Pakistan’s forex reserves grow to $10.21BN: IMF says goals being met and China provides additional $500M
China remains Pakistan's all-weather ally
Pakistan’s forex reserves continue to see healthy growth with the latest figures showing a $260M increase since the 1st of January, 2009. The total pool of reserves now stands at $10.21BN. With additional measures being taken to shrink the trade gap – which has already seen a major reduction – the reserves are expected to continue to rise. The $10.21BN amount does NOT include the bulk of the IMF package approved for Pakistan. An additional $4.5BN is still to be released by the IMF.
China has injected an additional $500M into Pakistan’s economy. Chinese businessmen and companies have been visiting the country frequently over the past several months, and Punjab Chief Minister Shahbaz Sharif’s successful trip to China also sealed several joint venture deals between the two countries. Chinese investments in Pakistan over the recent past now stand at $1.3BN.
Multiple factors are in play, which need to be taken into account to form a picture for where we will stand from the point of view of our economy, over the next year. Here is what we can look forward to: (more…)
Telenor Pakistan about to turn into a bank
M'man, Jon Eddy Abdullah.
What’s that, Tech Lahore? Telenor, the cellular telephony company is about to turn into a bank? Surely you’ve finally lost your blooming mind! What utter malarky, Tech! Go take a cold shower!
Well, my learned audience, far from losing his/her mind, Tech Lahore is as sharp as ever. A veritable young whippersnapper, frankly. And the news about Telenor turning into a bank might sound ludicrous, but it isn’t.
Under the now provedly exciting leadership of Jon Eddy Abdullah, Telenor Pakistan has decided to purchase a 51% controlling stake in Tameer Microfinance Bank (TMB). This is obviously not a bank many of us have heard of. And to be blunt about it, the brand or the size of the bank probably had nothing to do with the decision. This is just a quick, inexpensive way of getting a banking license without having to apply for one. (more…)
Singapore’s Temasek Holdings to invest $147M in Pakistan’s NIB Bank
Pakistan's NIB Bank attracts a sizeable Temasek investment
Amidst all the talk of FDI and Pakistan’s foreign exchange reserves, Singapore’s sovereign investment fund, Temasek Holdings, announced their intent to invest $147M in Pakistan’s NIB Bank. This is welcome news for NIB and Pakistan’s banking sector in general. Not only will the additional capitalization shore up NIB’s position, it will also illustrate how favourable Pakistani bank valuations are currently.
It should be noted that not one major (or minor) Pakistani bank has been shut down thus far despite the global financial crisis. Unlike the situation in many countries, particularly the USA, in Pakistan there have been no runs on banks or other reactions that showcase a widespread trust deficit. The fact that NIB, one of the country’s smaller banks, has attracted a high profile foreign investor may point to a impending larger trend. Clearly, with the arrival of Barclay’s, HSBC, Dubai Islamic Bank and many other international institutions, Pakistan has already demonstrated its ability to attract top-tier names and deliver growth.
More on the story after the fold. (more…)
Pakistani exports to UAE rise to $1.8B – Software growing fast
A rapidly growing Dubai is increasingly using Pakistani software
Mansour Bajwa, Commercial Counselor for Pakistan in Dubai, was quoted in this story highlighting the rapid growth in exports from Pakistan to the UAE. “Pakistan is also increasing exports of [..] IT software products, particularly to the UAE“, he said. Pakistani software shops have been developing solutions for UAE companies for many years now, but perhaps an even greater contributor of Forex receipts is the large Pakistani IT diaspora at work in Abu Dhabi and Dubai. It’s not a stretch to say that Pakistanis play a – perhaps the - pivotal role in the UAE’s IT industry.
Back in 2007, Pakistan exported about $1.2B worth of goods and services to the UAE, and so the $600M increase in just one year represents growth of 50% YoY. Given the UAE’s own explosive growth, the potential for Pakistan exports to the Emirates as well as the GCC countries, appears limitless. More from the story after the fold. (more…)
2007-08 Foreign exchange inflows to Pakistan highest in history
FY ‘07-08 has been closed out and we now know how well the country fared in attracting foreign inflows. In short, the numbers look very good. The Business Recorder reports that Pakistan attracted $6.45BN in foreign remittances. This represents growth of almost 18% over FY 2006-07. Not too shabby! In terms of the countries from where these remittances were sent, the US tops the list with about $1.76BN, next come Saudi Arabia and the UAE at $1.25BN and $1.1BN respectively. Fourth on the list are the GCC countries (Kuwait, Qatar, Bahrain etc.). This distribution makes it apparent how integral inflows from the middle east are in the overall equation. For the complete story, read on. (more…)
China Telecom to invest a further $800M in Pakistan
China Telecom is now the world’s largest telco. It’s yet another indication of how influence and power are continuing their eastward journey… as Bob Dylan once poignantly said, “The times they are a changin’”. In order to supplement its domestic growth, China Telecom is looking at international markets to expand into. Their 2007 entry into Pakistan has been one of the most significant moves they’ve made in this direction. Last year, they struck a deal to buy-out Paktel, which has since been rebranded Zong, and launched a significant campaign to enhance their share of the mobile telephone market.
The Business Recorder reports today that Mr. Wang Gian Zhuo, the President of China Mobile has announced that his company’s plans in Pakistan will be augmented by a further $800 Million investment to develop infrastructure and lay the ground work for more advanced service provision. And as a demonstration of their commitment to Pakistan, China Telecom has also announced that they will be launching several initatives for socio-economic uplift, including the distribution of free text books to deserving children in the country. Great idea and something that will go a long way in building goodwill for China Telecom and its products! (more…)
Saudi Arabia subsidises $4.82BN worth of oil for Pakistan, announces multi-billion dollar infrastructure investments
While the world reels under the pressure of rising oil prices. Pakistanis have something to celebrate. Mr. Zardari, the co-chairperson of the ruling People’s Party, and the Prime Minister, Mr. Yusuf Raza Gilani were in Saudi Arabia to discuss a number of bilateral issues with various Saudi officials, including King Abdullah. As a consequence of these discussions, the Saudi government has made a series of announcements that many in Pakistan will be pleased to hear.
First, Saudi Arabia will extend a special oil facility to Pakistan (SOF) to the tune of USD $4.82BN, or roughly equating to 110,000 barrels of oil per day.
Second, Saudi Arabia will invest several billion dollars in infrastructure investments in Pakistan.
Finally (and separate from these announcements) the UAE will continue to provide oil to Pakistan on extended payment terms.
Mr. Zardari will be providing additional details in an upcoming press conference. These announcements should do a lot to boost Pakistan’s economic indicators. For one, it represents almost 50% of the trade deficit and almost instantaneously wipes out the bulk of it. For another, the FDI inflows as a consequence of infrastructure investments will, in the short term, provide additional USD$ reserves and in the long term, will add significant capacity to the economy. The Business Recorder report can be found after the fold. (more…)
Pakistan has highest Tele-density in South Asia, $9BN FDI for IT so far: Prime Minister
While this comes as no surprise, it is good to be reminded! The Prime Minister, while speaking to a delegation of the GSM Association explained that Pakistan has achieved a teledensity of 58%, which is the highest in South Asia. The infrastructure investments Pakistan has made in the telecom space, fiber, cellular and wireless broadband, are quite incredible.
The Prime Minister, Mr. Yusuf Raza Gilani, also quoted investment figures concerning the IT industry. So far, Pakistan has attracted $9 Billion dollars in foreign investment in the IT industry. In addition, the telecom sector attracted $3 Billion dollars last year. This figure is expected to rise as we have been reporting.
Warid Telecom to invest a further $1.5BN in Pakistan by end 2009
Warid Telecom’s cell phone service has been quite a success story. They’ve grown their subscriber base rapidly and are well poised to deliver other services to their customer base. A couple of the big infrastructure efforts they’ve been working on have been through their parent company, Wateen. They’re planning to build their own high-bandwidth Fiber network throughout the country and are also delivering WiMax services to consumers and businesses in Pakistan.
Their investment in Pakistan hasn’t stopped though, because Wateen and Warid see tremendous growth potential over the coming years. Their CEO, Marwan Zawaydeh, and Chief Commercial Officer, Thomas Yeo, recently announced that they would be investing a further $1.5BN in infrastructure development in Pakistan over the next 18 months. Some of this money will be used to double their cell towers to 5,000 sites by end of 2008. Good going Warid! Quotes from a news story and a link to the article after the break. (more…)
Foreign remittance inflows to Pakistan hit new high
Foreign exchange inflows to Pakistan have hit a new high of $3.06BN for the first half of the year. This is a 20% increase over the same period last year. I mean, really! One wonders about all the press Pakistan has been getting in the western media – particularly Newsweek and the Economist. These two examples of fine journalism are apparently happy sending their reporters to sip tea in Pakistan and document the various dangers that exist here (e.g. too much good food, REAL tea, polite people etc.), so that their readership can be illuminated appropriately. Of course they do have a global search and replace routine they run before they publish the article, e.g. sed s/good food/terrorism: sed s/tea/bombs etc. (more…)
