Friday, 4 October 2013

Todays News And Its Impact On Market

31 Enterprises Up For Sale
The  government  directed the Privatization Commission on  Thursday to immediately  start  the  process  for  sale  of  31  Public  Sector  Entities  (PSEs) through  initial  and  secondary  public  offering  and  transfer  of  26  per  cent shares, along with management control, to the private sector. The decision was taken at a meeting of the Cabinet Committee on Privatization, presided over by Finance Minister Ishaq Dar, to comply with a structural benchmark agreed to under the IMF programmed. The companies cleared for divestment include the Oil  and Gas Development Company Limited, Pakistan Petroleum Limited, Mari Gas, Pak-Arab Refinery, Pakistan State Oil, Sui Southern  Gas  Company  Limited, Sui  Northern  Gas  Pipelines  Limited, Pakistan  International  Airlines, PIA-Roosevelt  Hotel,  New York, Pakistan  Railways, Gujranwala Electric Power Company, Lahore Electric Supply Company, Islamabad Electric Supply Company, Faisalabad Electric Supply Company, Northern Electric  Generation  Company,  Pakistan  Steel  Mills,  National  Power  Construction  Company  and  Pakistan  National  Shipping  Corporation. The  financial sector entities selected for sale in the first phase include National Bank of  Pakistan, First  Women  Bank,  Small  and  Medium  Enterprises  Bank,  National Investment Trust Limited, National Insurance Company Limited, Pakistan  Reinsurance  Company  Limited,  State  Life  Insurance  Corporation  and House  Building  Finance  Corporation.  The  Civil  Aviation  Authority,  Karachi Port  Trust,  Port  Qasim  Authority  and  National  Highway  Authority  are  also on the list.

3G, 4G, LTE Up For Grabs
The government has finalized the policy guidelines for auction of the “next generation technology spectrum”, signifying its departure from 3G range while offering a technology neutral band to investors. Headed by Finance Minister Ishaq Dar, an Advisory Committee on Auction of telecom spectrum discussed at length the recommendations submitted by the Ministry of Information Technology regarding policy directives to introduce next generation Mobile Services In Pakistan.  It  was  the  first  meeting  of  the  advisory committee  for the  auction  of  next  generation  telecom  spectrums, marking the beginning of a process that had remained controversial in the past. The previous Pakistan Peoples Party (PPP) government too had approved a policy directive,  and  even  issued  an  information  memorandum  and  auction calendar,  but  the  process  became  controversial.  The Pakistan  Muslim League – Nawaz (PML-N) government had included Rs120 billion as non-tax revenue  income  on  the  account  of  auction  of  3G  licenses  in  the  Federal Budget 2013-14 and wants to complete the process before the close of the current financial year on June 30, 2014. In a significant policy shift, the new government  decided  to  keep  the  spectrum  technology  neutral  and  has named  it  “next  generation  technology  spectrum”,  which  offers  a  range  of opportunities to the investors who could provide 3G, 4G or Linear Technology.

NEPRA Cuts Power Tariff For KESC
The National Electric Power Regulatory Authority (NEPRA) on Thursday reduced the electricity rates of Karachi Electric Supply Company (KESC) by 97 paisa and Rs1.63 per unit for October and November, respectively. According to a notification issued by the power regulator, the reduction  in  tariff was  necessitated by  lower oil  prices in  the  international market  in  the  month of  April, May  and  June  this year  and  improvement  in  Karachi  Electric  Supply  Company’s  energy  mix.  It said the decision for tariff reduction under monthly fuel price adjustment was taken after a public hearing in Karachi on Aug 15. Under the notification, the NEPRA approved a reduction of 27 paisa and 72 paisa per unit reduction for the month April and May. As a result, the consumer tariff would be lower by 97 paisa per unit against reference fuel price during the billing month of October 2013.

Users Of 200 Units To Get Rs 167 Billion Subsidy
Finance  Minister  Ishaq  Dar  has  informed  the  Prime  Minister  that  Rs  167  billion  subsidy  would  be  provided  to  protect  the domestic users using up to 200 units of electricity in the current fiscal year. The Finance Minister called on Prime Minister Nawaz Sharif on Thursday and briefed him about the cost of subsidy on the budget and recent increase in electricity tariff by the  government  that  evoked  criticism  and  landed  the  matter  in  the  Supreme  Court. He  informed  the  Prime  Minister  that  almost  70  percent  electricity  is  produced  from  furnace oil,  which  is  very  expensive  and  only  30  percent  is  produced  from hydel. The Prime Minister stressed that low income groups must be protected at all costs. The government has earmarked a subsidy of Rs 165 billion for Pakistan Electric Power Company (PEPCO) on account of Inter-Disco Tariff Differential and Rs 55 billion for Karachi Electric Supply Company (KESC) for the current fiscal year.

First Gas Delivery Pipeline At Latif Field Inaugurated
In a major development on energy front, Pakistan made headway in integrated gas supply chain, as Prime Minister Nawaz Sharif inaugurated the first 47 kms gas delivery pipeline connecting four wells of Latif Field Development with Sawan Processing Plant. This iconic project led by OMV will result in 100 mmcfd targeted supply of gas to SSGCL and SNGPL. The inaugural ceremony of the project was simultaneously held at Sawan Central Processing Plant, Sindh and the Prime Minister House in Islamabad. The US $150 million project is contributing a precious three percent into the national gas grid to help meet the country's growing domestic  and industrial  requirement. the project has been completed  in record time of 15 months only due  to  tireless  efforts  of  the  entire  project  team.  He  appreciated  OMV  for  immense  contribution  to  Pakistan's  Economy since  commencement  of  its  operations  in  1990,  with  its  major  hydrocarbon  discoveries  like  Sawan,  Miano  and  Latif  Gas Fields,  which are currently  producing  over 360  million cubic  feet of  gas  per  day.  The Prime Minister said supply of indigenous gas was a major component of total energy mix and mainstay of economy.

Forex Reserves Fall By $287.3 Million

The country's liquid foreign exchange reserves posted a decline of $287.3 million during last week because of debt payment. The State Bank of Pakistan Thursday reported that the country's total forex reserves fell to $9.923 billion as on September 27, 2013.  Previously it stood at $10.21 billion a week earlier. Reserves held by SBP posted a declining trend, while banks' reserves witnessed some surge during the period under review. Reserves held by SBP dropped by $326.3 million to $4.602 billion down from $4.928 billion. Similarly, reserves held by banks mounted by $39 million to $5.321billion as September 27, 2013 as compared to $5.282 billion as on September 20, 2013.

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