNG pipeline<br /><br />Replying to a question, the minister said availability of Pakistan banking channels in China would also be helpful in overcoming the challenges of over and under-invoicing in bilateral trade as most of the businessmen conducted trade through cash.<br /><br />HBL President Sultan Ali Allana said HBL’s initial plan was to cover the China-Pakistan Economic Corridor trade route and it would then expand its branches to other cities of China.<br /><br />He said they had got approval from the Chinese authorities and the first branch would be opened in Urumqi before the end of current year.<br /><br />“HBL has a long-term strategic plan in China and will broaden its channels in other cities in future with appropriate investment,” said Allana.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-70011428071123510142016-06-20T19:12:06.715-07:002016-06-20T19:12:06.715-07:00#Pakistan, #China discuss increased collaboration ...#Pakistan, #China discuss increased collaboration in #vocational #training & #education #CPEC<br /><br />http://tribune.com.pk/story/1126642/meeting-pakistan-china-discuss-collaboration-vocational-education/<br /><br />Pakistan and China have agreed to increase collaboration in the field of vocational education and teacher training programmes.<br /><br />The agreement came during a meeting between a delegation from China’s Tianjin University of Technology and Education (TUTE) and National Vocational and Technical Training Commission (NAVTTC) Executive Director Zulfiqar Ahmad Cheema here on Monday.<br /><br />Cheema briefed the delegation about the working of NAVTTC and its recent initiatives such as establishment of job placement centres for its graduates.<br /><br />He said the under-construction China-Pakistan Economic Corridor (CPEC) would open new vistas of prosperity and development and would create employment opportunities in Pakistan.<br /><br />Cheema said the two countries should enhance their collaboration to reboot the TVET system in Pakistan.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-88101145392456527672016-06-07T07:10:45.506-07:002016-06-07T07:10:45.506-07:00Standard Chartered Bank Aims to Double #Pakistan P...Standard Chartered Bank Aims to Double #Pakistan Profit on Loan Demand in Growing #Economy http://bloom.bg/1PfzsSO via @business<br /><br />The bank is targeting an advance to deposit ratio of at least 45 percent in 12 months from 35 percent in the first quarter, according to Shazad Dada, chief executive officer of Standard Chartered Bank Pakistan Ltd. The industry as a whole will see the same trend, he said, with ratios rising to as much as 70 percent in three years from 46 percent in 2015.<br /><br />“The economy has opened up” and there is demand from private-sector borrowers, Dada said in an interview in Karachi, the commercial capital. “Putting money to work is the easy part. It’s finding the right quality, right sponsors, right business ideas.”<br />Pakistan’s Prime Minister Nawaz Sharif is seeking to boost economic growth to its fastest pace in more than a decade after achieving stability through an International Monetary Fund loan program that averted an external payments crisis in 2013.<br /><br /><br />Suspicious Money<br />South Asia’s second-largest economy may prove to be a bright spot for Standard Chartered, which posted its first annual loss in more than a quarter of a century last year and is seeking to restructure or jettison about $100 billion of assets. The company declared $1.34 billion of impairment losses on loans in neighboring India last year, a legacy of its now-abandoned policy of rapidly expanding in emerging markets.<br />In Pakistan, finding quality assets and exercising discipline in extending credit will be key to driving the business, Dada said. His unit’s operating profit climbed to 15.4 billion rupees ($147 million) last year, almost triple the amount in 2010, data compiled by Bloomberg show.<br />For Pakistan, the risks for banking are associated with “suspicious money” being put through lenders for illicit purposes such as terrorism financing, corruption and human trafficking, Dada said. The country placed in the lower half of Transparency International’s 2015 Corruption Perceptions Index with a ranking of 117th out of 168 countries tracked by the organization.<br />Standard Chartered had boosted its scrutiny of money flows, Dada said. The unit he oversees has more than doubled financial-crime compliance staff to 57 this year from 23 in early 2015, he said.<br />Lower Rates<br />The London-based lender has been enhancing controls on money laundering, bribery and other offences and has been operating under deferred prosecution agreements with U.S. authorities since 2012, when it settled cases related to money-laundering failures and breaches of U.S. sanctions against Iran.<br />The bank’s Pakistan shares have fallen 15 percent this year, compared with the benchmark index’s 9.5 percent gain. Standard Chartered’s stock in London lost 3 percent in that time.<br /><br />Pakistan’s private sector is being tempted to borrow after the country cut its discount rate by the most in Asia last year, and by 375 basis points in the past two years, after the drop in oil prices. The nation’s central bank unexpectedly cut its benchmark interest rate to 5.75 percent this month before the government presented its budget for the new financial year last week. Pakistan’s consumer confidence level rose to the highest level in eight years in the March quarter, according to New York-based Nielsen, which tracks the data.<br />Outstanding private-sector loans in Pakistan climbed about 9 percent to $35.4 billion as of April from a year earlier, central bank data show.<br />“The rise in loans tell you the economy is picking up steam and banks mean real business after heavily investing in government securities for years,” said Yawar uz Zaman, head of research at Karachi-based Shajar Capital Pakistan Pvt.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-62268246854497714042016-06-03T09:09:03.983-07:002016-06-03T09:09:03.983-07:00#Pakistan budget targets #tax revenue rise to $37....#Pakistan budget targets #tax revenue rise to $37.8b, hold deficit at 3.8% of #GDP, down from 4.3% now. http://reut.rs/25Eymg8 via @Reuters<br /><br />Pakistan is targeting a 16 percent rise in tax revenues in the year ending June 2017, Finance Minister Ishaq Dar said on Friday as he unveiled a budget aimed at shoring up the South Asian country's finances.<br /><br />Dar said Pakistan would target a fiscal deficit of 3.8 percent of gross domestic product for the coming financial year, down from the 4.3 percent envisaged for this year.<br /><br />He told parliament that the aim was to push Pakistan's persistently low tax-to-GDP ratio to above 10 percent and raise revenues from taxation to 3.95 trillion rupees ($37.8 billion)from 3.42 trillion this year. Pakistan's financial year runs from July to June.<br /><br />Pakistan's economy grew at an estimated 4.7 percent in the year to June 2016 - short of the government's 5.5 percent target but the highest rate for eight years - after a slide in oil prices and growth in industry and services boosted demand.<br /><br />Investor confidence has slowly returned to a country that was battered by the global financial crisis.<br /><br />But the economy remains structurally weak, hamstrung by poor infrastructure, the threat of militant violence and narrow tax base.<br /><br />Successive governments have promised to rein in tax evaders and boost revenues but face fierce resistance to change, including from the many politicians and businessmen believed to be among those dodging their taxes. ($1 = 104.6000 Pakistani rupees)Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-75957432044453871292016-05-30T22:12:14.326-07:002016-05-30T22:12:14.326-07:00A newer and increasingly common option in conventi...A newer and increasingly common option in conventional power projects involving Chinese contractors is a project finance structure<br />such as a BOT (build-operate-transfer). Under a BOT, developers set up and arrange loans to a special purpose vehicle (SPV) in the host country. Some 70-80% of the capital costs of construction will come from these loans, and the remainder will be provided by the developers through equity and / or other loans.<br /><br />The SPV then enters into all the contracts needed for the project, including an engineering procurement construction (EPC) contract with the contractor. If the funding is from China, this EPC contract will almost always be with a Chinese contractor.<br /><br />Conventional power projects are seen as particularly 'bankable' BOT projects, because the technology is usually tried and tested and there is a high likelihood that performance requirements will be met. These projects also do not generally require significant land acquisitions, or need extensive underground works, reducing the risk of delays and unforeseen problems. Many jurisdictions, in fact, now have standard form power purchase agreements and implementation agreements that offer to allocate project risks between the offtaker, the government and the developers in a split that is attractive to many lenders.<br /><br />It has taken Chinese contractors some time to get used to EPC contracts under project financed structures, as these tend to be tough on the contractor. Rates of delay and performance liquidated damages, and the caps on these, are generally much higher, and the contractor's rights to additional time and cost are limited. Many of these rights have to match the power purchase agreement that the SPV has negotiated with the offtaker. However, the upside for the contractor is that the developers are often willing to pay a higher contract price in return for the contractor taking on these additional risks.<br /><br />Where the finance for the project is coming from Chinese banks, the Chinese contractor may enjoy stronger bargaining power, although that is not always the case. There are plenty of Chinese contractors with the skills needed to build these power stations, and developers will often use the threat of switching negotiations to a competing contractor to get their way in negotiations.<br /><br />Evolution to investment<br /><br />Even before the launch of OBOR, the larger and more experienced Chinese contractors had begun the transition from a traditional contractor business model to a 'contractor plus investment' model. Now, the signs are that a significant proportion of OBOR projects will involve Chinese contractors making investments in the projects that they are engaged to construct, and conventional power projects have been among the first to use this structure.<br /><br />The China Pakistan Economic Corridor (CPEC) has been among the first to see innovative project structures. The Thar Coal Block II project involves the development of an open pit coal mine and 660MW mine mouth power station through two SPVs set up by a consortium of Pakistani and Chinese investors, including a major Chinese contractor who will act as both EPC contractor and SPV equity participant. Project finance loans, including conventional RMB and Rupee Islamic tranches, are provided by syndicates of Pakistani and Chinese lenders including Habib Bank, United Bank, China Development Bank, Industrial and Commercial Bank of China and Construction Bank of China.<br /><br />- See more at: http://www.conventuslaw.com/report/chinas-one-belt-one-road-policy-increasing-the/#sthash.3Jx66DDF.dpufRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-50240095817658294762016-05-30T12:44:04.710-07:002016-05-30T12:44:04.710-07:00#Pakistan achives 4.7% #GDP growth in 2015/16, mis...#Pakistan achives 4.7% #GDP growth in 2015/16, misses target by 0.8%, sets 5.7% target for 2016/17 http://reut.rs/22uhSlF via @ReutersIndia<br /><br />Pakistan achieved GDP growth of 4.7 percent in the fiscal year ending in June 2016, missing its target of 5.5 percent, the prime minister's office announced on Monday.<br /><br />The government has set a growth target of 5.7 percent for the next fiscal year, according to a statement. Pakistan's financial year runs from July to June.<br /><br />Nawaz Sharif's announcement comes ahead of Friday's presentation of his government's budget for the 2016-17 financial year.<br /><br />The government has set a growth target of 3.5 percent for the agricultural sector, 7.7 percent for the industrial sector and 5.7 percent for the services sector for the coming year.<br /><br />Friday's budget will include 1,675 billion rupees ($15.98 billion) in National Development Outlay, including 800 billion rupees ($7.63 billion) in federal funds and 875 billion rupees ($8.35 billion) in funds to the provinces, the statement said.<br /><br />Pakistan's economy, despite its missed targets, grew at its highest rate for eight years this year. It remains plagued by chronic power shortages, poor infrastructure and flagging exports, however.<br /><br />On May 21, Pakistan's central bank cut its key policy rate by 25 basis points to 5.75 percent, mainly over concern at the missed GDP growth target.<br /><br />In April 2015, China announced it would invest $46 billion in the China Pakistan Economic Corridor, a project that would link western China to the Arabian Sea through Pakistan, creating a major new trade route.<br /><br />"CPEC has the capacity for further contributing to GDP and will have far-reaching effect in consolidating the economic outlook of the country in years ahead," said Monday's statement.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-91578519250523577272016-05-29T15:49:52.037-07:002016-05-29T15:49:52.037-07:00#Pakistan Per capita income up 2.9pc to $1561 in 2...#Pakistan Per capita income up 2.9pc to $1561 in 2015/16 https://www.geo.tv/latest/106496-Per-capita-income-up-29pc-to-1561-in-201516 …<br /><br />The country’s per capita income rose 2.9 percent to $1,561 in the current fiscal year, a document revealed on Monday, as the stable exchange rate kept the growth nominal.<br /><br />“As the exchange rate largely remained stable so the per capita income also showed a nominal growth in the current fiscal compared to the last year,” said a source.<br /><br />The document, available with The News, said the per capita income was calculated at $1,517 for last fiscal year. <br /><br />The ministry of finance will release the figure of per capita income along with the upcoming Economic Survey (2015-16) before the announcement of the budget for the fiscal 2016-17.<br /><br />The per capita income grew 9.4 percent to $1,513 in 2014/15 over the preceding fiscal year.<br /><br />The latest per capita income was based on the population growth rate of 1.94 percent in the current fiscal year as compared to 1.98 percent in the previous fiscal year. The document further showed that investment to GDP ratio slightly declined in the outgoing fiscal year despite significant investment inflows from China under the $46-billion China-Pakistan Economic Corridor (CPEC).<br /><br />The investment to GDP ratio came down to 15.2 percent from the revised figure of 15.5 percent a year ago. This was mainly due to a downtrend in private investments. “The private sector investment dropped to 9.8 percent of GDP in the current fiscal year of 2015/16 from 10.2 percent in 2014/15,” said an official. “This also indicated that the private sector is still reluctant to go for the new investments in modernising.”<br /><br />The State Bank of Pakistan (SBP) said foreign private investment in the country fell 64.7 percent to $635 million in July-April. It was $1.8 billion in the corresponding period of the last fiscal year. Foreign direct investment (FDI) and portfolio investments are the major components of the total foreign investment. In July-April 2015/16, the portfolio investment outflows amounted to $381.2 million as compared to inflows of $836.8 million in the same period a year ago.<br /><br />Chinese investment in the country jumped one-and-half time to $550 million, more than half of FDI in the first 10 months of the current fiscal year. The SBP said the FDI inflows from China amounted to $218 million in the corresponding months of 2014/15. <br /><br />The overall FDI posted a growth of 5.4 percent to $1.016 billion in July-April 2015/16 over the same period a year earlier.<br /><br />Sector-wise analysis revealed that power sector was the main recipient of FDI during the period under review. The inflows of FDI towards the sector posted a sharp growth of 208 percent to $518 million.<br /><br />The country is attracting foreign companies in various sectors. It attracted substantial amount of foreign investment in mid 2000s in banking and telecommunication sectors.<br /><br />The official data showed that the public sector investment was up to 3.8 percent of GDP in 2015/16 from 3.7 percent in 2014/15. It further showed that the savings to GDP ratio also declined slightly as it was down to 14.5 percent in 2015-16 from 14.7 percent. <br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-60004561494750155792016-05-27T08:36:45.174-07:002016-05-27T08:36:45.174-07:00Excerpts of Seeking Alpha travel report on meeting...Excerpts of Seeking Alpha travel report on meeting Pakistani companies at investors conference in Dubai: <br /><br /><br />http://seekingalpha.com/article/3978199-asia-frontier-capitals-travel-report-pakistan-investment-conference-dubai<br /><br />We met a diverse set of thirteen companies across the auto, banking, cement, consumer staple, insurance, media and power sectors and the mood amongst the corporates and other investors regarding the Pakistani economy in general was positive. <br />----<br /><br />The CPEC is a part of China's One Belt One Road initiative and it consists of investing a total of USD 45 billion over a fifteen year period in power, road and port projects. The majority of investment is expected to be in the power sector with a total of ~USD 34 billion to be spent on putting up new power capacity primarily using coal-based power plants. These new power projects are expected to lead to an increase of ~17,000 megawatts in generation capacity and this can go a long way in resolving the power deficit that Pakistan currently faces. Any improvement in the power situation will only be a positive for economic growth as there is a power deficit at present due to the mismatch between generation capability and demand.<br /><br />The other CPEC-related investments are linked to infrastructure projects such as highways, rail networks and ports. An important infrastructure initiative within the CPEC is the Gwadar port related project which besides further developing the port also includes an international airport and a highway. The CPEC could be a big positive for the Pakistani economy and though there is execution risk, the project is expected to be geopolitically important to both China and Pakistan.<br /><br />Some of the companies we met were existing holdings and some we were meeting for the first time. From our existing holdings, the company which we like and which we met with is "The Searle Company Ltd.," a pharmaceutical company which focuses on generic products. It is amongst the Top 10 pharmaceutical companies in the country in terms of revenue and it has a strong presence in the cardio vascular, gastro and cough syrup space. Revenues and profits for the company have grown at a CAGR of 17% and 30% over the last five financial years respectively. ...<br /><br />Another interesting company we met was "Shifa Intl. Hospitals," a hospital chain company which currently operates a hospital in Islamabad and Faisalabad and plans to expand capacity into Lahore. Besides this, the company also has a laboratory business which it could expand in the future. The fund is currently invested in this company. There was one bank present at the conference and the outlook for the Pakistani banking sector is soft as their margins are expected to come under pressure due to the reinvestment risk they face as a large portion of their government bonds are expected to mature in 2016. Having said that, most Pakistani banks are fundamentally sound in terms of loan loss coverage ratios and capital adequacy ratios.<br /><br />We also met with one of the leading auto companies in Pakistan, "Indus Motor Company Ltd." and their sales growth over the past year has been in double digits leading to capacity constraints which they plan to overcome in the short run but they would need new capacity in the long run. The Pakistan automobile market does hold a lot of potential as car penetration in Pakistan at 13 per 1,000 people is lower than India which is 18 per 1,000 people. A new auto policy recently passed by the government could bring more investment into the country and may also lead to more competition which could possibly lead to new model launches by the existing players and this can be positive for overall growth of the industry.<br /><br />----<br />We recommend to invest via MSCI Pakistan ETF (NYSEARCA:PAK) or through the AFC Asia Frontier Fund, which has currently 20.6% of the fund invested in Pakistan.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-69807727775594197742016-05-23T08:47:38.696-07:002016-05-23T08:47:38.696-07:00#Pakistan stock exchange expects $1 bln of #power ...#Pakistan stock exchange expects $1 bln of #power IPOs in 2017 and 2018. #loadshedding #energycrisis http://dailym.ai/1TyKvKL via @MailOnline<br /><br />Pakistan's stock exchange could see initial public offerings of power sector projects amounting to some $1 billion in 2017 and 2018, the bourse's managing director said on Monday.<br />He also said he also expected Pakistan to regain its stock index emerging market status this year.<br />Referring to IPOs in the power sector, Nadeem Naqvi told Reuters in an interview:<br />"The projects that have had financial close and are under construction now, the tendency is that - once they get commissioned - that is the time they come onto the market to restructure their debt-equity ratio, so about $1 billion will come in."<br />Index provider MSCI said in March it was seeking feedback from investor on reclassifying Pakistan stocks to emerging market status from its current frontier market status - a less liquid and riskier subset of stocks.<br />The decision to move Pakistan back to the emerging category - from which it was dropped in 2008 - is due in June 2016.<br />Naqvi said he expected Pakistan to regain its emerging market status soon, if not in June then in December, adding he expected to see money coming in from abroad in anticipation of the decision.<br />"We saw that in the case of Qatar or the United Arab Emirates, approximately $400 million came in within 6-8 months of the announcement, and the market there is relatively narrow," he said, speaking on the sidelines of a Renaissance Capital investment conference.<br />"Our market is much more broader, but given Pakistan's risk factor ... I will be very happy if we get about $200-250 million to come in - now this would be the initial arbitragers which would position themselves for the index flows."<br />Currently, around 30 percent of the freefloat listed on the country's stock exchange was held by international institutional portfolio investors, said Naqvi, adding this would inevitably rise once Pakistan was reclassified.<br />"Anywhere between 40-45 percent (of foreign ownership) would be a number I would be comfortable with, anything beyond that it becomes risky because the volatility will increase."<br />He also expects the market capitalisation, currently at $71 billion, to rise above $100 billion in the next five years, thanks to IPOs and share valuations.<br />"Pakistan's discount against emerging markets is huge, and I think we will be seeing a narrowing of that discount, so even though the global valuations are not going to expand, Pakistan's discount is going to narrow, and there we are going to see that in the market cap."<br /><br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-59165544911138272412016-05-22T12:10:47.288-07:002016-05-22T12:10:47.288-07:00'ICBC is positive on #Pakistan's future,&#...'ICBC is positive on #Pakistan's future,' CEO, Industrial & Commercial Bank of #China #CPEC | Business Recorder<br />http://www.brecorder.com/br-research/brief-recordings/0:/47533:icbc-is-positive-on-pakistans-economic-future-ceo-icbc-pakistan-operations/?date=2016-05-20<br /><br /><br /><br />BRR: How important will CPEC be for ICBC?<br /><br />HS: CPEC is the landmark of trade and economic cooperation between China and Pakistan. We cannot praise more of its significance to the governments and commercial sectors of both countries. As the only Chinese commercial bank that has set up branches in Pakistan, ICBC of course plays an indispensable role in the development of CPEC. Firstly, CPEC brings mega infrastructure and energy projects to Pakistan and ICBC, with its global financial capacity, is undoubtedly the natural partner for the finance of these big projects.<br /><br />Secondly, along with CPEC, more and more Chinese enterprises are coming to Pakistan and seeking for business opportunities. ICBC, as the local Chinese commercial bank, will serve as an important channel for such clients to understand better the environment of investment in Pakistan. In addition, CPEC also sets a sound foundation for the usage of cross-border RMB settlement and ICBC is an incomparable expert in providing quality services to our customers in this area.<br /><br />As a matter of fact, ICBC is already playing an indispensable role in CPEC, being one of the major finance providers to the major projects. During Chinese President Xi's visit to Pakistan last year, ICBC signed four contracts worth $4.5 billion. So far, the international syndications led by ICBC for projects such as Thar Coal mine and Power station, Dawood Wind Power and Sachal Wind Power have reached financial closure and started drawing down. Other projects such as SK Hydropower Station and Sahiwal Coal Power Station are also soon to reach financial closure. In the mean time, ICBC are also acting as agent bank and custodian bank for many projects of CPEC, ensuring the safety and convenience of the fund management.<br /><br />BRR: What is your view on Pakistan's economy?<br /><br />HS: Pakistan is one of the major developing economies with great geographical advantages and her importance as an economy in South Asia cannot be exaggerated. It is of great significance to maintain fast and sustainable economic development of Pakistan for the overall regional economy. ICBC holds a firm and positive view on the future development of Pakistan economy.<br /><br />A country with the sixth largest population in the world, Pakistan shows huge potential for economic development and is drawing greater attention from international investors. As we shall see, with CPEC going further, Pakistan will benefit a great deal from future investment and infrastructure construction. It is based on such a positive view that ICBC has adopted a long term strategy for the business in Pakistan. ICBC Lahore Branch, the third ICBC branch in Pakistan, was formally inaugurated with the witness of Chinese President Xi Jinping and Pakistani prime minister Mr Muhammad Nawaz Sharif in April 2015, as a high praise of ICBC's presence in Pakistan as well as an indicator of the level of friendly commitment between the two nations. The set-up of Lahore Branch also proves ICBC's long term view and commitment to the local market.<br /><br />BRR: Will your bank have a role to play with the CPEC investment coming in?<br /><br />HS: As I have mentioned above, as the largest commercial bank in China, ICBC will primarily focus on facilitating and boosting the trade and economic cooperation between China and Pakistan. It is not just our commitment but also our business foundation to give support to the smooth development of CPEC related projects. With the fast development of local economy, ICBC will be more confident in business operation in Pakistan. For the mutual benefits of China and Pakistan, ICBC will continue to bring her global advantages to Pakistan, give funding and advisory support to local and Chinese enterprises, and make memorable contributions to CPEC.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-81926374089799140562016-05-21T08:50:51.093-07:002016-05-21T08:50:51.093-07:00#Pakistan misses GDP goal for 2015-16. Actual 4.7%...#Pakistan misses GDP goal for 2015-16. Actual 4.7% vs target 5.5%. #Service sector grows 5.7%. #Agri shrinks 0.19%<br /><br />http://www.dawn.com/news/1259741/pakistan-misses-economic-growth-target<br /><br />The country missed the economic growth target for the current financial year by a wide margin mainly because of widespread dismal performance by the agriculture sector. The gross domestic product (GDP) grew by 4.7 per cent against the target of 5.5pc.<br /><br />At a meeting on Friday of the national accounts committee comprising senior representatives from the four provinces and regions and technical experts, the performance of all economic sectors was added up that showed higher than targeted growth by the industrial sector. The services sector achieved its growth target of 5.7pc.<br /><br />But the most worrying aspect of the year was a 0.19pc negative growth by agriculture as a whole against the target of 3.9pc.<br /><br />Cotton output led the freefall in the agriculture sector, considered the backbone of the national economy, as it posted a negative growth of 27pc. The cotton output stood at 10.1 million bales against the target of 13.96m bales. Last year, its output stood at 13.9m bales with a 9.5pc growth.<br /><br />As a result, cotton ginning declined by 21pc against the target of 5pc. Important crops output fell by 7.18pc against the target of 3.2pc, while other crops fell by 6.2pc against the target of 4.5pc.<br /><br />Wheat production grew by a meager 0.61pc to 25.47 million tonnes.<br /><br />The livestock sector grew by 3.63pc, but remained short of the 4.1pc target, while fisheries increased by 3.3pc, surpassing the 3pc target. Forestry was the only saving grace in the agriculture sector as it grew by 8.8pc against the target of 4pc.<br /><br />On an overall basis, industry grew by 6.8pc against the target of 6.4pc. It was supported by the construction and electricity sectors — the linchpins of the Pakistan Muslim League-Nawaz government’s development focus.<br /><br />Last year, industry had grown by 3.6pc.<br /><br />The mining and quarrying sector grew by 6.8pc against the target of 6pc, but the overall manufacturing sector could not meet growth expectations. The manufacturing sector posted a growth of 5pc, but remained short of the 6.1pc target. It had grown by 3.2pc last year.<br /><br />The most important sector in industrial domain — large scale manufacturing (LSM) — also could not meet its growth target of 6pc. It grew by 4.6pc. LSM had improved by only 2.4pc last year. Small and household manufacturing grew by 8.2pc against the target of 8.3pc.<br /><br />The construction sector grew by 13.1pc as it went beyond the 8.5pc target, while electricity generation and gas distribution improved by 12.2pc against the target of 6pc.<br /><br />The services sector could meet the target of 5.7pc, but this was mainly supported by an increase in the salary of government employees. This was evident from an 11.13pc growth in general government services against the target of 6pc.<br /><br />Transport, storage and communication services grew by 4.1pc against the target of 6.1pc, while wholesale and retail trade improved by 4.57pc against the target of 5.5pc.<br /><br />The finance and insurance sector exceeded the target of 6.5pc with a 7.1pc growth. Housing services stood at 3.99pc against the target of 4pc.<br /><br />Likewise, other private services improved by 6.64pc against the target of 6.4pc.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-6354814700642119002016-05-19T16:14:19.150-07:002016-05-19T16:14:19.150-07:00Bonds of Brotherhood: #Pakistan, #China Mark 65th ...Bonds of Brotherhood: #Pakistan, #China Mark 65th Anniversary of Friendship #CPEC http://sputniknews.com/asia/20160519/1039913468/pakistan-china-ties.html … via @SputnikInt<br /><br />Pakistan and China are celebrating 65 years of diplomatic relations. A number of ceremonies and activities have been scheduled to mark the occasion, starting on May 19 and continuing throughout the month.<br /><br />The celebration began on Thursday in Pakistan's Punjab Province. Seminars on the strong ties of friendship between Pakistan and China and a pictorial exhibition have been arranged at the direction of Punjab Chief Minister Muhammad Sheba Sharif.<br /><br />In line with the 65th annual celebrations, Pakistan's National Institute of Folk and Traditional Heritage, Lok Virsa, has planned a two-day "Chinese Mela" festival that will start on Saturday. Organized in collaboration with the Chinese Embassy, it will become "part of the on-going efforts of promoting a relationship of love and brotherhood between the people of two countries." The Mela will highlight Chinese culture, and cuisine along with Pakistani artisans, music and a photo exhibition, the institute's website said.<br />Pakistan-China friendship has become a model for the world, said Federal Minister for Planning, Development and Reforms Ahsan Iqbal in an interview to APP. "China has been supporting Pakistan unconditionally for the last 65 years, while Pakistan has reciprocated to its time-tested friend's gestures positively," he added. "That's why, friendship between the two countries is considered higher than the Himalayas, deeper than the sea and sweeter than honey."<br /><br /><br />Read more: http://sputniknews.com/asia/20160519/1039913468/pakistan-china-ties.html#ixzz4998upenBRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-29228010563524243922016-05-18T16:59:11.951-07:002016-05-18T16:59:11.951-07:00#Pakistan #ETFs In Focus On Growing Prospects. #CP...#Pakistan #ETFs In Focus On Growing Prospects. #CPEC #China #FDI #FII http://seekingalpha.com/article/3975926-pakistan-etf-focus-growing-prospects?source=tweet … $FM $FRN $PAK<br /><br />Pakistan represents an untapped Asian market for U.S. investors. The country's equity market had a bad start to 2016, thanks to the global sell-off and foreign investment outflow primarily from the oil & gas sector.<br /><br />However, the country is working on a turnaround. Its economy is growing at a decent rate of approximately 4.5% per annum. As per a California software company, NetSol Technologies (NASDAQ:NTWK), the country's 190 million population, with more than 50% being under 25 years of age, could also act as a key catalyst to long-term growth.<br /><br />In a review of Pakistan's economic program, the IMF positively stated that the country is on a growth trajectory and is expected to benefit from low oil prices and strong investment due to the implementation of the China-Pakistan Economic Corridor (CPEC). The aim of CPEC is to boost Pakistan's infrastructure and its industrial sector.<br /><br />However, as a caveat, we would like to remind investors that like many other frontier markets, Pakistan is also fraught with political tensions, which might hurt the stock market's potential to outperform at any given time. Additionally, stocks in frontier markets in developing countries generally have smaller market capitalization and lower levels of liquidity than those in large emerging markets. So, investors planning to invest in this market should have a relatively high risk tolerance.<br /><br />Keeping these points in mind, we highlight the sole ETF tracking Pakistan - the MSCI Pakistan ETF (NYSEARCA:PAK). This ETF looks to track the MSCI All Pakistan Select 25/50 Index, which holds about 37 securities in its portfolio. The fund charges 92 basis points a year. The portfolio is heavy in financials, at 31% of assets, while basic materials (28%) and energy (20%) round off the top three. The top three companies of the fund have almost one-third exposure. The fund has total assets of $5.4 million, with paltry volumes of 3,000 shares. It has gained 6.3% so far this year as of April 29, 2016.<br /><br />Investors can also consider other ETFs like the Guggenheim Frontier Markets ETF (NYSEARCA:FRN) and the iShares MSCI Frontier 100 Index ETF (NYSEARCA:FM) having significant exposure of 10.2% and 10%, respectively, to Pakistan (see Broad Emerging Market ETFs here).<br /><br />FRN<br /><br />FRN seeks to match the performance of the BNY Mellon New Frontier DR Index. BNY Mellon defines frontier market countries based on GDP growth, per capita income growth, inflation rate, privatization of infrastructure and social inequalities. With 62 stocks in its basket, the fund has about 43% of assets in the top 10 companies, while financial services has the highest exposure at 42%. With total assets of $38.8 million, it has average volume of 25,000 shares and an expense ratio of 71 basis points. FRN has returned 4.6% so far this year.<br /><br />FM<br /><br />FM, holding 107 stocks, is based on the MSCI Frontier Markets 100 Index. The fund has AUM of $16.9 million and trades in average volumes of 388,000. The fund is well diversified, with none of the stocks holding more than 4.7% weight except the top one with 6.3%. Financials dominates in terms of sector exposure, accounting for a whopping 50.2% of total assets. The fund charges an expense ratio of 79 basis points. It has lost 1% in the year-to-date period.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-21320439001645445272016-05-18T07:39:51.210-07:002016-05-18T07:39:51.210-07:00#China-#Pakistan railroad will help curb extremism...#China-#Pakistan railroad will help curb extremism: Ex-Pakistan PM Shaukat Aziz. #CPEC<br /><br />http://www.cnbc.com/2016/05/18/china-pakistan-railroad-will-help-curb-extremism-ex-pakistan-pm.html<br /><br />The China Pakistan Economic Corridor (CPEC), a railroad which will traverse western China through Pakistan, will help job creation as well as help to curb terrorism as people grow more prosperous, Pakistan's former prime minister told CNBC on Wednesday.<br /><br />The $46B deal agreed upon between China and Pakistan will allow China to avoid its current maritime sea routes to bring products into the Middle East and Europe.<br /><br />It will develop connectivity and create economic activity in Pakistan, former Pakistani Prime Minister Shaukat Aziz said.<br /><br />"When you build a road or a highway through an area where there is none, you create economic activity, you create jobs, secondly new cities come up along that route , thirdly you have industrial estates coming so a lot of job creation takes place," said Aziz.<br /><br />Despite a warning from the Pentagon that China is looking to set up a naval base in the country, the Pakistani army chief visited Beijing earlier this week to further discuss the project and the Pakistani army's involvement. <br /><br />The Pakistani army will provide 15,000 special security forces to protect the investment in Pakistan, which has suffered greatly over the years due to security and terrorism issue.<br /><br />"Whenever you have empty bellies, people get more vulnerable and subject to extreme behavior. If you create economic activity and give them a reason to live, if you give them a better tomorrow than yesterday, people tend to be more peaceful," said Aziz. <br /><br />"We have seen over the years that in areas that have grown fast and where economic growth is strong, extremism and terrorism reduces," Aziz told CNBC. <br /><br />"This is a serious initiative and we will do all what it takes to provide security and leverage this linkage between the warm waters of the Arabian sea all the way up to China." <br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-48748915520800635002016-05-15T08:48:21.162-07:002016-05-15T08:48:21.162-07:00Pakistan’s economy has come a long way since it st...Pakistan’s economy has come a long way since it started a structural reforms programme three years ago, bringing back stability and discipline to the economy while restoring confidence in the financial system, State Bank of Pakistan (SBP) Governor Ashraf Wathra told Gulf News in an exclusive interview.<br /><br />------------<br />The overall inflation remained contained to less than 3 per cent during the period July to April in the current financial year as compared to 8.62 per cent in 2014 and 4.53 per cent in 2015. “Our year on year inflation for the current fiscal year ending in June will be 3 per cent. We believe that is a good number considering our original target of 6.5 per cent,” said Wathra.<br /><br />The country’s foreign exchange reserves are close to $21 billion (Dh77 billion) as of May 9, 2016 of which SBP reserves stood at $16.125 billion and that of scheduled banks at $4.802 billion.<br /><br /><br />According to a recent World Bank report, workers’ remittances and lower oil prices contributed most to the accumulation in foreign reserves. Remittances of $9.7 billion in the first half of fiscal year 2016 more than compensated for the trade deficit, and oil prices delivered a 9.1 per cent fall in the import bill.<br /><br />The current lending rate of commercial banks is at about 6 per cent, the lowest in 12 years, in a country where the businesses have borne the brunt of the rate even as high as 18 per cent. Analysts say, in the context of low inflation, the Independent Monetary Policy Committee that sets the interest rates has enough elbow room to keep the rates at the current low or event take it lower.<br /><br />According to Wathra, the aggregate loan growth numbers of the banking sector are very encouraging at the current lending rates. “With a low inflation that is below our target and considering the fact that an emerging economy like Pakistan can accommodate a slightly higher inflation rate, the lending rates could remain low. But it is not inflation alone, rather the overall economic data that will be considered by the Monetary Policy Committee in making adjustments to the lending rates,” he said.<br /><br />In the current and the previous quarters, the overall banking sector credit growth surged in excess of Rs300 billion (Dh10.5 billion) with most of that accounting for long term credit. “Clearly the private sector’s long term credit offtake is picking up momentum, indicating growing demand for industrial credit that leads to higher economic growth prospects,” said Wathra.<br /><br />Pakistan’s Ministry of Finance expects the country’s GDP to grow in excess of 6 per cent in the next financial year, starting this July. While the country achieved 4.2 per cent growth in 2015, it is expected to be 5 per cent this year.<br /><br />http://gulfnews.com/business/sectors/banking/improved-fundamentals-restore-confidence-in-pakistan-s-financial-system-1.1827912Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-81680982299741990002016-05-13T10:35:32.008-07:002016-05-13T10:35:32.008-07:00#China to finance 90% of #Sukkur-#Multan Motorway ...#China to finance 90% of #Sukkur-#Multan Motorway in #Pakistan. #CPEC | DailyTimes - http://go.shr.lc/1OrZcuP via @Shareaholic<br /><br />China will provide 90 percent of the financial assistance for the 393-kilometre Sukkur-Multan Motorway, whereas remaining cost of the project will come from the Public Sector Development Programme (PSDP).<br /><br />An official of the National Highway Authority Thursday said that physical work on the Sukkur-Multan Motorway costing Rs 294 billion had been started.<br /><br />It is also a part of eastern route under the China-Pakistan Economic Corridor (CPEC), which will be completed within three years costing Rs 294 billion, the official said.<br /><br />This motorway passing through Multan-Jalalpur Peerwala Ahmedpur East, Ubaro, Panno Aqil will terminate at Sukkur. Total 54 bridges will be constructed, including one major bridge on Sutlej, he added.<br /><br />The official further said Karachi-Hyderabad Motorway (M-9), which connects Karachi to Hyderabad, is going to be 136-kilometre long with 16 exits and is going to cost about Rs 24 billion.<br /><br />He said the M-9 would later be linked to the Karachi-Lahore and Karachi-Gwadar motorways to constitute the longest tract in the motorway network.<br /><br />The National Highway Authority (NHA), the official said, is taking all possible measures to ensure the timely completion of the China-Pakistan Economic Corridor (CPEC).<br /><br />"The CPEC project comprises modern highway and railway transportation system linking Kashgar in West China to Khunjerab in the north and onwards to Karachi and Gwadar in the south of Pakistan through multiple routes," he added.<br /><br />He said that a number of sections of this mega project had been completed and remaining sections were under construction. He said that the 784-kilometer segment from Khunjerab to Burhan consists of Karakoram Highway (KKH), out of which 335 kilometre from Khunjerab to Raikot had already been upgraded.<br /><br />The official said that the remaining part from Raikot to Islamabad was divided into three sub sections of Raikot-Thakot, Thakot-Havelian and Havelian-Burhan.<br /><br />He said the construction work on 120-kilometre Thakot-Havelian section of the road has started after its ground breaking by Prime Minister Nawaz Sharif recently. He said that the work on 59-kilometre Burhan-Havelian section also known as Hazara Motorway was going smoothly and it would be completed by end of 2017 at a cost of Rs 34 billion.<br /><br />The official said that work on 288km section of the western corridor from Burhan to Dera Ismail Khan would start within weeks. He said the project had been divided into five smaller sections so that work could be completed according to the given time frame. He said that Rs 13 billion PC-1 for acquiring the land required for the project had been approved.<br /><br />The project envisages construction of 285km four-lane expressway from Hakla on M-1 to DI Khan near Yarik on N-55 as part of western route of the CPEC, he said.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-20249300813397377772016-04-29T07:32:07.648-07:002016-04-29T07:32:07.648-07:00#McDonald's Opens in #Quetta — But #Taliban No...#McDonald's Opens in #Quetta — But #Taliban Not Lovin' It. #Pakistan #Balochistan http://nbcnews.to/1WX0h4I via @nbcnews<br /><br />All menu items are halal, and there's even a shawarma-meets-gyro type of wrap to get local tastebuds interested: Behold, the McArabia.<br /><br />You can get a McArabia for just under $3.00. Add a drink and some fries, and you're still at under $5.00.<br /><br />In a country where pork is banned for religious reasons, Sausage and Egg McMuffins are on the menu — but the sausage is made from chicken.<br /><br />Senior militant commander Ehsanullah Ehsan, who is a spokesman for one of the Taliban factions in Pakistan, laughed when asked Friday for his thoughts on the hamburger chain.<br /><br />"Hahahaha, so you are asking me about McDonald's food," the TTP-JA fighter said. "Yes, I know McDonald's and its food but we will never eat it. We don't even consider it as a food. This isn't our food ... We live in the rough, tough mountainous areas and need energy and power to fight against the enemy."<br /><br />A senior member of the Afghan Taliban told NBC News he had once tasted McDonald's food in the Pakistani city of Karachi but it was "too expensive" and tasteless. He said that Taliban fighters preferred mutton and rice.<br /><br />However, he conceded that it was "good when you are in a hurry and have no access to proper food."<br /><br />"We know it's an American food company and our religious scholars have forbidden us from consuming any Western food and beverages," the militant added, saying that he intended to visit the Quetta outlet with friends but would not eat there.<br /><br />Quetta needs a break. Since the Soviet invasion of next door Afghanistan in 1979, it has morphed from a well-manicured city to a violent, refugee-laden hideout of some of the region's most dangerous militants.<br /><br />The capital of the insurgency-ridden Pakistani province of Balochistan has has slowly been stabilized and terror incidents have decreased by more than 60 percent since last year, according to the paramilitary Frontier Corps, which is in charge of the city's security.<br /><br />The new McDonald's is in Millenium Mall, which is located in the highly secured Police Lines neighborhood.<br /><br />Quetta's under-fire cops have been targeted many times near the fast-food restaurant.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-26781867137966653822016-04-25T22:06:15.117-07:002016-04-25T22:06:15.117-07:00#Pakistan's rising volume of lending a positiv...#Pakistan's rising volume of lending a positive sign- all economic indicators up except exports down double digits<br />http://www.khaleejtimes.com/business/economy/pakistans-rising-volume-of-lending-a-positive-sign<br /><br />The latest trend of rising volume of commercial lending to the private sector coupled with larger industrial output and better energy supply and rising FDI inflows are now signalling a significant uptick of the Pakistani economy in FY-2017 that starts from July 1. Commercial banks' lending to the private sector rose by Rs352.3 billion so far in FY-16 as compared to Rs222.3 billion in the same period of FY-15, the latest statistics by Stat Bank of Pakistan (SBP) showed.<br /><br />"A significant part of this credit was availed by the private sector businesses. There was a high credit off-take in December 2015 which was enough to compensate for the lower cumulative flow during the earlier months of FY-16," the SBP said. The demand for the private sector credit was high due to lower cost of credit and better market conditions. The cost of borrowing declined to six per cent - an all time low in last 12 years - as a result of SBP's easy money policy.<br /><br />At the same time, there was a "high deposit growth, and a lower government budgetary borrowing," which created a surplus with the banks that was lent to the private sector. "The improvement in credit to the private sector over the previous year, primarily, was due to larger borrowing by the manufacturing sector, followed by commerce and trade, construction and electricity." <br /><br />The SBP also reported that with the exception of ship breaking which received Rs13.4 billion credit that was lower than the sectors past borrowing, the improvement in larger credits to other sector was broad-based. While credit for working capital and fixed investment categories, showed higher growth. But credit for trade financing was lower. One of the reasons for larger lending to the private sector was that government borrowing to cover its big budgetary deficit was lower than last year. In fact, government was funding its requirements by launching its longer - term investment bonds, rather than short-term and more expensive borrowing from the commercial banks which also had squeezed the bank credit for the private sector.<br /><br />That covers the broad spectrum of the commercial lending. Does it also indicate in which direction is the economy moving?<br /><br />Another key factor for a potentially good omen for the economy to grow faster is expansion of the large-scale manufacturing (LSM) sector. Its output growth rose 4.35 per cent year-on-year in the first eight months July-February of FY-16. In February, 2016 alone the LSM sector growth was 2.83 per cent higher as compared to the like month of FY-15, according to the SBP report. The key sub-sectors which contributed to the LSM growth in the first eight months of FY-16 were: automobiles 27.67 per cent, fertiliser 16.95 per cent, chemicals 11.26 per cent, leather products 11.51 per cent, rubber products 11.64 per cent, and non-metallic mineral products 8.61 per cent. <br /><br />In the same period, iron and steel sector produced 19.76 per cent more billets and ingots. The capacity of the sector also expanded in this period in order to feed lager exports. The automobiles sector expanded as production of trucks rose 44.23 per cent, buses 77.54 per cent, cars and jeeps 37.10 per cent, light commercial vehicles (LCVs) 104.45 per cent, and motorcycles was up 17.1 per cent. However, tractor production was down 44.65 per cent.<br /><br />In the electronics sector, production of air conditions rose 28.05 per cent, switch gear by 28.14 per cent, electric transformers 1.8 per cent, TV sets 1.74 per cent and storage batteries 2.89 per cent, besides various rises in production of other electronics.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.com