Pakistan Culture Day celebrated in Ankara

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ANKARA: 30 March 2015:   In connection with Pakistan Day celebrations, a day long Pakistan Culture Day featuring cultural performances including national songs, establishment of stalls displaying Pakistan culture and handicrafts, and a fashion show was organized in Ankara over the weekend.

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Pakistani students studying in various Turkish universities together with the Urdu Language Society of Turkey, Society for Intercultural Research and Friendship (SIRF), and the Embassy of Pakistan Ankara organized the event.

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Ambassador of Pakistan Mr. Sohail Mahmood, Head of Turkey-Pakistan Parliamentary Friendship Group in Turkish Parliament Mr. Burhan Kayaturk, Chairman of Urdu Language Society Dr. Furqan Hameed and President SIRF Mr. Nazmi Kumral inaugurated the Culture Day proceedings. A large number of Pakistani, Turkish and international students, and members of Pakistan community attended the event.

Lauding the excellent performance of Pakistani students during the Culture Day activities, Ambassador Sohail Mahmood highlighted the vital role of the youth in Pakistan’s development as well as positive projection of the country worldwide. He added that Pakistani students are the true ambassadors with a vital role in further promoting Turkey-Pakistan friendship and cooperation. Referring to the centuries-old Pakistan-Turkey relations, he said these excellent brotherly ties are being reinforced with a strong economic partnership. In this context he highlighted the decision by the two sides to enhance bilateral trade and work on a Free Trade Agreement (FTA).

Mr. Burhan Kayaturk said the students are a real bridge between the two countries. He assured every possible support to the students in organizing such events in future. Mr. Nazmi Kumral in his address informed the audience about SIRF’s role in promoting harmony between various cultures. In this context, he also highlighted ongoing collaboration with Pakistani students in Turkey.

Pakistani and Turkish students jointly presented a fashion show which was appreciated by the audience. Visitors also appreciated Pakistani Hena stall where expert Pakistani students applied best hena designs. Meanwhile, the Pakistan Food Festival, organized by the Embassy at Swissotel, is continuing until 31st March 2015.

SME Bank no more sustainable as liabilities mount to Rs 5.2 billion

SME Bank

ISLAMABAD: The Federal Minister for Finance, Senator Mohammad Ishaq Dar chaired a meeting here today to review various options regarding the future working of SME Bank including its merger. The meeting was attended by senior officials from SME Bank, SBP, Finance Division and National Bank of Pakistan.

President SME Bank Ihsan ul Haq Khan gave a presentation on the current position of SME Bank and also dilated on its future prospects under different proposed arrangements including its merger with NBP. The Finance Minister was informed that the audited accounts of the Bank up to December 2014 were available and the bank’s financial standing revealed it was in no position to sustain itself in the face of Rs. 5.2 billion worth of liabilities.

The Minister after detailed deliberations by participants of the meeting viewed that SME bank would have been a great national asset if it had been professionally managed in the past. He said it would have proven to be an effective source for development of SMEs. “It is my sincere desire that the Bank is invigorated and continues its work following world best practices.”

The Finance Minister directed the SBP to come up with concrete proposals in a week’s time on how to turn the SME into a truly vibrant finance institution. “These proposals would be discussed in the next meeting and it will be ensured that the bank’s valuable services are available for the development of the SMEs”, Dar remarked.

SBP sets up Center to promote Islamic banking

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KARACHI: The Finance Minister, speaking at the State Bank of Pakistan, Karachi today on the occasion of the opening ceremony of proposals received to establish a Centre of Excellence for Islamic finance education expressed his pleasure over the efforts being swiftly expedited to create the Centre that was announced last year. He said, ‘I would like to extend my special appreciation to the State Bank of Pakistan for supporting such initiatives. I am optimistic that this Centre will further strengthen the foundations of Islamic finance in the country through rigorous research and by addressing the challenge of the dearth of human resources.’

The Minister added that rapidly increasing presence of Islamic finance around the globe is a long awaited development needed to address the issues created by the interest based financial system.

Further, he said, ‘looking at the major jurisdictions in the world now promoting Islamic finance, whilst leading policy makers and regulators begin to take a serious look at a Shariah compliant system as a viable alternative to remedy the flawed financial architecture of today, gives me a great deal of pride as a Muslim.’

The Finance Minister, Senator Muhammad Ishaq Dar, showed his commitment to facilitate the development of the Islamic finance industry by creating an enabling environment. After coming to power, the Government constituted a high level Steering Committee for the Promotion of Islamic Banking in the country. ‘Through this Committee we have brought all stakeholders together on one platform to devise strategy and develop practical solutions for the challenges with which the industry is confronted,’ he said.

The Governor, State Bank of Pakistan, Ashraf Mahmood Wathra while giving his welcome address said that Islamic finance has witnessed tremendous growth in the last four decades and its outreach currently spans across the globe, with an asset base of US$ 1.8 trillion. ‘Having established itself as a viable alternative during the last financial crises, standard-setting bodies are increasingly viewing Islamic finance as means to promote broad-based, inclusive economic growth’, he said.

Islamic banking industry in Pakistan has also grown significantly since its re-launch in 2001. He added that given its growth trend, growing interest in this banking segment and commitment of the Government, the future outlook of the industry looks quite positive. The industry is likely to exceed the target of acquiring a 15 per cent share in the overall banking industry by 2018 as envisaged in its strategy plan 2014-18.

Governor Wathra, however, indicated that despite showing significant growth, Islamic banking industry in Pakistan is still confronted with a number of challenges. ‘Among these, shortage of qualified Islamic finance professionals, who can lead the industry into the next level of growth and development is one of the biggest challenge faced by the industry,’ he remarked. Adding further he said that Islamic finance industry in Pakistan needs to enhance and upgrade its human capital base including Shariah scholars, financial experts, economists, academicians and researchers to realize the true market potential and emerge as a formidable player in the arena.

Earlier, the Steering Committee for the Promotion of Islamic banking constituted by the Government of Pakistan in December 2013, presented its Interim Progress Report to the Finance Minister. The ceremony was attended by the Governor, State Bank of Pakistan, members of the Steering Committee, Presidents/CEOs of Islamic banking institutions, Takaful and Modaraba companies, Shariah scholars, academia and members of the chambers of commerce.

The Chairman of the Steering Committee, Mr. Saeed Ahmad, apprised the Finance Minister about the action plans identified by the Committee under its Terms of Reference. The Chairman stated that significant progress has been made on key priority areas including review of legal, regulatory and taxation frameworks, developing liquidity management solutions, developing solutions for conversion of government debt into Shariah compliant financing, development of an Islamic capital market, reforms in the Mudaraba sector, and establishment of a Centre of Excellence in Islamic Finance.

The Committee having representation of all key stakeholders including the Islamic banking industry, Shariah fraternity, private sector and regulators has made significant efforts towards formulation of recommendations for promoting Islamic finance in the country. The Finance Minister lauded the Committee for its achievements and, given its challenging task, extended the life of the Committee for another year. The Finance Minister further stated that efforts of the Steering Committee and effective implementation of its recommendations by all stakeholders will provide real impetus to the growth of Islamic finance in the country. The Finance Minister assured the Government’s support towards the goal of eliminating riba from the economy and reiterated the need for timely execution of the Committee’s recommendations.


ADB to provide $1b for smart meters

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ISLAMABAD: Asian Development Bank has offered one billion dollars loan to Pakistan to introduce the smart meters system in the country to end the culture of theft of electricity and non-payment of bills.

With the smart meters, the consumers would purchase units in advance, just like the pre-paid mobile phones system in Pakistan. This system would help the consumers to control their electricity bills and use electricity efficienctly.

The Country Director, Asian Development Bank, Mr. Werner Liepach had a meeting with Finance Minister, Ishaq Dar here Friday morning to discuss smart meters project.

During the meeting matters pertaining to ADB’s one billion dollar smart metering project were discussed in detail. The meeting was informed that as soon as codal formalities were completed by the Ministry of Water & Power and Planning, the project would be considered by the board of Asian Development Bank.

Mr. Werner also briefed the meeting about the flood rehabilitation activities in Kashmir and Punjab, an area where ADB was providing support both in terms of finances and supervision with particular focus on developing resilience mechanism, guarding against floods in future.

While appreciating ADB’s support and contribution, the Minister asked concerned officials from the Ministry of Water and Power and Planning & Development to finalize arrangements to speedily undertake the power transmission project.

The Finance Minister appreciated ADB’s continued support for economic development in Pakistan.


SBP allows loan for solar energy with home-financing

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KARACHI: The State Bank of Pakistan has been extending its endeavors to enhance the housing financing in Pakistan by creating an enabling regulatory environment through conducive Prudential Regulations (PRs) and market development through issuance of guidelines, setting indicative targets and promoting capacity building of financial institutions, etc.

Keeping in view current energy crises in Pakistan and to promote alternative energy solutions at affordable finance, SBP amended its housing finance PRs to allow banks for extension of loans to individuals for solar energy solutions for residential use as part of home loans.

Previously, financial institutions were extending finances for solar system under the head of personal loan for maximum tenure of 5 years. However, after this amendment in Housing Finance PRs, banks/DFIs can finance to individuals for solar energy systems maximum upto ten years which will make financing affordable for the borrower.

SBP believes that this facility will increase the use of solar energy solutions at household level and will also increase housing finance in Pakistan. Outreach of housing finance in Pakistan, in terms of income groups and geography is very limited.

Housing and construction plays an important role in an economy. Around 50 industries and 70 percent of the unskilled labour are associated with construction sector. Housing finance supplements radically in long-term economic growth via job creation, economic linkages and in raising living standards of people.

Gwadar port inching towards uplift with slow pace: DG NCMPR


Karachi: National Centre for Maritime Policy Research (NCMPR), a constituent unit of Bahria University organized a Maritime Discourse on the topic “The Future of Gwadar” at Bahria University on 20th March, 2015. NCMPR provides a valuable platform for discussing maritime issues being faced by Pakistan. “Maritime Discourse” is a series of lectures, organized by NCMPR.

The CEO of China Overseas Port Holding Company Mr. Zeng Qingsong was the keynote speaker. In his speech, he highlighted the significance of the Gwadar Port in the future. He said that “Gwadar is strategically located in proximity of major shipping routes emanating from the Gulf. Gwadar and Pakistan China Economic Corridor are important for both China and Pakistan.”

Moreover, he elaborated the economic and geographic importance of the Gwadar port by comparing statistics of other ports in Pakistan. The core objective to conduct this discourse was to shed light on the significance of Gwadar Port and the role it can play to boost the economy of Pakistan in future.

Gwadar port offers multi-dimensional advantages and will influence the geo-strategic and economic environment in the region.

Question and Answer session was held after the speech of Mr. Zeng, to answer the queries of the participants.

The Director General NCMPR, Vice Admiral Asaf Humayun HI(M) (Retired), said in his closing remarks said “Gwadar is inching towards its development at a slow pace whereas the whole nation desired to see the progress and prosperity at a much faster pace. He said “two things will actually determine that how fast Gwadar can progress, one is security and the other is connectivity”. He stressed on the need to have due regard to the preservation of environment, which should be a part of all development work in Gwadar area.

National Aviation Policy 2015 approved

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Harry Javed/ISLAMABAD:

Economic Coordination Committee of the Cabinet here on Thursday approved a number of projects and policy documents including the National Aviation Policy. The Federal Minister for Finance Senator Muhammad Ishaq Dar chaired the meeting at the Prime Minister’s Office.

At the outset, ECC considered and approved the National Aviation Policy 2015 with consensus of the house which aims to turn the aviation sector into a truly vibrant sphere of the economy. The previous Aviation Policy was approved in the year 2000. Due to numerous changes in the aviation industry all over the world, the new Policy has been developed by the Aviation Division after seeking inputs from all the stake holders, said Mr. Shujaat Azim, Special Assistant to Prime Minister on Aviation. He briefed the meeting about salient features of the Policy and added that smaller aircrafts would provide air travel service between smaller cities. Cargo facilities will be enhanced and cargo villages established in Northern and Southern parts of the country. With the new Aviation Policy the current capacity of handling 130,000 metric tons of cargo will be doubled, Azeem told the Committee.

The Finance Minister said, “we are hoping that in the next budget which is just two months away, we will be announcing incentives for the aviation sector in line with the new Policy.”

The ECC also approved proposal put forth by the Ministry of National Food Security and Research for extending the period for export of 1.2 million tons of wheat for Punjab and Sindh by one month. The new cutoff date for Sindh will now be 30th April and for Punjab, 15th of May. On another proposal for imposing regulatory duty on import of wheat and wheat products, ECC while lifting ban on the import of wheat products, approved that a uniform 25% regulatory duty on the import of wheat and wheat products would be charged henceforth. The decision was taken to support the local farmers, who had been adversely affected by the decreasing international wheat prices, said the Finance Minister.

ECC also approved an amount of Rs. 96 million for the payment of three months’ salary to the employees of Pakistan Machine Tool Factory (PMTF) Karachi.

The proposal by Privatization Division for levy of 12.5% regulatory duty on import of hot rolled products, pipes and all such imported items also received a nod of approval from the ECC.

ECC today also gave consent for the provision of another 40,000 metric tons of wheat to the United Nations World Food Program for the temporarily displaced persons of North Waziristan Agency and KP.

ECC approved the proposal submitted by the Ministry of National Food Security and Research for providing Commodity Finance for Public Sector procurement of wheat of the 2014-15 crop. The Financial requirements for this year’s procurement will be around Rs. 222 billion and it is expected that the four provinces and PASSCO will procure around 6.600 million tons of wheat.

ECC on a proposal from the Ministry of Water and Power approved the Standardized Project Agreements for Solar Energy Based Projects under the policy for Development of Renewable Energy for Power Generation. Accordingly AEDB was authorized to make any project specific amendments in these standardized project Agreements for Solar Power projects as required during negotiations that do not increase GoP obligations or liabilities beyond those stipulated in the said Project Agreements. It may be mentioned that GOP Policy for Developing Renewable Energy For Power Generation (2006) provides for standard agreements for grid-connected renewable energy IPPs. These standardized agreements include the Implementation Agreement (IA) and the Energy Purchase Agreement (EPA) which provide the legal and and contractual framework for the design, financing, engineering, procurement, construction, commissioning, operation and maintenance of power projects based on solar energy.

Similarly ECC on another proposal from the Ministry of Water and Power,  accorded approval for Standardized Security Documents for Coal Power Projects under the Policy for Power Generation Projects 2015. Simultaneously ECC approved Supplemental Agreement with the provision that the revolving account (equal to 22% of monthly invoicing) for the CPEC Power Projects be opened and maintained by the power purchaser for which the Ministry of Finance would provide the guarantee to fund such revolving account in case the power purchaser failed to place and / or maintain the required funds in such account. Further as requested in the proposal ECC authorized Board of PPIB to make and approve project specific amendments in the standardized coal security package documents required during negotiations provided GOP obligations or liabilities were not adversely affected.

Why stock market facing crash-like situation? KSE loses Rs550b

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Stock market players are playing 20Twenty with stock market. You can see today’s graph that shows vulnerability in Karachi stock market that set record in mid-Feb by crossing 35,000 points and now hovering below 32,000 points. Yesterday KSE-100 index lost another over 800 points.

When the market players talk of bad law and order situation, they forget the fact that when PML(N) formed its govt in June 2013, the KSE-100 index closed at 21,000 points on 2nd of June. From June 2013 to mid-Feb 2015 the benchmark index mounted to above 35,000 points despite all troubles and terrorist attacks.

From mid-Feb 2015, the stock market has lost more than 3000 points without any solid reason and it appears that the market players have joined hands to bulldoze the bullish sentiment of the market for their vested interests _ selling shares at high rates and they will buy again at low rates _ this is the way to mint millions and billions in few days.

Text and picture of J. Choudhry

Here is my detailed story that I filed for Daily The Pak Banker yesterday.

Karachi stock market erodes over Rs550b in panic

By Javed Mahmood/KARACHI (

The recent twin blasts outside churches in Lahore have further triggered uncertainty at the stock market that had caused serious blow to the trading sentiment, value of the shares and volume of trade.

On Wednesday the KSE-100 index lost 739 points because of panic selling that pushed the index down to 31,600 points. The volume of shares trading also fell to around 125 million shares as most of the market players abstained from taking fresh positions. A month ago the trading volume of the KSE remained much above 350 to 400 million shares per day as market was setting new records with bullish sentiment.

In the first week of Feb 2015, the KSE-100 index crossed the record high mark of 35,000 points, but a few days after hitting the new milestone, the stock market turned to the reverse gear.

From mid-Feb 2015, the Karachi stock market had lost more than 550 billion rupees worth market capitalization amid deepening uncertainty on the front of security situation.

The twin blasts outside the two churches in Lahore added fuel to the fire and the market became more vulnerable and had lost more than 1300 points in just three days of this week.

When the KSE benchmark hit the 35,000 points, the market capitalization of the KSE mounted to 7.55 trillion rupees that had now squeezed to below 7 trillion rupees because of consistent bearish sentiment, uncertainty in market and selling pressure.

During the past few weeks, the foreign investors have pulled out of the market more than 500 million dollars worth shares and this selling tendency of the foreigners motivated the local players to off-load their stake as well that caused a serious blow to the best-performing stock market in the region.

Analysts wonder as to why the market is consistently crashing as most of the key economic indicators are positive, discount rate, inflation are declining, foreign exchange reserves are at comfortable level while the Pakistan-IMF loan programme is also progressing smoothly.

In Jan 2015, the KSE-100 index crossed the 33,000 points benchmark and the market players anticipated 38,000 points next target by June this year. However, soon after the benchmark index crossed the 35,000 level, the leading foreign and local investors have started off-loading their positions, creating panic and vulnerability in the stock market.

If the stock market could move from 18,000 points to 35,000 points in all kinds of troubles, including the terrorist attacks, why the market is now showing a bizarre behavior that is causing billions of rupees losses to investors every day.

Why the government is silent on the steady erosion in the stock market? These are the questions that are arising in the minds of the market analysts and investors.


Pakistan must trim circular debt, pace up privatisation, broaden tax-net, says IMF Director

Harry Javed/ISLAMABAD:

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Mr. Masood Ahmed, Director of the Middle East and Central Asia Department of the International Monetary Fund (IMF), has pointed out that the Pakistan government must reduce arrears of energy sector, pace up privatisation process, broaden the tax-base and carry out restructuring of the public sector enterprises.

IMF Director stated this at the conclusion of his visit to Pakistan from March 6-9, 2015, during which he visited Islamabad and Lahore and held meetings with Mian Muhammad Nawaz Sharif, Prime Minister of Pakistan, Senator Muhammad Ishaq Dar, Finance Minister, Mr. Ashraf Wathra, Governor of the State Bank of Pakistan, Mian Shehbaz Sharif, Chief Minister of Punjab, members of Pakistan’s economic team, as well as members of parliament, academics, and the business community.

At the conclusion of his visit, Mr. Ahmed made the following statement:

“It has been a great pleasure to visit Pakistan and hold productive and engaging discussions with the prime minister, the country’s economic team, members of parliament, political and provincial leaders, representatives of the business community, as well as economic thinkers and academics.

“Pakistan’s economy is improving, helped by prudent monetary and fiscal policies, strong capital inflows, robust remittances, and lower international oil prices. The authorities have made progress with consolidating macroeconomic stability, strengthening public finances, and re-building foreign exchange buffers. As a result, immediate crisis risks have greatly receded, economic growth is gaining strength, inflation is declining, and macroeconomic vulnerabilities are gradually addressed.

“The current improved economic and financial situation presents a unique opportunity for Pakistan to reinforce and build on recent stability gains to work towards achieving higher, sustainable and inclusive economic growth. This will require further bolstering government revenues through broadening the tax base and improving compliance in order to generate the resources that will allow for further reducing public debt while increasing spending in priority areas such as public investment, health and education. It will also require a further build-up of international reserves, which will strengthen Pakistan’s financial resilience while supporting exports. Other key priorities include stemming the accumulation of arrears and addressing long-standing imbalances in the energy sector, restructuring and privatizing public sector enterprises; moving ahead with investment climate and trade policy reforms; and continuing with financial sector reforms to improve resilience and financial inclusion. In this context, it will be critical to protect the most vulnerable from the direct and indirect impacts of economic reforms through continued expansion of targeted social assistance.

“The IMF remains fully committed to supporting the authorities’ efforts through financing, policy advice and technical assistance, including through the ongoing Extended Fund Facility (EFF) arrangement. Firm implementation of the authorities’ reform agenda will be crucial to overcome the economic imbalances, build investor confidence, and move the country on a higher growth path, and we are looking forward to a successful conclusion of the EFF arrangement.