Day: December 21, 2021

Auto financing has broken all previous records this year with a massive increase in demand resulting from the arrival of new cars and decreased rates of interest. Ironically, it had a minimal increase of just one percent on a Month-over-Month (MoM) basis.

Car industry analyst Arslan Hanif told DAWN News that this negligible growth is due to the new regulations of the State Bank of Pakistan (SBP) to curb the rising import bill and achieve a balance of payments. He added that the effects of these regulations will be clearer around January 2022.

Hanif claimed that the increase in interest rates from 7 percent to 9.75 percent in September has impacted the demand for vehicles as well. He explained that although the Year-over-Year (YoY) increase in auto-financing is great for the car industry, it has added significantly to the towering import bill that the government seeks to lessen.

These measures are being taken to pin down the rising sales and imports of luxury vehicles in line with the government’s aim to encourage the sales of locally assembled economy cars and to promote the local manufacturing of affordable cars and electric vehicles (EVs).

The recent sales and production data from the Pakistan Automotive Manufacturers Association (PAMA) has reflected the shift in demand for vehicles as car sales dropped from 17,413 units in October to 15,351 units in November.

Umair Naseer of Topline Securities remarked that an impending rise in regulatory duty on Completely Built-up Units (CBUs) will push up car prices to hurt the sales of CBU cars even more.

Source: Pro Pakistani

Shoaib Mumtaz has assumed the charge of Acting President and CEO of MCB Bank Ltd with effect from 21 December (today). Mumtaz replaces outgoing President and CEO, Imran Maqbool, whose term of employment ended on Monday.

Mumtaz, a graduate from the United States of America, is a seasoned banking professional with over 29 years of experience. He has been associated with MCB Bank since 1992 and has worked in various key roles including Branch Banking, Credit Risk and Corporate Finance.

He has also led the bank’s strategy and vision of Corporate Banking and International Operations of MCB Bank in United Arab Emirates, Kingdom of Bahrain and Sri Lanka.

Source: Pro Pakistani

Although it is a redundant movement, the Pakistani Rupee (PKR) slid to a new all-time low against the US Dollar (USD) and depreciated by one paisa against the greenback in the interbank market today. It hit an intra-day low of Rs. 178.22 against the USD during today’s open market session.

The local unit bent marginally against the USD by 0.01 percent and closed at Rs. 178.05 today after it held its own and closed at the 178.04 level in the interbank market on Monday, 20 December.

The rupee struggles to report any gains against the dollar on the back of the usual inflationary pressures that have impeded fiscal progression since mid-November. Moreover, Pakistan’s current account has recorded the highest deficit of $1.91 billion during the current financial year due to the soaring import bill, according to the statistics released by the State Bank of Pakistan (SBP) on Monday.

The staggering deficit poses a worrisome situation for the economy and the central bank which has consistently introduced various strict measures to curb non-essential imports in the country. However, results are yet to be seen as the import bill has remained out of control since the beginning of FY2021-22.

In light of the PKR’s interbank performance during the trading hours earlier today, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, tweeted, “[As] per SBP estimate of $13bn, CAD for FY22, July-Nov of $7.1bn is higher than expected”.

He remarked that the growth in imports is troubling and the level of support offered in remittance inflows through exports growth is not enough.” At this pace, CAD could hit 4.5% or higher by roughly $1.5 billion,” he added.

The PKR reversed gains against most of the other major currencies as well. It posted losses of 56 paisas against the Pound Sterling (GBP), 54 paisas against the Australian Dollar (AUD), and 81 paisas against the Euro (EUR).

It held out against both the UAE Dirham (AED) and the Saudi Riyal (SAR) in today’s interbank currency market.

Conversely, the rupee appreciated against the Canadian Dollar (CAD) and posted gains of 21 paisas in today’s interbank currency market.

Source: Pro Pakistani

Railway Constructions Pakistan Limited (RAILCOP) has signed a memorandum of understanding (MoU) with M/s Al Furqan Holdings Private Ltd and BIL Pakistan (Pvt.) Ltd for the construction of a new 105-kilometer rail track in Thar Coal.

The project, linking Thar Coal Block II with New Chorr station on the Hyderabad-Mirpurkhas Rail link, valued at 170 million euros will be executed under 100% foreign direct investment (FDI) by Al Furqan Group UAE.

CEO RAILCOP, Syed Najam Saeed, speaking on the occasion said the project will provide a new rail link from Thar Coal Mines to the National Railway Network for ensuring the availability of indigenous Thar Lignite fuel throughout Pakistan. The project will give maximum coverage of all Thar Coal Mine Blocks and far-flung population centers in Tharparkar district while avoiding any existing infrastructural relocations, he added.

Najam said that the new rail link would be helpful in the coal-driven energy projects executed under China Pakistan Economic Corridor (CPEC).

He said that it is the vision of Prime Minister Imran Khan to attract FDI with attractive incentives and policies for the investors in a competitive business environment.

He reaffirmed the mission of Federal Minister for Railways, Muhammad Azam Khan Swati, in transforming Pakistan Railways into a profit-generating entity with such public-private partnership (PPP) projects. He thanked Secretary/Chairman Railways, Habib-ur-Rehman Gilani, for his continuous support for the project.

Najam also extended special gratitude to BIL Pakistan (Pvt.) Ltd CEO, Tauseef Zaman, for his role in the project on behalf of Pakistan Railways and RAILCOP.

He further thanked the Ministry of Foreign Affairs for its endeavors to attract foreign investment in the country. It was mentioned that the investment was made possible with the efforts of Faisal Abro, an officer of the Foreign Service of Pakistan, posted at the Permanent Mission of Pakistan to Organization of Islamic Cooperation (OIC).

The project will create thousands of jobs, will boost investment in other associated projects, and enhance the export of coal.

Source: Pro Pakistani

The recent amendments carried out through the Companies Amendment Bill, 2021 would significantly promote start-ups, business innovation, entrepreneurship and improve the general business climate in the country.

Significant amendments include the addition of a new definition for “startup company,” removal of the requirements of filing unaudited financial statements for private companies, removal of the common seal, and the elimination of the requirement of filing the subscription form.

The newly introduced definition refers to a startup as a company incorporated within ten years, with an annual turnover of up to Rs. 500 million in any financial year, and working towards the innovation, development, or improvement of products or processes with a high potential of employment generation or wealth creation. The inclusion of the definition will allow special privileges to startup companies to attract investment, acquire credit, and innovative business products.

Moreover, new clauses have been added to allow private companies to issue shares to new investors against properties and to their employees under employee stock option schemes. Private companies have also been allowed to buy back their shares.

Other important amendments include empowering minority shareholders holding five percent shares to give notice for calling a members’ meeting. This was revised downward from ten percent to protect the rights of minority shareholders.

Furthermore, the board resolution through circulation was earlier required to be signed by all directors, and now it can be deemed passed if approved by a majority of directors. To promote gender equality, requirements to mention husband’s name for registration of a company have been abolished, bringing company registration requirements at par for men and women.

Source: Pro Pakistani

Gulf Islamic Investments LLC, a UAE-based Company, has also shown its interest in acquiring shares of Samba Bank being one of the partners of Fatima Fertilizer Limited in the potential deal.

According to the stock filing, Fatima Fertilizer Group, which showed an interest in taking over Samba Bank’s major shares, has formed a consortium along with Gulf Islamic Investments LLC and the Management Group — the present management of the company.

The consortium through its manager, Arif Habib Limited, has made a public announcement regarding the intention to acquire 84.51 percent or 852 million ordinary shares of Samba Bank.

Gulf Islamic Investments LLC provides Financial Analysis and Financial Consultancy Advisory services for Shariah-compliant alternative investments such as private equity, venture capital and real estate. It is a part of GII Holding group (GII) which is an Investment Holding Company headquartered in Abu Dhabi with Corporate Offices in Dubai and the Group’s presence in DIFC, UK, Cayman, Luxembourg, Germany and representative offices in the US and Hong Kong.

The company has made two acquisition deals each worth $100 million in the recent weeks of December.

Fatima Fertilizer Company Limited and Gulf Islamic Investments LLC, the two companies, will have a major financial contribution in the potential deal.

Besides, the Management Group, which is led by CEO and President Shahid Sattar, will provide the support of technical aspects in the deal including the due diligence of the Samba Bank.

The addition of the new players in the deal forming a consortium will make a strong case of share acquisition and purchase deal as the banking regulatory usually allows new investors with a sound knowledge of the banking industry with strong financial support from the investors.

The notification mentioned that the public announcement of intention to acquire voting shares/control of Samba Bank Limited is subject to obtaining the requisite regulatory approvals including clearance of fit and proper criteria/permission for conducting due diligence from the State Bank of Pakistan.

The public announcement of intention may be withdrawn if the requisite approvals are not granted by the concerned regulatory authority(ies).

Source: Pro Pakistani