The State Bank of Pakistan (SBP) has taken various measures to manage inflation and interest rate. In September 2013, SBP linked minimum rate of return on average balances held in saving deposits with the floor of the interest rate corridor, which means return on saving deposits cannot be more than 50 bps lower than the floor of the interest rate corridor, which is currently at 7.5 percent. This measure …
Read More »Investment options to counter inflation
Pakistan has been plagued with inflation for a long time, which creates pressure to meet day-to-day household expenses in limited income. It is extremely important that an additional source of income is available, which cushions monthly expenses. Investment management has long been carried out for additional income, however, in an inflationary environment where cost of living is increasing year-on-year, having and executing a plan for investments of residual funds …
Read More »The CNG dilemma: when and how should it end?
CNG was introduced in Pakistan to counter high price of fuel. As a new business venture, many businessmen opened CNG stations to reduce the cost of transportation. CNG kit import became a wide market and especially popular in the transport industry. Introduced in mid 1990’s no one predicted the issues arising out of CNG supply, which we witness today. As the price of fuel based on international oil prices …
Read More »Pakistan steel mills — past and present
Pakistan Steel Mills (PSM) is the largest corporate entity owned by the government with production capacity of 5 million tons. Privatization of PSM was initiated under the reign of former prime minister Shaukat Aziz, which was met with controversy. The Supreme Court held the privatization effort as defined process and procedures were not followed. Sale of the country’s largest industrial unit went down the drain whereas the matter was …
Read More »Banking sector review
The banking sector through CY13 faced tough challenges with external factors including law and order situation, political uncertainty, strikes causing closure of bank branches in distressed areas to name a few. The State Bank of Pakistan (SBP) require banks to have minimum capital of Rs10 billion by December 2014, which will be a challenge for banks below the required threshold forcing another round of mergers and acquisitions review. The …
Read More »Economic developments and outlook
The State Bank of Pakistan (SBP) has taken various measures to manage inflation and interest rate. In September 2013, SBP linked minimum rate of return on average balances held in saving deposits with the floor of the interest rate corridor, which means return on saving deposits cannot be more than 50 bps lower than the floor of the interest rate corridor, which is currently at 7.5 percent. This measure …
Read More »Saudi investment in Pakistan: strong bilateral ties to continue
Saudi Arabia and Pakistan, both being Muslim countries enjoy a cordial relation. Saudi Arabia has high regard for Pakistan for being the first Muslim country to hold nuclear power. Those seeking jobs in Saudi Arabia are given visa without any major hiccups. Prime Minister Nawaz Sharif after his exile from Pakistan lived in Saudi Arabia during which time he developed close ties with the Royal family. Saudi Arabia in …
Read More »Education key to peace and economic stability
Based on demographic profiling, Pakistan has a population of 180 million people with a median age of 21.5 years for both male and female. Based on literacy which is defined as those who have attained the age of 15 and are able to read and write is estimated at 49.9% with male literacy at 63% and female literacy rate being 36%. Pakistan primarily comprises of a young population, which …
Read More »Expected 3g/4g auctions – what does it mean for mobile communication?
A major change in the cellular market is the upcoming 3G/4G auctions which under the directives of Pakistan Telecommunication Authority (PTA) expected to be introduced in the country in the 3rd week of this month. These auctions will bring in US$1.3 billion in investments. The auctions are expected to give Pakistan a jump in mobile communication services, which have long been part of more developed markets. The auctions will …
Read More »Business environment for retail business
With the positivity instilled with the current government, most segments of the economy are showing positive signs of growth. When talking to businessmen on market potential, most say that the sector which is the best choice for investments is the retail sector. Pakistan has population of 180 million people, and frankly, the only entertainment is food and shopping. The demand of both food and shopping is counter to the …
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