KU remained open for just 151 days in 2010
Karachi, Jan 11: A distinct lack of security, armed clashes on campus, bad governance, political pressure and 214 holidays disrupted the education of students at the Karachi University, the largest varsity of Pakistan, in 2010.
Students hardly had the opportunity to attend their classes as a number of scheduled and unscheduled holidays badly interrupted the academic year. In 2010, the university remained closed for a whopping 214 days. This means that the students only attended university for about 5 months, the whole of last year.
Clashes between rival groups of students and the uncertain security situation on campus, coupled with the Sindh government finding every possible excuse to declare a holiday, forced KU officials to close the campus on several occasions.
Out of the 214 holidays in 2010, 20 were scheduled holidays, 45 were for summer vacation, 15 for the winter break and 104 for the weekends on Saturday and Sunday. In addition to this, the university remained closed for 30 days due to various reasons.
Although the school was not closed during Students’ Week in late October this year, classes were only held up till 11:00am. It seems as though the festive mood of the students also rubbed off on the teachers as scheduled classes were seldom held during Students’ Week.
The regular closures and interruptions are reflected in the fact that examinations scheduled to be held on December 20, 21, 22, 27, 28 and 29 have now been postponed till January and February of 2011. It still remains uncertain whether examinations will be held as per the delayed schedule. Moreover, the new academic year, which was all set to begin on New Year’s Day, has been delayed till January 17.
On condition of anonymity, a senior official of Karachi University said that there are no set criteria for declaration of holidays. “The vice-chancellor simply bides his time and takes no real decision if some sort of a law and order situation arises on campus.
Meanwhile, calls from the electronic and print media continue to pour in, asking senior officials about whether the university is open or closed on that given day. There have been some days when the university was actually closed, but officially remained open. This causes a lot of frustration and confusion among students as well as their parents,” said the official.
The administrative ability of senior officials was put to the test due to a complete lack of coordination between people representing the university to the media. On some occasions, the media officer and the Public Relations Office gave conflicting statements to the media regarding closures without informing the registrar. The news
Rabi crops at risk as fertiliser prices soar
LAHORE: The production and growth of crops this Rabi season are likely to be undermined if the government does not ensure urea supply to growers in time and at cheaper rates, farmers said.
Urea prices have risen from Rs850 per 50kg bag to Rs1,300 per bag in three months. This price hike is expected to cause a decline in the production of wheat, fruits and vegetables.
Farmers Association Pakistan (FAP) spokesman Dr Mohammad Tariq Bucha criticised the urea price hike, saying it was due to the government’s failure to import 250,000 tons of fertiliser. According to him, despite Saudi Arabia Basic Industries Corporation denying export of such a large volume, the government has not yet approached any other urea exporter.
He demanded that the government arrange steady supply of urea in the market to achieve the production target. He also condemned the 3.5 per cent withholding tax that was levied on agricultural produce. Bucha argued that the withholding tax will squeeze farmers’ liquidity, as the middlemen will either stop buying or will charge the tax from the farmers thereby paying less for their produce.
Moreover, he said that the notification of applying the 3.5 per cent withholding tax, issued by the Federal Board of Revenue (FBR) on December 31, 2010, is self-contradictory as sub-section (b) states that agriculture produce is exempt from tax.
Meanwhile, a senior official of the National Fertiliser Corporation Limited said that the government is unlikely to ensure uninterrupted gas supply to fertiliser producers, particularly in the wake of high demand from residential consumers. He said that catering to the demand of fertiliser producers – who consume around 200 million cubic feet of gas per day, is not possible under the current Sui Northern Gas Pipelines Limited’s load management plan.
Production of smaller vehicles with engine capacity of 800cc to 1,000cc will be encouraged which might affect sales of existing market leaders, according to experts.
KARACHI: The federal ministry of industries and production has assured Japanese car assemblers in Pakistan that they won’t be harmed by the new entrance policy for the automobile sector through which the government intends to facilitate new players.
Federal Minister for Industries and Production Mir Hazar Khan Bijarani, talking to The Express Tribune, said that the government has prepared a new entrance policy for the auto sector so that production of low-cost vehicles could be encouraged. He also emphasised that the interests of car assemblers already present will be protected and no such incentive will be provided to the new players which affects the interests of existing assemblers.
Bijarani was speaking on the sidelines of a ceremony held to unveil the annual report of the Export Processing Zone Authority here on Monday.
The car assemblers are already uncertain about the tariff waiver for the investment that they plan to make. These car assemblers are being pushed by the government to reduce the prices of vehicles, a reason why the government increased the age limit for imported used vehicles in December. However, the decision was withdrawn later.
On the other hand, the car manufacturers face daunting challenges which include increase in raw material costs, rupee depreciation and escalating prices of gas and electricity which are swelling the production cost. Bijarani said that the government has requested the local assemblers to reduce prices of automobiles and has also urged the new entrants to produce smaller cars at cheaper rates. Furthermore, he said that the government is in talks with Chinese and South Korean vehicle manufacturers.
Experts are of the view that with the new policy, production of smaller vehicles with engine capacity of 800cc to 1,000cc will be encouraged which might affect sales of existing market leaders in this category and hence competition will lead to a price reduction. The auto industry has rejected the perception that the increase in prices of cars is uncalled for and they substantiate it by saying that from June 2009 to December 2010 the rupee depreciated by two per cent against the yen and inflation rose 13 per cent, which fueled the price increase. Contrary to that, from June 2009 to December 2010 the prices of new vehicles have only increased by an average of seven per cent, they said.
Equity category may outperform stock index, says analyst
KARACHI: The size of the mutual funds industry appreciated 12 per cent in the last six months (July-December) to stand at Rs223 billion. The industry showed signs of recovery on the back of demand witnessed in the money market funds category as well as the equity market’s tremendous performance over the last three to four months, says InvestCap in a research note.
A mutual fund is a professionally managed collective investment scheme that pools money from investors and invests typically in investment securities such as stocks, bonds, short-term money market funds, commodities among others. Income is earned from dividends on stocks and interest on bonds. By owning shares in a mutual fund instead of owning individual stocks or bonds, the risk is spread out.
Equity category to shine
Despite the prevailing economic instability in the country amid higher interest rates, the equity market continues to show an upward trend, said InvestCap analyst Mazhar Sabir.
“Local investors are expected to generate more interest in the market on expectation of early launch of a leverage product alongside stable foreign inflows,” said Sabir.
“From the equity funds perspective, stock funds having invested heavily in blue chips may outperform the stock market index.”
Open-ended funds dominate
The value of open-ended funds increased by 16.2 per cent to reach Rs195 billion while closed-end funds showed a decline of 11.2 per cent to Rs28 billion.
The reason behind the two categories moving in the opposite direction was the fact that three closed-end funds converted into open-ended funds during the period under review.
The money market funds earned an average annualised return of 11.3 per cent during the first six months (July-December) of financial year 2010-11 as fund managers in the money market got better rates in short-term placements, said Sabir.
The income funds posted an average annualised return of 11.1 per cent from July to December, but the size of the funds shrank seven per cent to Rs43 billion. The category has been continuously declining for the past six months.
File photo shows trucks carrying supplies from Afghanistan awaiting clearance at the Chaman. PHOTO: PPI
ISLAMABAD: The new Afghanistan-Pakistan Transit Trade Agreement will be formally implemented on February 12, when the first Pakistani truck will leave for Central Asian states carrying rice or oranges through Afghanistan.
Senior officials of the Federal Board of Revenue (FBR) told The Express Tribune that the implementation of the agreement will reduce smuggling and misuse of transit trade. They said that Afghan trucks carrying goods under the transit trade arrangement will start depositing guarantee money from the same day. Officials of the ministry of commerce asserted that access to Central Asian states will increase the volume of exports to these countries by $1 billion.
They also said the first truck will enter Afghanistan through the Torkham border on February 12 as it was mandatory for the execution of the agreement to take place within 30 days of diplomatic exchange of the instrument of ratification between Pakistan and Afghanistan.
According to the authorities in the ministry of commerce, a ceremony marking the inauguration of the new transit trade agreement has been proposed by Afghan authorities but Pakistan has not yet made a decision on it.
To ensure effectiveness and proper implementation of the agreement, the Afghanistan-Pakistan Transit Trade Coordination Authority (APTTCA) is being set up. In addition to that, arbitration tribunals will be established to mediate and solve any possible conflicts between the two countries.
Ministry of commerce officials added that the agreement will be for a period of five years which will automatically be extended for another five years on completion of the first term.
They said that if either country had a complaint regarding smuggling, it would take it up with the APTTCA along with facts and figures of the loss inflicted to the economy. The authority would then convene a meeting of officials of both the countries for reaching a consensus decision in order to compensate the complainant within three months of the receipt of the complaint.
July-Nov data shows mobile phone imports rise 100%.
KARACHI: Palm oil prices are a great concern for the government which wants to ease the burden on the national kitty, said Federal Minister for Industries and Production Mir Hazar Khan Bijarani.
Addressing a joint press conference with the Malaysian Minister for Plantation Industries and Commodities, Tan Sri Bernard Dompok, on Tuesday, he said, “we want to make sure that there is no excessive burden on the country’s foreign reserves,” adding the two countries have “to work towards maintaining a sustainable trade balance.”
Responding to questions about local cultivation of oil palms, the federal minister asserted that “experiments have been carried out successfully at the facility developed in Thatta, with the help of the Malaysian government.” He explained that palm oil may be produced indigenously but added that it will take time to do so.
Commenting on the price of palm oil, he said that it currently stood at 3,700 ringgit per ton and would not drop below 3,000 ringgit this year. He pointed out that Malaysia is busy engaging the United States and the European Union in efforts to stem opposition of palm oil from various pressure groups.
Traders see 2 million tonnes in exportable surplus.
ISLAMABAD: Pakistan’s wheat harvest from the 2010-11 crop is expected to be as much as 23.5 million tonnes, short of the targeted 25 million but still leaving enough surplus for exports, industry officials said on Tuesday,
A decline in the area under wheat cultivation, low water supplies in rain-fed regions and fertiliser shortages will probably contribute to lower output, said Ibrahim Mughal, chairman of Agri Forum Pakistan, a farmers’ association.
“Because of these reasons, we are not looking at more than 23.5 million tonnes of wheat output this year,” said Mughal.
Pakistan consumes about 22 million tonnes a year, and harvesting of the new crop will begin in April.
Mughal said the situation may improve slightly if water and fertiliser availability improves.
Farmers have sown wheat over an area of little over 8.5 million hectares this year, down from 9.13 million last year when the country produced a bumper crop of about 23.8 million tonnes of wheat, Mughal said.
Farmers’ sowing estimates differ slightly from the official statistics, which showed wheat sown on 8.79 million hectares by late December, against the government target of 9.04 million.
Officials of the Food Ministry, which compiles the wheat data, said they expected a good crop after summer floods, which devastated large farmlands but also increased fertility in wheat-growing areas.
The exact crop estimates will likely be available by March, but one Food Ministry official suggested the output might be close to the target on better recovery.
Industry officials, however, disagreed.
“Given the area under cultivation this year, we expect the output to be about 23 million tonnes,” Asim Raza, chairman of the Pakistan Flour Mills Association, told Reuters.
Despite the lower-than-targeted output, Pakistan, Asia’s third-largest wheat producer, will have at least 2 million tonnes of exportable surplus, traders said.
Pakistan in August deferred earlier plans to export 2 million tonnes of surplus wheat after summer floods washed away at least 725,000 tonnes of the grain.
But it resumed wheat exports this month for the first time in three years after the government lifted a ban in December, when the bumper crop plus 4.2 million tonnes in carryover stocks led to a market surplus.
Official wheat stocks stood at 7.5 million tonnes on Monday.
Pakistan has sold 200,000-500,000 tonnes of wheat mainly to Bangladesh and Myanmar, and international traders are taking positions for more deals after Islamabad lifted the ban, traders said last week.
No discovery made in July to December period
KARACHI: Oil and gas exploration drilling in the country slowed down by 32 per cent in six months (July to December) of the current financial year 2010-11 at a time when the government is striving to tap more indigenous energy resources.
This is negative in a sense that the slowdown in drilling activity could reduce the much-needed future oil and gas production, according to Topline Securities.
No discovery has been made so far from the drilling in the first half of 2010-11, said Topline Securities analyst Farhan Mahmood in a research note.
Only 24% target achieved so far
The 28 exploration and production companies in the country have drilled only 19 wells compared with 80 wells targeted for fiscal year 2010-11, according to data compiled by Pakistan Petroleum Information Services. In the first half of fiscal 2009-10, 28 wells were drilled by these companies.
The swelling circular debt has affected the companies’ liquidity and restricted their drilling portfolio, said Mahmood.
Moreover, carry-over wells of last year are compelling the companies to focus more on them rather than new wells.
Oil and Gas Development Company drilled just one exploratory well so far in the current fiscal year against its target to drill 10 wells. The company drilled four exploratory wells during the same period last year against the target of 23 wells.
“There would be a significant impact on the benchmark KSE 100-index” – InvestCap Head of Research Khurram Shehzad. DESIGN: ESSA MALIK
KARACHI: Franklin Templeton Multi-Asset Strategies is lowering the allocation of its investments to emerging markets from 30 per cent to 25 per cent, reports informed.
The company’s Senior Vice President, Stephen R Lingard said that the switch would take place in the coming “weeks and months”. He added that the allocation of funds to developed markets would be simultaneously increased from 70 per cent to 75 per cent.
According to well informed market sources, foreign investors currently hold about 450 million shares of the total free float of Oil and Gas Development Company Limited (OGDCL) which stands at about 650 million shares. Of these more than 300 million shares are held by Templeton.
“Their (Templeton) most significant holding is in OGDCL, so any selling that they initiate will likely impact that stock the most” asserted BMA, Head of Research, Hammad Aslam.
He added that if the fund does in fact plan on reducing its allocation in the country’s equities, energy sector stock prices could be in for a bashing.
However, expressing skepticism over the deal, he added: “This is one of the biggest funds in the world and it is very unusual for them to announce their future strategy in advance”.
Chief Executive, Arif Habib Investments, Naseem Beg said, “The decision would be a loss for them more than anyone else because local funds have already been suggesting that the stock is overpriced at these levels”.
“The company’s Asia Growth Fund is the arm that mostly invests in Pakistan’s equities” asserted InvestCap, Head of Research, Khurrum Shehzad. He added that in terms of its investments in Pakistan, this fund is predominantly invested in energy stocks.
Shehzad argued that “even if they sell only 2 or 3 per cent of their stake in OGDCL, there would be a significant impact on the benchmark KSE 100-index”. He added that at this point OGDCL is contributing about 1500 points to the index so a sell-off in that stock “could affect the broader market sentiment as well”.
Foreign investors have led the local bourses in terms of investments in recent months. According to data maintained by the National Clearing Company of Pakistan, foreign portfolio investors have made net investments worth more than $526 million in the local equity markets during 2010.
During the same period, the benchmark KSE 100-index gained about 2584 points to end the previous calendar year at 12,022. Local stock analysts fear that some of those gains could be eroded if Templeton’s plan to reduce the proportion of its investments in emerging markets draws funds out of the local exchanges.
Arif Habib Investments will set up counters at MCB Bank branches
KARACHI: Arif Habib Investments (AHI) and MCB Asset Management are to merge and a formal shareholder agreement will be signed in the coming days, AHI Chief Executive Nasim Beg said on Tuesday.
Explaining the rationale behind the deal, Beg told The Express Tribune that the company “wants to enhance its ability to reach investors as the interest among public for mutual funds is growing.” He added that the merger would allow AHI to utilise the widespread branch network of MCB Bank because instead of setting up separate outlets for the funds, the company will set up counters at branches where qualified staff can interact with existing and potential clients.
He believed that the bank is well positioned to complement the services offered by the asset management companies due to its presence in relatively affluent markets of the country. He said that the net asset base of AHI and MCB Asset Management stands at about Rs13 billion each, adding that the combined entity would boast a hefty asset base of Rs26 billion.
He explained that a meeting of shareholders will be called for final approval of the deal, which will be followed by legal proceedings. Beg stressed that the combined entity will become the second largest fund in the country after the National Investment Trust (NIT).
Two funds converted
According to an official release issued on Tuesday, AHI has converted its Pakistan Strategic Allocation Fund (PSAF) and Pakistan Premier Fund (PPF) from closed-end schemes into open-end ones.
Closed-end funds issue a finite number of shares in an initial public offering and after investors have bought them, they can only sell them on the open market not back to the fund. On the other hand, open-end schemes can be redeemed from the issuer at any time.
“During the last market crisis, there were many people who had invested in closed-end funds and when they went to redeem their funds they received peanuts for their holdings,” explained Beg, adding “we want to make sure that investors have a safe way of exiting the fund whenever they want to instead of having to sell their holdings at a significant loss in the market.”
He pointed out that the company had previously converted its Pakistan Capital Market Fund (PCM) “into an open-end scheme on November 22, 2010 in the spirit of safeguarding the best interest of PCM unit holders.”
Steel, cement and REITs
Aisha Steel, a local steel sheet manufacturing facility, will be up and running by mid-2012, revealed the AHI chief executive. “AHI entered into a joint venture with MetalOne, which itself is a subsidiary of Mitsubishi, for the manufacture of steel sheets used in the construction of car bodies,” said Beg.
He explained that his company had initially entered into the agreement with a 25 per cent stake but that it has now increased its holding to almost 60 per cent.
He also revealed that AHI has acquired Al Abbas Cement and that the company will soon launch its Real Estate Investment Trust (REIT) with a 13-acre project on the outskirts of Karachi. “We are awaiting approval from the Securities and Exchange Commission of Pakistan for four separate REIT licences,” he said.
Beg explained that the company had earlier acquired Javedan Cement. That company’s cement manufacturing facility had been shut down but its land will now be used to develop ‘New Nazimabad City’. He added that investors will be able to invest in the project through the REIT and will earn returns from the proceeds on the sale of these properties.
Beg has expressed hope that the apex regulator will soon approve the licences so that the real estate project can be formally launched.
Subsidiary headed to US market
Fatima Fertiliser, one of the subsidiaries of Arif Habib Group of Companies, may be listed at the New York Stock Exchange (NYSE) in the coming months, official sources told The Express Tribune.
Meanwhile, Beg confirmed that “efforts are being made to launch American Depository Receipts (ADR) of one of the group’s companies.” The issue would allow institutional investors, such as mutual funds that invest at the NYSE, to trade in certificates holding title to the company’s shares.