High mark up reduces car leasing in Ramazan
RECORDER REPORT
KARACHI (October 13 2007): High mark up has reduced cars leasing to about 20 to 25 percent during this Ramazan as compared with the sale in last Ramazan. Talking to Business Recorder, car dealers said that higher black money for popular models, uninterrupted import of second hand cars at higher prices and mark up exceeding 17 to 18 percent have all contributed toward the decrease in sales.Even the rental in Ijarah financing has also remained hovering at around the same mark up rate as are being offered by the commercial banks. Those who have tried to find some solace in Islamic Banking system are not better off even with Ijarah.Car dealers said that increase in black money for delivery from ready stocks and lengthy waiting period for delivery after booking of cars has made the leasing expensive. One is hardly spared by the dealers or the assemblers if one wishes to lease a car or opts for spot payment of total amount. Even the Islamic banking had no solution to this problem, said dealers.The import of second hand cars has flooded the market. Many popular brands, in smaller size, are available in varying prices. These range from five to three years old models. It is the luck of a buyer that he gets a good bargain. In case of Mini Pajero, which fetches less prices people have been cheated in a big way.A dealer said that these clean-looking worn out mini cars are heavy in petrol, expensive in parts, and weak in suspension do give satisfactory service even for six months. In his estimation the number of these mini cars imported in bulk by a few people are still lying with dealers and available on competitive prices.Dealers said the banks should revise long-term leasing rates, make insurance less expensive and arrange with assemblers for quick delivery of units and make hidden charges known to their customers.They said that Ijarah financing had attractive features. One of them is that an Islamic bank is partner in loss and profit both, whereas a commercial bank covers its risks only. Car dealers are of the opinion that car-leasing mechanism should be studied once again and possibility of coming up with a product that provides protection to lessees would be most advisable.They said that increase in mark up would hit car financing in the country. There is need to re-examine rates and come up with affordable proposals. The current decline in the sales of cars through leasing this Ramazan is an indication of difficulties that customers are faced with. The car leasing business, which had given boost to overall consumer financing in Pakistan should be kept at affordable level otherwise there would be further slow down in its demand, said car dealers.
Tuesday, October 16, 2007
Monday, October 15, 2007
BR: Pakistan far from global venture financing radar
Pakistan far from global venture financing radar
ARIF RANA
SAN FRANCISCO (October 14 2007): Pakistan has yet to come on the global radar for venture capitalists' financing for the new practicable ideas as it simply misses a link between innovation and a culture to work hard to turn them into a reality.Venture capitals is a fast growing global phenomenon for providing financing to those who conceive innovative ideas for any work and then strive to make a reality. Pakistan by no means is less important for innovation and working on the new ideas, but unfortunately this concept and its importance is not receiving significance it's getting from the rest of the world.The USA and Europe are among the first choice for the people who think differently and attach extraordinary importance to innovative ideas. It's not enough to think great and then conceive sublime ideas. Rather, it is the first step towards making something extraordinary and attract those who believe that it's commitment and urge to do a great job for humankind service.Mamoon, a young Pakistani working with a venture capital, during a meeting with Business Recorder at Stanford University in California, spoke on the concept of innovation and financing procedure of his firm for financing such initiative. .He attached extraordinary importance to innovation to be on board with today's world rightly called as 'age of innovations and new ideas' to make human being lives more comfortable and progressive.His venture capital has so far financed around 400 projects and got encouraging response from those who, instead of following the traditional ways and means, preferred to work on the new ideas. His venture capital provided financing to the projects taken up by Chinese and Indians but none could be picked up from Pakistan.Mamoon terms absence of new ideas and innovations as a major reason of Pakistan's poor performance and wants that this concept should be changed to inculcate the culture of doing something good for human beings through innovation.No doubt, innovations and new ideas have more risk, but at the same time their success brings more monetary benefits for the innovator and the financier venture capitals.Mamoon said that venture capitals are eager to finance any new ideas, irrespective of any region or country; even if it is beyond any limit of financing. But, the idea must be unique and workable. It should have promising potential to become a reality in 3 to 5 years.He said that only two persons from Pakistan had approached for financing their projects but their idea did not meet the required standard. The idea, which can be ideal for the venture capital for financing should carry in it a potential that it will hit in 3 to 5 years.David, a research fellow at Stanford University, said he firmly believes that the culture of innovations can make a difference in real sense in the future. He also believes that it is the new culture of innovations, which can work good to human beings.David comes from Sweden. He suggests that Pakistan should take full advantage and give importance and priority to innovations-led culture for making great success in today's challenging world.Rehan, Shamas and Mannon Amin, a group of three Pakistani students, is working on the concept of innovation at Stanford University. Rehan and Mannon Amin graduated from 'Lums'--Lahore University of Management Sciences--before joining Stanford University in 2006. They have great urge for doing something good for Pakistan through innovative ideas.They have been working on different projects. They are also closely working with OPEN--an association of overseas Pakistanis--working hard to bring Pakistan into the list of those countries which have great love for innovation, and change the fortune of their countrymen through untraditional ways and means.They have serious reservations about Pakistan's educational system and want that the policy-makers should have a major surgery to make its education worth working in today's highly competitive world.
ARIF RANA
SAN FRANCISCO (October 14 2007): Pakistan has yet to come on the global radar for venture capitalists' financing for the new practicable ideas as it simply misses a link between innovation and a culture to work hard to turn them into a reality.Venture capitals is a fast growing global phenomenon for providing financing to those who conceive innovative ideas for any work and then strive to make a reality. Pakistan by no means is less important for innovation and working on the new ideas, but unfortunately this concept and its importance is not receiving significance it's getting from the rest of the world.The USA and Europe are among the first choice for the people who think differently and attach extraordinary importance to innovative ideas. It's not enough to think great and then conceive sublime ideas. Rather, it is the first step towards making something extraordinary and attract those who believe that it's commitment and urge to do a great job for humankind service.Mamoon, a young Pakistani working with a venture capital, during a meeting with Business Recorder at Stanford University in California, spoke on the concept of innovation and financing procedure of his firm for financing such initiative. .He attached extraordinary importance to innovation to be on board with today's world rightly called as 'age of innovations and new ideas' to make human being lives more comfortable and progressive.His venture capital has so far financed around 400 projects and got encouraging response from those who, instead of following the traditional ways and means, preferred to work on the new ideas. His venture capital provided financing to the projects taken up by Chinese and Indians but none could be picked up from Pakistan.Mamoon terms absence of new ideas and innovations as a major reason of Pakistan's poor performance and wants that this concept should be changed to inculcate the culture of doing something good for human beings through innovation.No doubt, innovations and new ideas have more risk, but at the same time their success brings more monetary benefits for the innovator and the financier venture capitals.Mamoon said that venture capitals are eager to finance any new ideas, irrespective of any region or country; even if it is beyond any limit of financing. But, the idea must be unique and workable. It should have promising potential to become a reality in 3 to 5 years.He said that only two persons from Pakistan had approached for financing their projects but their idea did not meet the required standard. The idea, which can be ideal for the venture capital for financing should carry in it a potential that it will hit in 3 to 5 years.David, a research fellow at Stanford University, said he firmly believes that the culture of innovations can make a difference in real sense in the future. He also believes that it is the new culture of innovations, which can work good to human beings.David comes from Sweden. He suggests that Pakistan should take full advantage and give importance and priority to innovations-led culture for making great success in today's challenging world.Rehan, Shamas and Mannon Amin, a group of three Pakistani students, is working on the concept of innovation at Stanford University. Rehan and Mannon Amin graduated from 'Lums'--Lahore University of Management Sciences--before joining Stanford University in 2006. They have great urge for doing something good for Pakistan through innovative ideas.They have been working on different projects. They are also closely working with OPEN--an association of overseas Pakistanis--working hard to bring Pakistan into the list of those countries which have great love for innovation, and change the fortune of their countrymen through untraditional ways and means.They have serious reservations about Pakistan's educational system and want that the policy-makers should have a major surgery to make its education worth working in today's highly competitive world.
BR: Pakistan far from global venture financing radar
Pakistan far from global venture financing radar
ARIF RANA
SAN FRANCISCO (October 14 2007): Pakistan has yet to come on the global radar for venture capitalists' financing for the new practicable ideas as it simply misses a link between innovation and a culture to work hard to turn them into a reality.Venture capitals is a fast growing global phenomenon for providing financing to those who conceive innovative ideas for any work and then strive to make a reality. Pakistan by no means is less important for innovation and working on the new ideas, but unfortunately this concept and its importance is not receiving significance it's getting from the rest of the world.The USA and Europe are among the first choice for the people who think differently and attach extraordinary importance to innovative ideas. It's not enough to think great and then conceive sublime ideas. Rather, it is the first step towards making something extraordinary and attract those who believe that it's commitment and urge to do a great job for humankind service.Mamoon, a young Pakistani working with a venture capital, during a meeting with Business Recorder at Stanford University in California, spoke on the concept of innovation and financing procedure of his firm for financing such initiative. .He attached extraordinary importance to innovation to be on board with today's world rightly called as 'age of innovations and new ideas' to make human being lives more comfortable and progressive.His venture capital has so far financed around 400 projects and got encouraging response from those who, instead of following the traditional ways and means, preferred to work on the new ideas. His venture capital provided financing to the projects taken up by Chinese and Indians but none could be picked up from Pakistan.Mamoon terms absence of new ideas and innovations as a major reason of Pakistan's poor performance and wants that this concept should be changed to inculcate the culture of doing something good for human beings through innovation.No doubt, innovations and new ideas have more risk, but at the same time their success brings more monetary benefits for the innovator and the financier venture capitals.Mamoon said that venture capitals are eager to finance any new ideas, irrespective of any region or country; even if it is beyond any limit of financing. But, the idea must be unique and workable. It should have promising potential to become a reality in 3 to 5 years.He said that only two persons from Pakistan had approached for financing their projects but their idea did not meet the required standard. The idea, which can be ideal for the venture capital for financing should carry in it a potential that it will hit in 3 to 5 years.David, a research fellow at Stanford University, said he firmly believes that the culture of innovations can make a difference in real sense in the future. He also believes that it is the new culture of innovations, which can work good to human beings.David comes from Sweden. He suggests that Pakistan should take full advantage and give importance and priority to innovations-led culture for making great success in today's challenging world.Rehan, Shamas and Mannon Amin, a group of three Pakistani students, is working on the concept of innovation at Stanford University. Rehan and Mannon Amin graduated from 'Lums'--Lahore University of Management Sciences--before joining Stanford University in 2006. They have great urge for doing something good for Pakistan through innovative ideas.They have been working on different projects. They are also closely working with OPEN--an association of overseas Pakistanis--working hard to bring Pakistan into the list of those countries which have great love for innovation, and change the fortune of their countrymen through untraditional ways and means.They have serious reservations about Pakistan's educational system and want that the policy-makers should have a major surgery to make its education worth working in today's highly competitive world.
ARIF RANA
SAN FRANCISCO (October 14 2007): Pakistan has yet to come on the global radar for venture capitalists' financing for the new practicable ideas as it simply misses a link between innovation and a culture to work hard to turn them into a reality.Venture capitals is a fast growing global phenomenon for providing financing to those who conceive innovative ideas for any work and then strive to make a reality. Pakistan by no means is less important for innovation and working on the new ideas, but unfortunately this concept and its importance is not receiving significance it's getting from the rest of the world.The USA and Europe are among the first choice for the people who think differently and attach extraordinary importance to innovative ideas. It's not enough to think great and then conceive sublime ideas. Rather, it is the first step towards making something extraordinary and attract those who believe that it's commitment and urge to do a great job for humankind service.Mamoon, a young Pakistani working with a venture capital, during a meeting with Business Recorder at Stanford University in California, spoke on the concept of innovation and financing procedure of his firm for financing such initiative. .He attached extraordinary importance to innovation to be on board with today's world rightly called as 'age of innovations and new ideas' to make human being lives more comfortable and progressive.His venture capital has so far financed around 400 projects and got encouraging response from those who, instead of following the traditional ways and means, preferred to work on the new ideas. His venture capital provided financing to the projects taken up by Chinese and Indians but none could be picked up from Pakistan.Mamoon terms absence of new ideas and innovations as a major reason of Pakistan's poor performance and wants that this concept should be changed to inculcate the culture of doing something good for human beings through innovation.No doubt, innovations and new ideas have more risk, but at the same time their success brings more monetary benefits for the innovator and the financier venture capitals.Mamoon said that venture capitals are eager to finance any new ideas, irrespective of any region or country; even if it is beyond any limit of financing. But, the idea must be unique and workable. It should have promising potential to become a reality in 3 to 5 years.He said that only two persons from Pakistan had approached for financing their projects but their idea did not meet the required standard. The idea, which can be ideal for the venture capital for financing should carry in it a potential that it will hit in 3 to 5 years.David, a research fellow at Stanford University, said he firmly believes that the culture of innovations can make a difference in real sense in the future. He also believes that it is the new culture of innovations, which can work good to human beings.David comes from Sweden. He suggests that Pakistan should take full advantage and give importance and priority to innovations-led culture for making great success in today's challenging world.Rehan, Shamas and Mannon Amin, a group of three Pakistani students, is working on the concept of innovation at Stanford University. Rehan and Mannon Amin graduated from 'Lums'--Lahore University of Management Sciences--before joining Stanford University in 2006. They have great urge for doing something good for Pakistan through innovative ideas.They have been working on different projects. They are also closely working with OPEN--an association of overseas Pakistanis--working hard to bring Pakistan into the list of those countries which have great love for innovation, and change the fortune of their countrymen through untraditional ways and means.They have serious reservations about Pakistan's educational system and want that the policy-makers should have a major surgery to make its education worth working in today's highly competitive world.
BR: Greek Company awarded contract for 220 megawatts power plant Phase-I
Greek Company awarded contract for 220 megawatts power plant Phase-I
IQBAL MIRZA
KARACHI (October 14 2007): The Karachi Electric Supply Corporation (KESC) has awarded the contract for Phase-I of the 220 MW power plant to METKA, EPC contractor, a Greek Company of international repute, whereas Phase-II for 565 MW is under process, it is reliably learnt.The General Electric (GE) are the manufacturer of the 220 MW power plant consisting of four GTs of 50 MW each and one steam turbine would add approximately 20 MW. The EPC cost of the project is around 186 million dollars including approximately 11 million dollars for chiller equipment.According to a source in KESC, the bids for new power plant Phase-II of approximately 565 MW are in the process of evaluation and the contract is likely to be finalised shortly. The new power plant project Phase-I and Phase-II would be financed through medium and long-term financing facilities from local and international financial institutions, in addition to equity injection, as under:International Finance Corporation (IFC) 125 million dollars, Asian Development Bank (ADB) 150 million dollars, syndicate of local banks Rs 12,500 million, and equity financing by KES Power and Government of Pakistan through Redeemable Preference Shares (RPS) Rs 6,000 million.These financing arrangements would be utilised in a phased manner according to the requirement of funds for Phase-I and Phase-II of the new power plant. The cost estimate and efficiency level of the new power plant favourably match rather excel the benchmarks set by National Electric Power Regulatory Authority (Nepra) and would as such be approved by Nepra.The evaluation of bids had been carried out in a highly professional manner by the consultants of international repute. The contract with METKA has been legally examined through in-house lawyers as well as external experts on contract laws aiming at safeguarding interest of the Company.The setting up of a new power plant had been one of the top priority areas of the new management from day one and various proposals had been under consideration. Siemens power plant of 830 MW was also evaluated but could not be finalised because of unfavourable delivery schedule. Advance payment of Euro 25 million to Siemens has been refunded except retention money of Euro four million, which would be received back shortly.At the last extraordinary general meeting of KESC Ltd, the Chairman had informed that 75 percent of equity injection through RPS, viz Rs 4.5 billion would be contributed by the new owner. This is in addition to initial investment of 265 million dollars at the time of privatisation of the Company in November 2005.The medium and long-term financing facilities of upto Rs 37 billion being availed from local and international financial institutions were successfully managed with the sponsors' support and guarantee. Insofar as retention of KESC shares by the new owner is concerned it is mandatory for them to hold majority shares in the capital of the Company, following the agreement with Government of Pakistan.The extraordinary general meeting had resolved and approved issuance of additional share capital to IFC and ADB without making a right share. The turn around strategy devised and actively pursued by KESC management with the complete support of major shareholders, is likely to produce improved operational and financial results which would benefit all the stakeholders, especially the minority shareholders during the future years.The subscription of shares by IFC and ADB, the Chairman believed, would send a positive signal to all stakeholders. Some of the benefits that will accrue to KESC would be that the equity investment from multilateral institutions would greatly enhance KESC's image and profile.KESC could draw upon the resources, expertise and best practices from these financial institutions, as they have considerable utility experience in other countries. The services offered by IFC include a tariff rationalisation seminar based on experiences from financing of electric utilities eg in Brazil and India. Besides this a grant of seven to eight million dollars is being provided for financing low-income connection regularisation schemes.Improvement in corporate governance, as these financial institutions will independently assess the KESC operations and will provide feedback for corrective actions, thereby improving the monitoring, financial reporting and evaluation system.The rate offered on the long-term facility has been reduced during the construction phase and for the remaining period this saving in interest cost is considered as a premium paid by IFC/ADB for obtaining the loan to equity conversion option.The estimated saving from reduction in interest rate would be 14.50 million dollars, and estimated saving due to reduction in outstanding balance, assuming option is exercised in 2010 would be 14.00 million dollars. The total savings would thus be 28.50 million dollars.
IQBAL MIRZA
KARACHI (October 14 2007): The Karachi Electric Supply Corporation (KESC) has awarded the contract for Phase-I of the 220 MW power plant to METKA, EPC contractor, a Greek Company of international repute, whereas Phase-II for 565 MW is under process, it is reliably learnt.The General Electric (GE) are the manufacturer of the 220 MW power plant consisting of four GTs of 50 MW each and one steam turbine would add approximately 20 MW. The EPC cost of the project is around 186 million dollars including approximately 11 million dollars for chiller equipment.According to a source in KESC, the bids for new power plant Phase-II of approximately 565 MW are in the process of evaluation and the contract is likely to be finalised shortly. The new power plant project Phase-I and Phase-II would be financed through medium and long-term financing facilities from local and international financial institutions, in addition to equity injection, as under:International Finance Corporation (IFC) 125 million dollars, Asian Development Bank (ADB) 150 million dollars, syndicate of local banks Rs 12,500 million, and equity financing by KES Power and Government of Pakistan through Redeemable Preference Shares (RPS) Rs 6,000 million.These financing arrangements would be utilised in a phased manner according to the requirement of funds for Phase-I and Phase-II of the new power plant. The cost estimate and efficiency level of the new power plant favourably match rather excel the benchmarks set by National Electric Power Regulatory Authority (Nepra) and would as such be approved by Nepra.The evaluation of bids had been carried out in a highly professional manner by the consultants of international repute. The contract with METKA has been legally examined through in-house lawyers as well as external experts on contract laws aiming at safeguarding interest of the Company.The setting up of a new power plant had been one of the top priority areas of the new management from day one and various proposals had been under consideration. Siemens power plant of 830 MW was also evaluated but could not be finalised because of unfavourable delivery schedule. Advance payment of Euro 25 million to Siemens has been refunded except retention money of Euro four million, which would be received back shortly.At the last extraordinary general meeting of KESC Ltd, the Chairman had informed that 75 percent of equity injection through RPS, viz Rs 4.5 billion would be contributed by the new owner. This is in addition to initial investment of 265 million dollars at the time of privatisation of the Company in November 2005.The medium and long-term financing facilities of upto Rs 37 billion being availed from local and international financial institutions were successfully managed with the sponsors' support and guarantee. Insofar as retention of KESC shares by the new owner is concerned it is mandatory for them to hold majority shares in the capital of the Company, following the agreement with Government of Pakistan.The extraordinary general meeting had resolved and approved issuance of additional share capital to IFC and ADB without making a right share. The turn around strategy devised and actively pursued by KESC management with the complete support of major shareholders, is likely to produce improved operational and financial results which would benefit all the stakeholders, especially the minority shareholders during the future years.The subscription of shares by IFC and ADB, the Chairman believed, would send a positive signal to all stakeholders. Some of the benefits that will accrue to KESC would be that the equity investment from multilateral institutions would greatly enhance KESC's image and profile.KESC could draw upon the resources, expertise and best practices from these financial institutions, as they have considerable utility experience in other countries. The services offered by IFC include a tariff rationalisation seminar based on experiences from financing of electric utilities eg in Brazil and India. Besides this a grant of seven to eight million dollars is being provided for financing low-income connection regularisation schemes.Improvement in corporate governance, as these financial institutions will independently assess the KESC operations and will provide feedback for corrective actions, thereby improving the monitoring, financial reporting and evaluation system.The rate offered on the long-term facility has been reduced during the construction phase and for the remaining period this saving in interest cost is considered as a premium paid by IFC/ADB for obtaining the loan to equity conversion option.The estimated saving from reduction in interest rate would be 14.50 million dollars, and estimated saving due to reduction in outstanding balance, assuming option is exercised in 2010 would be 14.00 million dollars. The total savings would thus be 28.50 million dollars.
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