Category Archives: General Business News

Pakistan’s Liquid Foreign Reserves Position

Karachi, June 14, 2018 (PPI-OT): The total liquid foreign reserves held by the country stood at US$16,457.1 million on 08 June 2018. The break-up of the foreign reserves position is as under:-

i) Foreign reserves held by the State Bank of Pakistan: US$ 10,065.6 million

ii) Net foreign reserves held by commercial banks: US$ 6,391.5 million

iii) Total liquid foreign reserves: US$ 16,457.1 million

During the week ending 08 June 2018, SBP’s reserves increased by US$24 million to US$10,066 million.

For more information, contact:
Chief Spokesman,
State Bank of Pakistan (SBP)
Central Directorate
I.I. Chundrigar Road, Karachi, Pakistan
Tel: +92-21-111-727-111
Tel: +92-21-39212562
Fax: +92-21-39212433 – 39212436
Email: chief.spokesperson@sbp.org.pk
Website: www.sbp.org.pk

Delivering Happiness, One Meal at a Time

Lahore, June 14, 2018 (PPI-OT): Cheetay.pk, one of Pakistan’s leading e-commerce platforms providing the best food delivery service, is proud to announce ‘Cheetay Dastarkhwan’, a CSR campaign launched in collaboration with Rizq at Firdous Market Chowk and Khokhar Chowk, Johar Town, Lahore.

Ramzan is a special month for Muslims all over the world; it is even more special for Cheetay, as it has committed to feed as many rozaydaars as possible during Iftar time. The purpose of the ‘Cheetay Dastarkhwan’ campaign is to distribute meals at convenient locations in Lahore, so that a vast majority of people returning from work can conveniently break their fast. The Dastarkhwan is open for anyone who is in need of breaking their fast while on the road.

The main aim of this campaign is to provide dastarkhwan meals to people irrespective of caste, social class or creed. Cheetay.pk encourages such activities throughout the year, as it believes in giving back to the society. However, Ramzan is an especially prominent time of the year for giving. Team Cheetay along with its partner Rizq, successfully distributed 450 Iftari boxes at different locations in Lahore.

Commenting on the campaign, Mr Ahmed Khan, founder and CEO of Cheetay, said, “We’ve built the company on the premise to serve people and since we’re all always preoccupied with tremendous work, we hardly get the time to think, introspect and do something for the greater good. I am an ardent believer in helping out and being there for the people who rely on us. In a culture of cutthroat corporate knavery and expansion, the race to earn a buck and incessant focus on work, we are neglecting the spirit of altruism.”

He further added, “I know it’s just the tip of the iceberg but we wanted to capture the spirit of Ramzan by helping everyone i.e. a bystander, anyone commuting home from work and anybody in need to break their fast while on the road. We make it a point to be cognizant of our social responsibility as our brand stands for what it represents, spreading happiness!”

Cheetay’s initiative to deliver food at customers’ doorsteps has not stopped during this holy month. Volunteering to keep the spirit of Ramzan alive, Cheetay has upped its game by not only continuing with regular deliveries, but by going the extra mile by distributing free food through this giveaway campaign. This not only fulfills their business motto, but also contributes to spreading the message of this month.

For more information, contact:
Cheetay.pk
Tel: +92-42-111-119-666, +92-340-3332830
E-mail: info@cheetay.pk
Website: www.cheetay.pk

JCR-VIS assigns AA+ rating to Basel 3 compliant additional Tier 1 instrument by United Bank Limited

Karachi, June 12, 2018 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned preliminary rating of ‘AA+’ (Double A Plus) to United Bank Limited’s (UBL’s) proposed Basel 3 compliant additional Tier-1 (ADT-1) TFC. Outlook on the assigned rating is ‘Stable’. Rating will be finalized upon review of signed legal documents. The assigned rating to ADT-1 instrument incorporates JCR-VIS standard notching criteria for Basel 3 compliant ADT-1 instruments issued by AAA rated Banks.

UBL is in the process of issuing a listed, perpetual, unsecured, subordinated, non-cumulative and contingent convertible debt instruments amounting up to Rs. 10.0b (inclusive of Green Shoe Option of Rs. 3.0b). The issue proceeds will contribute towards the bank’s ADT-1 capital and will be utilized towards enhancement of the bank’s business operations. UBL’s ADT-1 instrument will rank ahead of claims of ordinary shareholders but below the bank’s senior creditors, including depositors.

JCR-VIS has assigned entity ratings of AAA/A-1+ (Triple A/A-One Plus) to UBL indicating highest credit quality. The assigned ratings reflect the Bank’s strong domestic franchise, existing market share and diversified operations. Moreover, financial profile is strong as evident from robust liquidity profile and healthy existing and projected capitalization buffers. UBL has exhibited sustained improvement across key performance areas including asset quality, liquidity and capitalization. Tier-1 and overall CAR stood at 11.7% and 16% at end-1Q18, respectively; significantly above regulatory requirements.

The assigned rating portrays the relative risk of the Tier-1 instrument wherein issuer has full discretion on coupon payments, interest servicing from only profits for the year and conversion feature in the event of pre-specified trigger events, lock-in clause and point of non-viability in terms of regulatory requirements. While the regulatory framework may not consider a missed coupon payment as a default; the credit rating methodology employed by JCR-VIS would treat such missed payments as an event of default. In normal course of business, JCR-VIS believes that chances of non-performance risk are considered remote.

For more information, contact:
CFA
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk

Ratings of Saudi Pak Industrial and Agricultural Investment Company Limited

Karachi, June 12, 2018 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed entity ratings assigned to Saudi Pak Industrial and Agricultural Investment Company Limited (Saudi Pak) at ‘AA+/A-1+’ (Double A Plus/A-One Plus). The previous rating action was announced on June 19, 2017. Outlook on the assigned rating is ‘Stable’. Ratings assigned to Saudi Pak take into account its strong shareholders’ profile, with two sovereigns, Government of Pakistan (GoP) and Kingdom of Saudi Arabia (KSA), having an equal stake in the company under the terms of a joint venture agreement.

The company’s risk appetite remains moderate with disbursements mainly targeted towards mid-tier companies. With reduction in average benchmark rates, yield on investments declined, thereby more funds were channelized towards lending portfolio. In line with higher disbursements, the gross loan portfolio was reported marginally higher at end-FY17.

Concentration in the lending portfolio has remained high as the ten largest exposures represented more than half of performing advances. However, high concentration in lending portfolio is a function of small size of the portfolio itself. Sector wise concentration exhibited increase with largest exposures primarily pertaining to energy, oil and gas, textile and dairy and poultry at end-FY17. Asset quality indicators exhibited improvement on a timeline basis owing to reduction in the quantum of non-performing loans as a result of recovery/regularization of clients.

Major portion of the investment portfolio has been deployed in government securities primarily T-bills; the credit and interest risk emanating from the same is limited owing to shorter maturity of instruments. Among listed equities, investment pertains to dividend yielding and highly liquid stocks with major exposures in power, banking and fertilizer segments. During FY17, the limit on investment in listed equity has been increased.

Despite lower average markup bearing assets, core income of the company improved on the back of higher dividend and rental income. DFI sector has faced a general decline in net markup and non-markup income owing to prevalent constant benchmark rates and lackluster stock market performance; however Saudi Pak’s pre-tax profitability was largely less affected than the peer group.

Going forward, the institution’s net markup income is projected to augment in line with increased focus towards corporate lending portfolio. Yield on mark-up bearing assets also declined in view of lower proportion of high yielding PIBs portfolio during FY17. Resultantly, spreads were recorded lower on a timeline basis. However, accounting for deferred tax, profit after tax was reported higher during FY17.

As a secondary market borrower, the company is primarily dependent on funding from other financial institutions; fund mobilization activity under COIs is currently limited. More than two-fifths of the borrowings are short term in nature. Owing to sale of long-term investments, asset liability mismatch previously evident in up to 6 months bucket was largely rectified.

Overall liquidity profile of the institution, albeit declined, still remained adequate in line with presence of sufficient liquid assets on the balance sheet. Tier-1 equity augmented on a timeline basis on the back of profit retention. Net NPLs (including TFCs) as a portion of Tier-1 capital, were reported lower during the outgoing year as an outcome of decline in NPLs and enhanced equity base.

For more information, contact:
CFA
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk

JCR-VIS Reaffirms Ratings of Attock Cement Pakistan Limited

Karachi, June 12, 2018 (PPI-OT): JCR-VIS Credit Rating Company Limited has reaffirmed entity ratings of Attock Cement Pakistan Limited (ACPL) at ‘A+/A-1’ (Single A Plus/A-One). Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on October 31, 2017.

The assigned ratings to ACPL incorporate moderate business risk, strong financial risk profile and adequate corporate governance framework. Financial and operational performance metrics continue to be commensurate with the benchmarks for the assigned ratings despite challenging operating environment given the supply side dynamics in the cement sector particularly in the South region where capacity enhancements over the last 6 months are substantial to alter market dynamics. The ratings also reflect strong financial profile of the parent entity, Pharaon Investment Group Limited Holding S.A.L., having diversified interest in multiple sectors.

Demand outlook for the sector is expected to post a stable growth on the back of ongoing infrastructure projects and demand for housing units and commercial space. However, delay in infrastructure projects due to political uncertainty (in an election year) and increase in interest rates may slightly impact projected demand growth. After witnessing significant decline during FY18, JCR-VIS expects industry margins to remain under pressure in FY19 on account of higher coal prices, rupee depreciation and expected increase in competition, particularly in the South region. ACPL’s existing market position, brand strength and diversified sales mix through extensive penetration in local and export markets would be a competitive edge in challenging times.

ACPL is currently operating with 3 production lines. A significant milestone during the ongoing year was completion of line 3 which started commercial operations effective January’2018 and has increased installed capacity to over 3m TPA (FY17: 1.83m TPA). The new production line has continued satisfactory operations for the last five months. Progress has also been noted with regards to ACPL’s plan to operate a cement grinding plant in Iraq. The plant is expected to commence operations during 1QFY19.

Assessment of financial risk profile incorporates conservative financial policy as reflected by low leveraged capital structure and strong liquidity profile as evident from favourable working capital cycle, healthy cash flows in relation to outstanding obligations and strong debt servicing ability. While pressure on margins is expected to persist, volumetric growth in sales alongwith higher efficiencies post expansion to support profitability. Debt servicing ability of the Company is projected to remain strong over the repayment period and is likely to withstand pressure on margins.

For more information, contact:
CFA
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk

Government drops petrol and dollar bomb days before Eid: FPCCI

Karachi, June 12, 2018 (PPI-OT): The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday said the government has dropped petrol and dollar bomb on masses days before the religious festival of Eid. A record reduction of Rs4.40 in the value of local currency versus US dollar is a big blow to the masses while upward revision in the prices of petroleum products will jolt the whole economic structure of the country, said President FPCCI Ghazanfar Bilour.

In a joint statement issued here today, Ghazanfar Bilour, SVP of FPCCI Mazhar Ali Nasir and Chairman Coordination of FPCCI Malik Sohail said that the devaluation has added almost Rs400 billion to foreign debt and it has also exposed the tall claims of politicians regarding economic stability. They noted that the finance minister of the PML-N had recently assured the masses that further devaluation is not needed but the policymakers took everyone by surprise.

The business leaders said that the difference in the interbank and market rate of dollar is spreading which will discourage legal money transfers and promote hundi hitting remittances. Record trade deficit and current account deficit has added the economic challenges while the economic managers have found it convenient to tackle problems by devaluing the currency and borrow which amounts to economic suicide, the business leaders added.

They said that SBP would only point towards problems but prefers to remain mum about solutions which is damaging its credibility. Malik Sohail said that masses should not be kept in the dark if all the decisions are being taken on the behest of the IMF.

Lashing out at the failed policies of the former government, he said that masses and dejected business community should not be made to pay for the blunders of the policymakers. The FPCCI leaders asked the caretaker government to take back the decision in the national interest as it will stoke inflation and make life difficult for the masses reeling under multiple issues.

For more information, contact:
Secretary General
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
B-1, Federation House, Main Clifton Road,
Shahra-e-Firdousi, Karachi-75600, Pakistan
Tel: +92-21-35873691, 93-94
Fax: +92-21-35874332
Email: info@fpcci.com.pk
URL: www.fpcci.com.pk