BUSINESS NEWS _21-11-2011_

8/3/2019 BUSINESS NEWS _21-11-2011_

1/17

MCB Bank Ltd.

Financial Control Group

(21-11-2011)

Futures open interest down 8.8 percent:

Total open interest position at the futures counter declined by Rs 117 million, or 8.8 percent, to Rs 1.21billion, during the week ended on-November 19, 2011.

The futures spread also went down by 145bps on week-on-week basis to 6.8 percent.

Trading at the futures counter remained low and the average daily volume declined by 58 percent to 3.1million shares.

The top 5 scrips at the futures counter holding 66 percent of total open interest were Engro, POL, FFBL,NBP and PSO.

Income tax returns filing: FBR to use 'Mahassal' system:

ISLAMABAD: The Federal Board of Revenue (FBR) would use "Mahassal", an advance version of TaxManagement System (TMS), as an enforcement tool during current fiscal year 2011-12 to ensure filing ofincome tax returns and statements by thousands of registered persons, who are paying no tax, less tax, ordeclaring loss or 'nil income', to evade the authorities.

Sources told Business Recorder here on Sunday that the "Mahassal", latest version of the TMS, covers allincome tax related functions including returns analysis, assessment and verification processes. During 2011-12, the FBR has decided to effectively utilise database of the "Mahassal" to enforce filing of returns during2011-12. In this connection, the data of manually received returns for tax year 2010 and tax year 2011would be entered into the "Mahassal" system by December 31, 2011. The "Mahassal" was internally

developed by the tax department during last many years with the help of most experienced income taxofficials.

Sources said that the "Mahassal" system has already started generating computerised notices to the non-filers of income tax returns under section 114 of the Income Tax Ordinance 2001. Through "Mahassal",auto-generated notices could be issued to the taxpayers in a systematic manner. It is expected that the FBR'senforcement authorities would be able to improve direct taxes collection during 2011-12 with the help ofthis indigenously developed system.

Following are the FBR's instructions issued to the Large Taxpayer Units (LTUs) and Regional Tax Offices(RTOs) to use "Mahassal" as an enforcement tool during 2011-12 through this procedure:

The field formations shall enforce compliance from non-filers/stop-filers, short-filers for the tax year-2010and the previous tax years by the enforcement procedures given hereunder for achievement of laid downbenchmarks on monthly basis and complete the task without further delay. In case of Income Tax, all RTOsand LTUs shall ensure that data of manually received returns for tax year 2010 is entered into the"Mahassal" system by December 31, 2011, and shall also furnish certificate to Member, Enforcement andAccounting, through the Member, Inland Revenue.

8/3/2019 BUSINESS NEWS _21-11-2011_

2/17

MCB Bank Ltd.


(21-11-2011)

All RTOs and LTUs shall ensure that notices for filing of returns are issued to all defaulters who have notfiled their returns for the tax year 2010 and previous tax years. Cut-off date(s) for issuance of notices undersection 114(4) or 115(5) of the Income Tax Ordinance 2001 as the case may be, would be November 30,2011 for all LTUs and December 31, 2011 for all RTOs.

In case of tax year 2011, the FBR's instructions said that the all RTOs and LTUs shall ensure that data ofmanually received returns for tax year 2011 is entered into the 'Mahassal' system by 31.1.2012, and shallalso furnish certificate to this effect to Member, Enforcement and Accounting, through the Member, InlandRevenue. The cut-off dates for issuance of notices under section 114(4) or 115(5) as the case may be, wouldbe March 31, 2012 for all LTUs and April 30, 2012 for all RTOs. All RTOs and LTUs shall ensure thatreturn enforcement notices are issued only to non-filers/short-filers. The Pakistan Revenue AutomationLimited (PRAL) shall generate lists of non-filers/short-filers for the tax year 2011 according to the giventimelines. The LTUs/RTOs shall achieve the laid down benchmarks on monthly basis and complete the task

for tax year 2011 up to June 30, 2012 by undertaking the following enforcement procedure.

For the registration of un-registered persons, the RTOs and LTUs (if warranted) to enlist new revenuepotential cases on the basis of third-party information, like electricity, gas, telephone bills, imports, propertyand motor vehicle purchases, club memberships, etc and withholding tax statements, on the basis ofguidelines given as per para-3 (where relevant) of the plan, complete the requirements for NTN registrationand send those cases to PRAL at the earliest (if not sent as yet). The PRAL would have to completeNational Tax Number (NTN) registration and e-enrolling process in newly listed cases at the earliest (if notsent as yet), the FBR added.

High fives for the 'big five': Largest five banks tally impressive growth in 3QCY2011:

Habib Bank (HBL), National Bank of Pakistan (NBP), United Bank (UBL), Allied Bank (ABL) and MCBBank (MCB) are collectively referred as the 'big five' of the local banking industry.

And for good reason: on a cumulative basis the five banks hold about 56 percent of the total bankingdeposits in the country, as of September 30, 2011.

Given their relative dominance in the local banking industry, the financial performance of these giants isoften considered as a benchmark for the rest of the industry as well as for the state of financial inclusion inthe country.

Profitability This group of the five largest banks (in terms of deposits) of the country registered heftygrowth in their profitability in the first nine months of this calendar year compared with the same period of

2010.

These banks have benefited from their growing exposure in government securities in the presence of a hugepool of low-cost deposits coupled with relatively high KIBOR levels.

Six-month KIBOR; the benchmark interest-rate index, averaged 13.66 percent in 9MCY11, around 116 bpshigher than the corresponding period of last year.

8/3/2019 BUSINESS NEWS _21-11-2011_

3/17

MCB Bank Ltd.


(21-11-2011)

Among these local giants UBL led the pack with an increase of 36 percent in net profit during the periodunder review against 9MCY10.

At the other end of the spectrum, NBP's bottom line stayed flat.

Markup revenues The collective top-line climbed by 15 percent, year on year, to Rs 279 billion in9MCY11.

On growth front, MCB was on a cut above average recording a year-on-year surge of 23 percent in markuprevenues during the period under review.

The improved revenue was derived mainly from expansion in earning assets since the combined investmentpool reached Rs 1,404 billion at the end of September 2011 marking a jump of 27 percent during the firstnine months of the current year.

ABL is the most aggressive in the accumulation of investments.

Its investments portfolio rose by a whopping 71 percent during the first nine months of CY11 to Rs 207billion at the end of September, 2011.

This prompted around 21 percentage points' jump in its Investment to Deposit Ratio (IDR) which stood at54 percent at the end of September 2011.

At the end of that month (September 2011) MCB had had the highest IDR, at 64 percent while NBP broughtup the rear among the group of 'big five' with an IDR of 32 percent.

At the same time, these banks continued to shy away from lending with their total advances portfolio fallingby 2 percent to Rs 1,720 billion.

Hence, the group's Advances to Deposits Ratio (ADR) stood at 57 percent as on September 30, 2011.

However, at this level, the group's ADR is around 2 percentage point higher than the industry's (allcommercial banks) average.

NBP appears to be an outlier in this regard as it increased its exposure to advances at the cost of itsinvestments portfolio during the period under review.

Markup expenses Deposit expansion resulted in higher markup expenses as the combined deposit base

jumped by 4 percent during the first nine months of CY11 to Rs 3,025 billion as of September 30, 2011.

MCB is leading the field with 12 percent expansion in its deposits base.

On the other hand, NBP went against the tide, as its deposits base fell by 4 percent during the period underreview.

8/3/2019 BUSINESS NEWS _21-11-2011_

4/17

MCB Bank Ltd.


(21-11-2011)

The group's average CASA eased down to 68.5 percent at the end of September 2011 from 69.4 percent atthe end of December 2010.

MCB is in good repair, since it enjoys the highest CASA ratio at 79 percent.

Net markup income Higher earnings lifted the combined net interest income by 15 percent, year on year, toRs 154 billion in 9MCY11.

These savvy bankers managed to keep their margins intact as the group's average gross spread ratio stayedunchanged at 55 percent in 9MCY11 compared to the same period a year earlier.

The banking industry's spread averaged out at 7.64 percent during 9MCY11 as opposed to 7.43 percentduring the first nine months of 2010.

Non markup income and expenses The group of 'five big' deserves a collective pat on the back forrecording an impressive jump in investment banking revenues.

MCB's non-core banking revenues rose by 32 percent, year on year, followed by UBL and ABL at around23 percent each.

On the other hand, inflationary pressures coupled with investment in technology upgradation and expansionin infrastructure has lifted non markup expenses.

However, the average income to expense ratio remained intact at 2.4 during 9MCY11 compared to the sameperiod of last year.

MCB's income to expense ratio stood at 3.22 in 9MCY11, the highest level among the group of the fivebiggest banks.

Non-performing loans Surprisingly, in the face of stagnating advances the banks continued to faceexpansion in non-performing loans.

Collective toxic loans reached Rs 271 billion at the end of September 2011 marking a jump of 20 percentduring the first nine months of the current calendar year.

However, this tally may be misleading as NBP alone saw its toxic loans shoot up by 36 percent during thefirst nine months of 2011 compared to the same period of last year to Rs 118 billion.

The remaining four big banks each witnessed relatively lower growth in toxic loans ranging between 8 and12 percent over the same period.

As a result, NBP's infection ratio jumped to 20.4 percent at the end of the third quarter as opposed to 16percent at the end of CY10.

8/3/2019 BUSINESS NEWS _21-11-2011_

5/17

MCB Bank Ltd.


(21-11-2011)

In terms of asset quality, ABL is going great guns enjoying the lowest infection ratio at 8.2 percent amongthe group of the five largest banks. In light of growth in toxic loans, the group's average coverage ratio

eased down by around 5.8 percentage points during the first nine-months to 69.5 percent at the end of thethird quarter.

This abrupt fall is due to a significant drop in NBP's coverage ratio which fell to 56.2 percent at the end ofSeptember 2011 from 70.5 percent at the end of December 2010.

Outlook The government's thirst for funds is not likely to be quenched any time soon, given the plethora ofpopulist measures being undertaken in the run-up to the next general elections.

With government's ability to borrow from the central bank limited by legislation, it is likely that the biggestcommercial banks will remain the leading lenders for GoP.

Hence, these banks will probably continue to capitalise on the risk-free investments window.

The 'big five' will continue to pile their eggs in the governments basket until the overall economicconditions improve, prompting exposure towards the private sector.

However, in order to cater market through cost effective channels, these banks are vying for expansion inalternative banking channels.

All information and data used are from reliable source(s) and subjected to extensive research after diligentand reasonable efforts to determine the soundness of the source(s).

This analysis is not for the benefit of or discredit to any person, scrip or tradable instrument.

The content(s) of this analysis shall not be construed as an advice or recommendation to trade.

No relationship of client will be created between Business Recorder and user of this information.

Professional advice must be taken by the reader before making investment/trading decisions.

BR disclaims any liability for investment(s) made or liability accrued on basis of this analysis. Thecontent(s) including all opinion(s), statement(s) and information are subject to change without prior noticeand/or intimation.

Human and financial capital key to economic growth for Pakistan: Deputy Country Director UNDP:

"Market-driven employment generation in Pakistan faces two main hurdles" highlighted Deputy CountryDirector UNDP, Jean-Luc Stalon.

In an exclusive interview with BR Research, he elaborated: first, there is a dearth of key skills andcompetencies among many of the poorer segments of the population, especially the youth, and secondly,they do not have access to financial capital which is vital for the expansion of business.

8/3/2019 BUSINESS NEWS _21-11-2011_

6/17

MCB Bank Ltd.


(21-11-2011)

"The issue is that poor don't have the minimum base that can drive them out of poverty.

We need to support the poor to build that minimum base in the form of improved skills and access toresources, so that we may curb social and economic inequalities," said Stalon.

The senior UNDP official believes that a significant change in the "development thinking" has beenobserved in the country over the past three years.

"There is an increasing realisation that growth has remained volatile and unsustainable even during periodsof relative economic and political certainty and efforts are now more focused on how to bring long-termsustainability and stability to economic growth in the country," he said.

Though he conceded that the rate of economic growth in the country has declined in recent times, when

compared to regional peers; Stalon, however, added that the Planning Commission of Pakistan is cognisantof this fact and has taken practical steps to put the country on track of sustained economic growth.

"The New Economic Growth Strategy developed by the Planning Commission of Pakistan and its decisionto transform the UNDP supported 'poverty centre' into an 'inclusive growth centre' is an evidence of theGovernment's priority to spur growth in the country.

"What I see in the proposed growth strategy is that there is that element of Government's commitment topromote inclusive growth.

It is heartening to see efforts to promote entrepreneurship, especially focusing on youth and to account forurban as well as rural populations that are stricken by poverty," said Jean-Luc Stalon.

UNDP was instrumental in the development of the new growth strategy which was subsequently adopted bythe Executive Committee of the National Economic Council (ECNEC) and will continue providing supportto the Government in the rollout of this important strategy, Stalon underlined.

"In Pakistan, small and medium enterprises play an important role in poverty alleviation in both rural andurban settings," he said, adding that "the focus of the growth strategy to create an enabling environment forprivate enterprises, especially small businesses, is very relevant." Stalon highlighted the importance ofgrowth in small enterprises for creating job opportunities.

UNDP's mandate and achievements

"Pakistan is very high on the agenda for UNDP given the fact that it is one of the largest countries of theworld in terms of population and that the level of poverty is significantly high, addressing which is one ofthe primary mandates of UNDP," said Stalon, adding: "This is the reason why the number of UNDPofficials in Pakistan is among the highest in the world."

8/3/2019 BUSINESS NEWS _21-11-2011_

7/17

MCB Bank Ltd.


(21-11-2011)

Explaining the mandate of the United Nations Development Programme in Pakistan, Jean-Luc Stalon said"UNDP co-ordinates broader efforts at the country levels with regard to the achievement and monitoring of

Millennium Development Goals (MDGs)". He added "UNDP provides capacity development support at alllevels-policy, institutional and grass-roots, to reduce poverty, promote good governance, address energy,climate change and environmental issues." He also said that crisis prevention and recovery also fall withinthe ambit of UNDP's mandate.

This includes, for example, UNDP projects necessitated by natural calamities such as flooding as well asman-made disasters such as bombings.

"We do not just implement projects; but also advise the government in terms of desirable policy reforms,"he summed up.

NUMBERS NECESSARY

The official poverty figure is only available until 2005-06 which was 22.3 percent.

Thereafter poverty figure has not been officially released by the Government.

While head count poverty in Pakistan declined during 2000-01 to 2005-06, anecdotal evidence and findingsby some non-public institutions suggest that poverty in Pakistan increased during the last 2-3 years mainlydue to high commodity prices and slow economic growth.

"To more closely analyse the poverty situation in the country, there is an urgent need for fresh data; like theHousehold Income and Expenditure data, to have an update on the status of poverty in the country," hecontended. "Numbers on household incomes and expenditures can reveal a lot more about the state of

poverty in the country," said Stalon.

However, he warned that simply collecting data on poverty can be distracting since the real task at hand isthe generation of inclusive economic growth that can help in poverty reduction. "A double-track approach topoverty alleviation is crucial because, on one hand, you need policy reforms while, on the other, you needsocial safety nets to support vulnerable sections of the society.

Benazir Income Support Programme and similar initiatives by some of the provincial governments arecommendable," Stalon noted. He added that "the country's government needs more efforts along similarlines to bridge immediate needs of vulnerable groups while it works on medium-term poverty alleviationmeasures".

STEPPING UP SUPPORT

UNDP has stepped up its financial support to the country and its operations here dramatically in recentyears.

Stalon highlighted that as various agencies of the UN stepped in to help in the wake of floods in the country,"UNDP's support has climbed from $35 million to more than $100 million".

8/3/2019 BUSINESS NEWS _21-11-2011_

8/17

MCB Bank Ltd.


(21-11-2011)

Now that relief and rescue efforts have largely been concluded, the official says: "UNDP is now

increasingly focused on reconstruction and rehabilitation activities including support for agriculture andmicro credit for other productive activities; rebuilding of canals, small roads and other vital structures aswell as assisting in the resurrection of local administration in affected areas".

PROVINCES AND MDGs

UNDP is also working to influence socio-legal environment in the country.

Listing the initiatives undertaken by UNDP to bolster the country's socio-legal environment, Stalonconceded that "Pakistan is lagging behind in the attainment of all Millennium Development Goals (MDGs)except addressing gender inequality." He added that all provinces are currently in the process of conductingtheir own assessments to provide a clearer picture in terms of efforts to attain MDGs and their effectiveness

so far.

However, he lamented that the country would, in every likelihood, miss "all seven MDGs" if the currentpace of progress continues.

"In the wake of the 18th Amendment, it has become crucial to co-ordinate with each of the provinces inpursuit of the MDGs," said Stalon.

He noted that there exists "substantive gaps between the provinces" in terms of poverty, infant mortality,access to education and other key indicators".

Similarly, the rule of law programme initiated by UNDP seeks to "make justice accessible and to teach

people about their rights as well as other aspects of law.

Regarding flood operations, he highlighted that "there are about 750,000 IDPs, who were displaced fromFATA and a needs-assessment study is currently being conducted to identify the priorities for their support".

Stalon also said that UNDP is assisting in the strengthening of the Election Commission as an independentand transparent institution.

"We believe that the Election Commission needs to be ready for the elections scheduled in 2013, so we arehelping to reform the institution and train its staff in various relevant aspects," revealed Stalon.

Stalon said that "the immense development challenge in Pakistan, notwithstanding, this country has a hugepotential to be one of the regional leaders on economic growth and human prosperity."

"I am very much touched by the hospitality and co-operation of the people during my so far stay in Pakistan.

With some of the recent constitutional and policy changes in the country, I am confident that Pakistan willsoon be back on the path of development," Jean-Luc Stalon concluded.

8/3/2019 BUSINESS NEWS _21-11-2011_

9/17

MCB Bank Ltd.


(21-11-2011)

Jean-Luc has 17 years of working experience with the United Nations and has served in Africa, the Pacificregion and South Asia.

He is specialised in post conflict/crisis programming and has published several policy articles onpolitical/economic issues.

He has also published a book on Rwanda on constructing democracy in divided societies.

8/3/2019 BUSINESS NEWS _21-11-2011_

10/17

MCB Bank Ltd.


(21-11-2011)

Oil down in Asia amid European jitters:

SINGAPORE: Crude was lower in Asian trade on Monday with traders withdrawing from the market asconcerns linger about the depth of the European debt crisis, analysts said.

New York's main contract, light sweet crude for delivery in January, fell 32 cents to $97.35 a barrel.

Brent North Sea crude for January delivery shed 28 cents to $107.28.

"Oil is continuing the trend from last Friday in the US, it's heading down," said Victor Shum, seniorprincipal of Purvin and Gertz energy consultants in Singapore, adding that "there are concerns about theEuropean economies."

Spain's conservative Popular Party swept to victory in Sunday's general election and now has the task ofpushing through severe austerity measures in the eurozone's fourth biggest economy.

The Socialists are the latest in a series of scalps claimed by the region's debt crisis, which shows no signs ofabating.

Governments in Portugal, Italy, Ireland, Greece and now Spain have been deposed by economic turmoil.

Asian markets lower on Europe fears:

HONG KONG: Asian shares fell in early trade Monday as markets awaited details of plans to fix Europe'sdebt crisis and the outcome of key Sino-US trade talks, with tensions between the economic superpowers.

Tokyo edged down 0.09 percent, Sydney lost 0.73 percent, Seoul was down 1.13 percent while Hong Kongwas off almost 2.0 percent. Chinese shares fell into negative territory, trading 0.20 percent lower.

Markets also reacted to news Japan logged an unexpected trade deficit in October, while business hubSingapore predicted sharply lower economic growth next year -- and warned a weaker global economycould worsen the situation.

"It's a brand new week but the same old concerns hover over financial markets," said Tim Waterer, seniorforeign exchange dealer at CMC Markets in Sydney.

"Debt debacles on both sides of the Atlantic continue to halt any potential uprising of brighter sentiment

from traders."

The European Commission will publish legislative proposals for common eurozone bonds on Wednesday inthe latest bid to contain the debt crisis, which has threatened to plunge the world economy into recession.

New rules would see troubled eurozone states effectively club together to guarantee each other's debts andpolice national budgets to keep the region's fiscal woes in check.

8/3/2019 BUSINESS NEWS _21-11-2011_

11/17

MCB Bank Ltd.


(21-11-2011)

The proposals have been designed to combat nearly two years of regional turmoil after bailouts for Greece,Ireland and Portugal, and with even France now facing mounting pressure going into a presidential election

year.

Governments have been deposed by economic turmoil in several nations, with Spain's conservative PopularParty sweeping to victory Sunday in a general election with rising concerns about the country's ability tofinance its debts.

8/3/2019 BUSINESS NEWS _21-11-2011_

12/17

MCB Bank Ltd.


(21-11-2011)

Functional websites mandatory for firms:

ISLAMABAD, Nov 19: The Securities and Exchange Commission of Pakistan has decided to makemandatory for all the listed companies to maintain functional websites to improve flow of information forthe share holders.

The SECP commission is expected to notify the new requirement in the coming week, after which over 73per cent of the listed companies in the country will be required to develop their functional website.Currently, there are 524 listed companies in the country 225 have web presence but only 142 have afunctional portal.

However, it has been proposed that the requirement be enforced from March 2012,so that the companieshave adequate time to make necessary preparations.

An official of the SECP said that the requirement was in line with current global technological development,to give shareholders access to information. It is a cost-effective measure for dissemination of materialinformation. The corporate sector regulator had advised the listed companies in 2003 to maintain theirwebsites and now it is time to enforce it, said a senior official of the commission.

According to the SECP, the companies needed to incorporate in the website vision, mission and scope anddetails of business activities, annual reports for the current financial year and the previous two years, interimaccounts. The companies will have to post their earning per share, P/E ratio as per latest available yearlyfinancial statements, board of directors and shareholding pattern, name of share registrar, detail ofassociated companies and their website linkif available.

The websites of the companies needed to have detailed site map, addresses of registered office, head office,contact details, online forms for assisting and handling investor grievances including reference to SECPcomplaint address. The companies would also be required to post their recognitions at the website, includingnational and international awards and membership of industry associations and trade bodies and relevantweblinks. The official websites of the listed companies should also have media portals containing publishednews items and clarifications regarding the company.

The SECP directive to be notified in the next commission meeting has demanded the listed companies todisplay the date when the website was updated.

An official of the SECP said: It is mutually beneficial way for the companies and shareholders becausewebsites are the most cost-effective platform to provide relevant information to shareholders and the

investors.

The proposal to maintain a functional website for all listed companies has been forwarded by the companylaw division of the SECP.

It has also been highlighted that relevant practice is observed in India, UK, USA, Australia and even Kenya.

8/3/2019 BUSINESS NEWS _21-11-2011_

13/17

MCB Bank Ltd.


(21-11-2011)

Businesses relocating, expanding overseas:

KARACHI, Nov 19: A number of Pakistani businesses have marked their presence in the industriallandscape of Malaysia, Bangladesh, Sri Lanka and some of African countries. Their leaders, however, seemto be reluctant to admit to the persisting trend of relocation and expansion overseas.

The office-bearers of various industrial bodies contacted to solicit comments gave mixed views. It washowever confirmed in conversation that local businessmen were keenly exploring options beyond borderswhile many had already entered these countries.

The industrialists were, however, more alarmed over the rising trend of closure of units in Karachi over thelast few years.

They maintained that street crimes persisted in Karachi despite patrolling of Rangers.

Industrial bodies of the four main estates of Karachi were not willing to disclose the names their members ornon-members who have expanded their business abroad after closing down their units or for any otherreasons.

Site Association of Industry Chairman Mohammad Irfan Moton cited law and order being the major reasonfor relocating of business abroad. He said many big industrialists have set up textile units in Sri Lanka,Bangladesh and Malaysia and many are actively considering moving abroad while a number of businessmenhave opened their offices in these countries.

If an industrialist is not expanding or reducing his business in this city then he is definitely moving out ofthe country, he said.

He said business activities were already shrinking and industrialists were not taking risk for businessexpansion.

However, businessmen with options are moving abroad.

He said businessmen who had purchased industrial units in the Site area were reluctant to invest in anycommercial projects.

However, they had opened offices in their industrial units while over 100 units had been converted intowarehouses.

No new unit has come up in the last three years in the Site area, Irfan Moton said, adding that out of 4,000units around 1,600-1,800 units have closed down in the last five to six years and only 2,200-2,400 units areoperational.

When asked about the improvement in law and order after deployment of Rangers in the industrial area, hesaid the extortion cases had come to a halt followed by only 30 per cent decline in cases of snatching at gun-point and robbery, while cases of kidnapping has declined by 70 per cent.

8/3/2019 BUSINESS NEWS _21-11-2011_

14/17

MCB Bank Ltd.


(21-11-2011)

Chairman Korangi Association of Trade and Industry (KATI), Ehteshamuddin said after testing Bangladesh,

Malaysia, etc., industrialists and exporters were now more focused on Sri Lanka, which is considered as ahot destination.

Besides offering security and incentives to the foreign investment, one can export its item to India also fromSri Lanka, he said adding that from Bangladesh and Malaysia exporters have a huge market access option.He said big Pakistani exporters cannot afford to lose their regular buyers due to power and gas shortageswhile in these countries at least they do not have such kind of problems.

Ehteshamuddin said many industrialists and exporters, who have not winded up their units in Karachicompletely, were paying more attention to their businesses in Sri Lanka, Bangladesh and Malaysia.

Industrialists and exporters are going from Korangi industrial area but I cannot confirm their names right

now, he said, adding that many entrepreneurs have also taken local labour abroad especially in textilerelated businesses.

On law and order situation, he claimed substantial decline in cases of street crimes, robbery and extortion ofmoney. On closure of industries, KATI chief said that many industries had shut down and a number ofindustrialists turned their units into godowns or rented out them to other parties.

Chairman North Karachi Association of Trade and Industry (NKATI), Abdul Rasheed Fodderwala saidmany industrialists had started their business activities in Bangladesh and Malaysia he however declined todisclose the names of such industrialists belonging to NKATI. He added that no new industries were addedin the area.

He said businessmen were relocating to other countries due to zero-duty access to America and EuropeanUnion from Bangladesh while Malaysian government is offering 10-year visa. He said many have moved tothese destinations by closing down their units here while many had expanded their business.

Fodderwala said some 16 textile related and dyeing units (member of NKATI) have packed up theirbusiness in North Karachi area in the last two years due to financial problems, recession in world markets,fluctuations in yarn prices and law and order situation.

He said now industrialists were facing problems due to prolonged power outages and sharp increase in watertariff.

The NKATI chief said despite Rangers presence and its patrolling cases of street crimes like snatching at

gun point had increased while there were no cases of extortion.

Chairman F.B. Area Association of Trade and Industry (FBATI), Masroor Ahmed Alvi reckoned thatbusinessmen were moving to Bangladesh, Sri Lanka and African countries by further expanding theirbusiness but said he has no report about any flight of capital or business expansion by any industrialistsfrom the F.B. Area.

8/3/2019 BUSINESS NEWS _21-11-2011_

15/17

MCB Bank Ltd.


(21-11-2011)

He said no new units had been set up in the area and in the last two to three years some 30-35 units relatingto textile and garments had closed down. The existing units, he claimed, are operating at 40-50 per cent

capacity.

On Rangers presence, he said street crimes still exist but other criminal activities like extortion hasdisappeared.

Meanwhile, market is abuzz with reports that an estimated Rs27 billion have found way into Malaysia in thelast six months.

Occupy Wall Street irrelevant to Pakistan:

KARACHI, Nov 19: The Occupy Wall Street protest, which was thought to have been inspired by theArab spring, now enters its third month.

Leaderless and yet to come up with clear demands, the movement appears to be losing steam. But startingout in the heart of Americas financial centrethe stock exchange on Wall Street, the movement signified apublic outcry against the corporate greed and corruption.

The movement was mobilised on the attractive slogan of fair share for 99 per cent disposed, against one percent of the elite class that command all the wealth and power. Detractors than dismissed the jabs saying thatall who work hard had the opportunity to prosperity.

For a variety of reasons, the Occupy Wall Street is not relevant to our country. Only a few of theenlightened stock brokers at the Karachi Stock Exchange are aware of such a movement taking place overthe worlds oldest stock exchange and slowly spreading to other countries. But while Wall Street is a

symbol of wealth and big finance, the same could scarcely be said of the KSE.

Unlike the Wall Street in US and the Dalal Street in Mumbai, the forefathers who built the KSE haveavoided the word street that leads to the KSE, said one broker jokingly.

The street at the end of I I Chundrigar Road, opposite the famous Merewether Tower is The stockexchange road.

The wealth in US is clearly seen to be born out of the movement in stock prices on the bourses, which iswhy Bill Gates remains the richest man in the world as the price of share in Microsoft flies higher. Theinvestment Guru and the second richest man in the world, Warren Buffet also sees his fortunes multiply onthe sharp spike in price of the corporate he chairs: Berkshire Hathaways. Even the richest Indian, Mukaish

Ambani is able to build his $1 billion worth house, drawing his wealth from the exceptional growth in thevalue of his stake in his public listed company, the Reliance Industries.

The Forbes magazine list of billionaires is generally the wealth of individuals measured by their stakes incorporate America.

No one in Pakistan can name, with absolute confidence, the richest tycoon.

8/3/2019 BUSINESS NEWS _21-11-2011_

16/17

MCB Bank Ltd.


(21-11-2011)

One man in the business from insurance to textiles is thought to hold that top slot, but to figure out his

wealth would be a risky task.

An authentic list of the richest Pakistanis is almost impossible to make.

The enterprising wealthiest countrymen spread out their wealth, careful never to keep all eggs in one basketwhich can be easily counted.

Many listed companies do not sport the names of their real sponsors and chairman; they are substituted byproxiesfriends or family members that sit on the Boards. There are even benamispersons who do notexist in every business. Any man alluding to the right person as the owner of such companies carries the riskof being dragged to the Courts, for want of proof.

Without any foolproof system to measure the accuracy of wealth, even the Parliamentarians submit theirwealth statement that shows them as no more than mere paupers.

But if the government released figures are to be believed the prosperity of the public is at a high pitch.Estimated per capita income for financial year 2012 is shown in SBP statements as $1,410, up from $1,254the previous year.

Actual per capital income for the year 2010 is noted in official documents at $1,073, up from $990 the yearbefore.

Crudely calculated, $1,410 would amount to each person earning an average yearly income of Rs1,21,260or an income of Rs10,105 per month. That must make families dance with joy. But unlike the Wall Street,

the KSE Street is not the symbol of wealth.Most men familiar with the stock business know that billionaireslost most of the money in the crash of 2008 and that included rich and powerful brokers. The corporate fatcats are countable, mainly in big banks and multinational corporations.

Wealth in Pakistan has forever remained concentrated in other hands, mainly the landlords and richagriculturists, who also occupy most seats in the parliaments.

The countrys fields yielded gold in the form of bumper crops in the last two years, so that more of theurban wealth got diverted to the rural economy.

If anyone wants to occupy, they should occupy the lands of big and powerful landowners, said a stockbroker. Their tax-free wealth, he said, has remained hidden from the eyes of the general public, while the

government and the taxation authorities have continued to look the other way.

8/3/2019 BUSINESS NEWS _21-11-2011_

17/17

MCB Bank Ltd.


(21-11-2011)

Documents

BUSINESS NEWS _21-11-2011_