By Ali Ahmad · Thursday, Mar 14, 2013 0 Comments
Indus Motors, one of the auto-giant, saw a bad first half of this fiscal year (July to December) with a dip of PKR 79 Crore in its profits from PKR 177 Crore last year to PKR 98 Crore this year.
Sales revenue for the first half of 2012-13 decreased to PKR 2,400 Crore compared to PKR 3,300 Crore in the corresponding period of previous year, representing a fall of 26 per cent.
The company, in its statement, said the sluggish market demand forced it to shut down the plant for 53 days, but it did not lay off any workers.
“The industry is thankful to the government for its decision to cut the age limit of imported used cars from five to three years. This will ensure survival of the local auto industry. It is in the national interest that a stable policy environment is provided for the industry to play a meaningful role in economic development,” said Parvez Ghias, CEO of Indus Motor in his statement.
Its’ worth mentioning here that now there is a tussle going on between Competition Commission of Pakistan (CCP) and car manufacturers over recent report of CCP which favors import of used cars.
This was the finding of a research programme initiated by the CCP to assess the competition vulnerabilities in various sectors. The Pakistani market only has three major players, each dominating a different segment of the market based on the size of the car, according to the study.
Indus Motor said presence of used imported car models in the Corolla category affected sales of the company and severely restricted its overall market share, which dropped to 25% compared to 30% in the corresponding period last year.
The board of directors declared an interim dividend of Rs6 per share for the half-year compared to Rs8 per share in the same period last year.
By Ali Ahmad · Wednesday, Mar 13, 2013 2 Comments
Arif Habib Corporation, a prominent conglomerate with interest in varying industries, agreed to sold its controlling 61% stake in Thatta Cement, one of the lowest capacity plant in Pakistan. 
According to the notice sent to Karachi Stock Exchange – Arif Habib Corporation decided to sold its stake in Thatta Cement to a consortium of four relatively unknown companies in return of a share price of PKR 24.16 per share taking the total value of transaction to PKR 150 Crore.
Four private companies, which has been unknown, may be still unknown to general public, Sky Pak Holding, Al-Miftah Holdings, Golden Globe Holding and Rising Star Holding each bought 22.7%, 8.5% and 7% of Thatta Cement, respectively.
Thatta Cement, which has been dubbed as the smallest cement unit, has the capacity to produce about 450,000 tons of cement per year. The cement plant is located at Makli, a town in the district of Thatta in Sindh, about 115 kilometres northeast of Karachi.
Thatta Cement which has been posting losses for past two years just turned itself into profits during first half of last year reporting net profit of PKR 2.4 Crore since Pakistan’s cement sector has grown phenomenally last and this year, boosted by strong overseas demand as well as a recovery in domestic demand and prices.
According to another research carried out by AKD – the combined profits of cement companies of the first six months in fiscal 2013 almost equalled the combined profits for the entire preceding year and therefore it make no sense for many investors as why Arif Habib Corporation would dispose its stake in Thatta Cement?
The situation becomes more ironic when we learn that Arif Habib Corporation also owns a controlling 75% stake in Al-Abbas Cement, a Dadu-based company with a production capacity of 0.75 million tons with news that Arif Habib Corporation is working on expanding its capacity to o.9 million tons. The plans to expand its capacity exhibits the group’s expectations to cope up with increased demand – In simple English – to make more profits.
On one hand – Arif Habib Corporation is expanding its capacity in one unit and selling off its stake in other on a discount of 5-7%.
So the main question here is Why would Arif Habib Corporation sold its stake in Thatta Cement especially when the conglomerate has been doing well in all areas? Was there any political pressure behind this deal? The surprising deal causes rumors to spread fast.
A source close to the matter confided to EconomyAge on condition of anonymity that even the senior finance department employees are not aware of these four buyers.
The share price of Thatta Cement moved to Rs. 28 after this deal.
By Ali Ahmad · Tuesday, Mar 12, 2013 1 Comment
“Sole proprietors firms and partnership ventures were taxed at 25% and were exempted from audit, but listed companies paid 35% income tax and were subject to stringent audits by regulators. In developed economies, it is the other way round,” Chairman SECP, Mohammad Ali said. 
Mohammad Ali has emphasized the devoir for encouraging companies to get registered, while contending to rationalise the tax regime, as the existing policies and laws favors Unregistered Businesses that pay substantially less income tax than the corporate class. (Yes, it won’t make sense to me as well).
Chairman SECP also pointed out that Pakistan had hang back far behind in development of corporate sector. Citing the example of the United Kingdom, he argued that with less than half of Pakistan’s population, the UK had two million registered companies with 300,000 new firms being registered every year. Its would be interesting to add here that Pakistan’s corporate sector amounts to approximately 61,000 companies so far!
New Stock Exchange
Ali said the capital market in Pakistan had been demutualised, as former brokers now had a 40% share in the demutualised exchange, while a 60% stake was with the government.
In next one and a half year – all former brokers – or previous owners of the stock exchange – will lose control over the market with the 40% of these shares will be sold to a strategic investor – which will be a reputed global stock exchange – and 20% will be offered to the general public.
He also referred to the improvement in SECP’s rank from number 70 in 150 countries in 2011-12, to 55 in 2012-13 in the World Economic Forum Global Competitiveness Report. “This is a great achievement, as the first 40 capital market regulators are from developed economies,” he added.
By Ali Ahmad · Tuesday, Mar 12, 2013 0 Comments
Malik Riaz, billionaire Property tycoon and founder of Bahria Town and a US investment group signed a memorandum of understanding (MoU) for $15 to 20 billion investment on Monday, making another bid to attract foreign investment in Pakistan, especially in terror-stricken Karachi. 
According to the details unraveled in press conference, Bahria Town would construct the world’s tallest building and a number of other projects some 3.5-kilometres off the Karachi shore, in collaboration with the foreign companies associated with prominent US investor Thomas Kramer.
A spokesman for the Bahria Town said the project called Bodha Island City would be developed within a period of five to 10 years. Just like other projects developed by Bahria Town this project would also comprise, Net City, Education City, Health City, Port City and other infrastructure projects.
According to the details, this Island City would be linked with Karachi through a six-lane bridge, first of its kind in Pakistan.
During the press conference, Malik Riaz said that this project, that would be spread over 12 to 16 acres of land in Karachi, would help in taking the edge off terrorism from the country. This project would engage 2.5 million people in various jobs and settlement to hundreds of thousands of others,” Riaz added with delight.
Its worth mentioning here that a similar claim was made Malik Riaz few weeks earlier that he had signed a multi-million dollar deal with Abu Dhabi Group to construct the tallest building of the world in Karachi and immediately after few days of this announcement – Abu Dhabi Group denied the assertion made by Riaz and published astronomical size advertisements in all leading news papers.
Malik later accused some unknown political forces from Punjab who, according to him, conspires against this deal.
Who is Thomas Kramer?
Thomas Kramer is a German-born real estate developer and a stock investors, and television personality, noteworthy for his part in the redevelopment of famous South Beach in Florida.
Thomas Kramer originally came to prominence as a stock speculator. He correctly predicted a sharp downturn in October 1987 market crash and according to different newspapers’ assertions – he made over $30 million in profits.
In his early days – Kramer was just as controversial in his property dealings as Malik Riaz has been. More on him later.
By Ali Ahmad · Thursday, Mar 7, 2013 0 Comments
‘Smoking Causes Mouth Cancer’ – a typical message by Ministry of health written on every packet of cigarette with a horrible picture on it – could not aid smokers to avoid it resulting in a massive profit of PKR 173 Crore for Pakistan Tobacco Company, one of the Pakistan’s first foreign investment, who began its operations in 1947. 
According to the available financial statements, Pakistan Tobacco almost quadruple its profits to PKR 173 Crore in 2012 from PKR 36 Crore in 2011, showing impressive growth from preceding year.
Government, which usually prohibits smoking through the message of Health ministry, collected revenues of PKR 5,000 Crore in form of Excise Duty and sales tax.
Company’s gross profits soard to reach PKR 845 Crore from PKR 624 Crore while the selling and distribution expenses increased only 12% and administrative expenses by 4.5%. Its other operating expenses declined by 23% and other operating income increased by 67%.
This effectively meant that almost all the increase in the company’s top-line went directly towards its net profits, as it also cut its net finance costs in the same period by 28%.
These results help Pakistan Tobacco in reporting an earnings per share of Rs6.77 per share, and board of directors has announced a final dividend of Rs3.25 per share in addition to two interim dividends (already paid) at Rs3.05 per share.
Its’ worth mentioning here that Pakistan Tobacco owns famous brands including Dunhill, Benson & Hedges, John Player Gold Leaf (the largest urban consumer goods brand in Pakistan), Capstan by Pall Mall, Gold Flake and Embassy.
By Ali Ahmad · Tuesday, Mar 5, 2013 0 Comments
The majority of Chief Financial Officers (CFOs) looking to appoint new staff for their businesses say they should ideally have both a breadth and depth of finance expertise and capabilities, a new report from ACCA (the Association of Chartered Certified Accountants) reveals. 
ACCA asked CFOs what was important to them when it comes to appointing newly qualified accountants and what skills enable them to grow their business, particularly since the financial crisis.
The resulting report, The Complete Finance Professional: Why breadth and depth of finance capability matter in today’s finance function outlines why broad-based finance qualifications remain valuable in economically turbulent times.
Candidates with both management and financial accounting skills seen as vital by CFOs looking to hire new talent
Arif Masud Mirza, Head of ACCA Pakistan said: “ The environment in which finance professionals now work – one which is increasingly volatile, complex and competitive – requires them to have a broader range of finance skills – and this is certainly the case in Pakistan. Finance functions have to excel in a wide range of capabilities, including supporting businesses, managing risk, developing effective strategies for growth, driving financial insight and ensuring statutory and regulatory responsibilities are met.”
Key findings from the 500 global finance professionals surveyed for the report show:
- 96% said newly qualified finance professionals should know about financial management; 94% said it was important to have a good understanding of professionalism and ethics. Management skills scored 73%.
- 61% said the best grounding for a newly qualified finance professional to become a future leader was a full appreciation of financial and management accounting.
- 89% said that understanding the links between all areas of finance enabled recruits to minimise future financial risks, with 88% saying it enabled them to deal with financial challenges. 80% said it would enable their new recruit to take their career in any direction they chose.
- When it comes to sustainable business growth, 76% said it ‘really adds value to their business’ for finance professionals to have the complete finance knowledge and skills set, from both financial and strategic management accounting.
Mr Mirza said: “The fact that finance staff should have a broad range of skills and expertise is important to CFOs – should also ensure it is of equal importance to individuals looking to plan their careers and maximise their employability.”
Mr Adamjee Yakoob, FCCA and CFO of Citibank Pakistan, said: ”A strong grounding in accountancy, finance and management as well as the regulatory and legal context is what gives me confidence in new hires. This is also where the ACCA qualification differentiates itself from generalist degrees. Finance professionals are nowadays not only expected to provide a reality check but be business partners by managing funding sources and analyzing investment proposals.
They must have a strong acumen for applying financial concepts and structuring problems along with providing viable solutions. As far as soft skills go – integrity, professionalism, the ability to collaborate with and manage diverse stakeholders are paramount.”
By Ali Ahmad · Thursday, Feb 21, 2013 0 Comments
According to the recent notice issued by ICI Pakistant to Karachi stock exchange, the board of directors of ICI Pakistan appointed Mr. Asif Jooma as the new Chief Executive Officer for the remainder of the term expiring on April 2014. 
Asif Jooma started his career in the corporate sector with ICI Pakistan in 1983. He brings with him over 28 years of extensive experience in senior commercial and leadership roles. Following early years with ICI Pakistan and subsequently Pakistan PTA Limited, Mr. Jooma was appointed as Managing Director of Abbott Laboratories in 2007.
Mr. Jooma has previously served as President, American Business Council, President of Overseas Investors Chamber of Commerce and Industry & chairman of pharma bearue.
He also serves as a director of NIB Bank, Engro Fertilizer and Board of Investment (BOI) – Govt of Pakistan.
By Ali Ahmad · Wednesday, Feb 13, 2013 1 Comment
According to a notice issued by Karachi Stock exchange, UniLever Pakistan & Dawood Hercules Corporation are removed from Karachi Stock exchange 30 Index with new additions of ICI Pakistan and Askari Bank. 
UniLever Pakistan and Dawood Hercules represented approximately 4% of KSE-30 Index.
‘KSE-30 Index’ is used as a benchmark by which the stock price performance can be compared to over a period of time. In particular, the KSE-30 Index is designed to provide investors with a sense of how large company’s scrips of the Pakistan’s equity market are performing. Thus, the KSE-30 Index will be similar to other indicators that track various sectors of country’s economic activity such as the gross national product, consumer price index, etc.
KSE-30 Index is calculated using the “Free-Float Market Capitalization” methodology. In accordance with methodology, the level of index at any point of time, reflects the free-float market value of 30 companies in relation to the base period. The free-float methodology refers to an index construction methodology that takes into account only the market capitalization of free-float shares of a company for the purpose of index calculation.
The Re-Composed KSE-30 Index, which will be based on prices of December 31st 2012, will be implemented with effect from February 15th, 2013.
Other famous companies in KSE-30 Index includes, Fauji Fertilizer, Fatime Fertilizer, OGDC, Pakistan Oil field, Pakistan Petroleum, Bank Al-Habib, Habib Bank, MCB Bank, National Bank of Pakistan, Engro Corporation, Engro Foods, Lucky Cement, D.G.Khan Cement, Hub Power Company, Kot Addu Power Company, Jahangir Siddiqui & C0., Arif Habib Corporation and PTCL.
Its worth mentioning here that UniLever Pakistan already signals voluntary de-listing from Karachi Stock Exchange.
By Nabila Mujtaba · Monday, Feb 11, 2013 0 Comments
Mobilink organized the 6th Mobilink Golf Tournament 2013 at the Royal Palm & Country Golf Club, Lahore. 
The one day tourney in Lahore attracted a number of amateur golfers, representing a diverse segment of Lahore’s corporate and business sector, making for a well competed event, providing healthy entertainment and promoting golf in Pakistan. Mobilink presented a number of valuable prizes to winners and other participants.
Azfar Manzoor, Vice President Business Services Division, Mobilink highlighted, “It is a great pleasure to host our customers in the 6th Mobilink Golf Tournament, Lahore. With our customers’ fervor and support over the years, this recreational event has turned into one of the most prestigious golf tournaments in Pakistan. We will continue to bring this opportunity to our customers in the coming years.”
Now in its sixth edition, the 18-hole tournament has consistently attracted golfing enthusiasts from within the Mobilink customer base. A similar tournament is also in the planning for Mobilink customers in Islamabad over the coming weeks.
By Ali Ahmad · Friday, Feb 8, 2013 0 Comments
The Securities and Exchange Commission of Pakistan (SECP) has said that it registered 329 companies in January, with Lahore office registering the highest number of firms. 
Authorised and paid-up capital of these companies is PKR 500 Crore and PKR 57 Crore respectively, says an SECP press release.
The new incorporations include 304 private companies, 16 single-member companies, five public unlisted companies, two non-profit associations and two foreign companies – one each from the Cayman Islands and the US.
Nationals of Norway, Bangladesh and South Korea made investments in three new companies in the information technology, finance and banking and food and beverages sectors.
The trading sector has the largest share in new incorporations with 47 companies, followed by tourism with 44, services 29, IT 23, construction 18, corporate agricultural farming 14 and pharmaceuticals 13.
The Company Registration Office (CRO) of Lahore saw the highest incorporations with 108 companies, followed by CROs of Karachi and Islamabad, registering 90 and 84 companies respectively.
Multan CRO registered 20 companies and CROs in Peshawar and Faisalabad registered 16 and 9 companies respectively. Quetta and Sukkur CROs registered one company each.
In the month under review, returns for an increase in authorised capital of 114 companies were accepted, with total capital increment of PKR 2,426 Crore. Apart from this, 89 companies filed returns for enhancing the paid-up capital with total increase amounting to PKR 420 Crore.
In the second quarter (Oct-Dec) of financial year 2012-13, the SECP granted licences to 11 non-profit associations, taking the number of such licences in the first half to 25.
Of the 11 associations, four got licences in the education sector, two for charity activities and one each for services, dairy sector, rural development, social welfare and research and development.
