Farmers in the dock in water-deficient India

Farmers' wasteful use of water is unsustainable in a country with a fast-growing population and rapidly industrialising economy, says Water Resources Minister Pawan Kumar Bansal.

Agriculture “is going to face tough competitive demands from other sectors”, Bansal told a water management conference in New Delhi recently.

“To feed 17 per cent of the world's population we have only four per cent of the world's water resources,” he warned.

India's overall annual water consumption is expected to almost double from 634 billion cubic metres (BCM) to 1,180 BCM by 2050, according to the Central Water Commission.

The ministry of water resources predicts per capita water availability by 2050 to be less than half 2001 levels.

The concerns coincide with new worries about India's ability to feed itself as another failed monsoon hits crop yields.

Food prices are up about 18 per cent over 12 months and swathes of parched earth in the countryside serve as a stark reminder of how water is inextricably linked to Indian poverty.

Last year's monsoon was the weakest since 1972, which meant the more than 100 million Indian farmers who rely solely on the rains to water their fields were left high and dry.

“What we should do, given the water requirements and demand and supply imbalance, is promote water-saving technologies like sprinklers,” said Usha Tuteja, of the Agricultural Economics Research Centre at Delhi University.

Experts say free water supplies for those farmers lucky enough to live near government irrigation canals and rivers encourages waste and inefficiency.

Many farmers flood their crops, using more water than they need to, and often choose water-intensive crops in areas with low rainfall.

Bansal believes pricing water to reflect its scarcity would deter waste and force farmers to take “the last drop to the last mile.”

But most farmers are reluctant to pay for something they take for granted now, and most Indian farmers are small-scale operators who would be unable to shoulder the cost.

“The policy needs rethinking. Only small and marginal farmers who are below the poverty line should get these inputs for free,” Tuteja said.

Anil Jain, managing director of Jain Irrigation Systems, which sells micro-irrigation systems that use less water, believes his company is part of the solution.

The company sells products that feed water to the roots of crops or the soil directly through small devices such as pipes and valves.

“What farmers are doing today is flooding the entire land,” Jain said. “Our concept is you need not irrigate the land, you need to irrigate the crop and provide water to the root.”

Sprinklers and micro-irrigation techniques such as drip irrigation consume only half of what a farmer would normally spray on crops, and less water means less energy required to pump it out.

Micro-irrigation also reduces the amount of fertilisers and pesticides which contaminate declining groundwater supply through runoff from excessive watering of fields.

It can even increase crop output by 40 per cent, said Jain.

But many farmers are put off by the investment required in drip irrigation technology — around 1,000 US dollars per hectare — though there are government incentives which reimburse half the cost.

Jain believes such technologies will spread slowly across India as water becomes a major national development issue. But “it is going to take decades of work”, he admitted.

Sensex ends firm on strong global cues

The Asian markets held on to their gains and ended near the highs of the day. The Hang Seng gained 408 points (1.9%) to 21,196 and the Nikkei jumped 216 points (2%) to 10,585.

Buying in auto and the banking sectors helped the markets exhibit firmness throughout the trading session. Strong opening of the European bourses also provided a boost to the markets.

However, the markets pared some of its gains towards the end owing to profit taking. The Sensex finally ended at 17,102, up 109 points. The NSE Nifty closed shop at 5,124, up 35 points.

The market breadth was positive, out of 2,946 shares traded, 1,752 advanced and 1,107 declined on the BSE.

Among the sectoral indices, the auto and the bank indexes added 2% and 1%, respectively.

CISF awaits Centre’s clearance to install body scanners in airports

The CISF is incharge of providing security at airports around the country.

The Bureau of Aviation Security and the Central Government have to clear the issues related to install body scanners.

Addressing media here, CISF Director General N R Das said the government and other agencies involved in the process have to take a conscious decision as a lot of ethical issues are involved.

Das also hinted that the body scanner could be made optional on the lines of security arrangements in US.

“This (body scanning) can also be made optional or as secondary scanning. As I came to know through internet that in US it’s a secondary screening, only when frisking personnel expresses suspicion over a particular passenger then only he / she will be made to undergo body scanning,” Das said.

Commenting on the same issue, CISF Additional Director General M S Bali, said the force is studying the technical report of scanners and a conscious decision would be taken very soon.

“Body scanners were installed in one of the terminus in Delhi as experiment. Now we have removed them. We are examining the technical report of these scanners and also consulting the experts in the field,” Bali said.

He also added that a continuous evaluation of body scanning equipments would be conducted by the CISF before installing them.

The CISF has trained 3,000 personnel to operate body scanning machines.

Commenting on security in and around airports Das said the CISF is installing a perimeter security system at all airports to make them intrusion free.

“The steps are being taken to install perimeter security system in place, once it is put in place then the area would be made intrusion free,” Das said.

Das said the CISF has imitated a programme “ Lost and Found,” under this materials of over 13.95 crore has been handed over to the owners or airport authorities.

“In the field of aviation security in the year 2009, the CISF has recovered unattended property worth Rs. 13.95 crore and handed over either to the rightful owners or to the Airport operators,” Das said.

The CISF also put the details of the recovered unattended material on its website so as to inform the passengers about lost properties.

FBR begins drive to take traders in confidence over VAT

Chairman Federal Board of Revenue (FBR) Sohail Ahmed said the Value-Added Tax (VAT) would be imposed only after the approval by the Parliament and National Assembly and after removing the reservations of traders, Geo News reported Sunday.

The FBR chief briefed in detail the traders of Federal B Area Association about the VAT. Earlier, the FBR spokesman and other officials gave elaborate briefing at the SITE office on the VAT.

Sohail said the Parliament has been informed that if they want to enhance the revenues and free the country of the foreign debts, then the only solution is the imposition of the VAT.

He said the VAT is a major means to augment the tax ratio in GDP.

The Board chairman said the a committee with Asrar Rauf as its head has been constituted which would see about settling the traders’ problems.

Alternative, renewable energy policy being prepared

The new policy for alternative and renewable energy (ARE) will replace the existing short-term policy prepared in 2006. It will encompass all alternative and renewable energy sources, strengthen financial mechanisms and expand scope for rural energy services.

The draft of the policy will be discussed at a consultative workshop in Islamabad on Monday. Water and Power Minister Raja Pervez Ashraf will chair the workshop.

The off-grid alternative and renewable energy policy is aimed at providing electricity to villages, settlements and scattered households not connected to the power grid by employing renewable or hybrid technologies.

The qualifying target settlements are those not included in any national or regional grid expansion plan and are located beyond 20km of the existing power grid. The villages and scattered dwellings can be supplied electricity based on renewable sources of energy generation, either by stand-alone or mini-grid systems with an installed generation capacity of less than 5MW.

Technologies under the policy will be addressed to mini-hydel, hybrid systems, solar photo voltic and thermal, mini-wind systems, bio-energy resulting from anaerobic gas digesters, pyrolitic biomass, gasification and co-generation.

According to the policy objectives, Pakistan needs to initiate a sustained, long-term transition towards greater use of ARE — an indigenous, clean and abundant resource whose considerable potential the country has yet to tap meaningfully.

The short-term policy of 2006 was extended to 2009 from its originally stipulated expiry date of June 30, 2008. The policy had potential problems in achieving the renewable source of energy penetration goals.

At least five per cent of the grid-connected installed capacity will be met through alternative and renewable energy by 2030, five per cent of diesel supply will be met through bio-diesel by 2015 and 10 per cent of diesel supply will be met through bio-diesel by 2025.

Pak gets niche in tobacco exporting countries

Pakistan during financial year 2008-09 had earned US$ 11.3 million from the export of tobacco and cigarettes and a carved out a place in the tobacco exporting countries of the world. This was stated by Secretary, Pakistan Tobacco Board (PTB), Noman Bashir while talking to APP here on Saturday. He said that through its research and development efforts has succeeded in enhancing the per hectare yield from 900 kilogram to 2500 kilogram, highest in the Far Eastern countries.

In the past, he said, Pakistan faced a tough competition from other competitors in the international market in terms of quality. However, he said the PTB in a bid to sustain its ability of tobacco export in international market has focused on application of balanced fertilization, deep ploughing, topping at appropriate stage -as these factors contribute a lot towards quality improvement.

Simultaneously, the Tobacco Board, he said also paid attention to improving the existing barn structures by altering the top and bottom ventilators, redesigned flue-pipe setting and ventury type barn furnaces with introduction of hygrometers.

PTB, the secretary said is also alive to the problem of massive deforestation required for curing of tobacco. The Board has successfully conducted many trials on alternative fuel sources including L.P.G, bagass briquettes, risk husk and furnace oil, but the main hurdle in promotion of these alternative sources of fuel was lack of consistent supply. To tackle the problem of deforestation and rising cost of fuel, the PTB, he said is taking keen interest in evolving a strategy encompassing not only the discovery of other alternatives fuel resources, but also taking care of environmental impact besides assessment of consistency in their supply.

Power generation tariff rises by Rs 1.02 per unit

The National Electric Power Regulatory Authority (NEPRA) has increased the cost of electricity generation by Rs 1.02 per unit, calling it a “fuel cost adjustment”, a private TV news channel reported on Saturday. NEPRA has determined the adjustment in fuel cost component on account of fuel price variation for January 2010 for ex-WAPDA distribution companies, which has resulted in a surge in power tariffs. According to a NEPRA notification, consumers will have to pay Rs 0.62 more than the previous adjustment of Rs 0.40. The adjustment of Rs 1.02 will be applicable to all consumer categories, except lifeline consumers of ex-WAPDA distribution companies. daily times monitor

Current rupee-dollar exchange rate

The Pakistan International Airlines (PIA) is likely to seek a freeze on its foreign debt repayment at current rupee-dollar exchange rate to help control accumulated losses, PIA Managing Director Aijaz Haroon told The News on Saturday.

Deprecation of rupee in past two years has swelled the US dollar denominated cost of $1 billion the national flag carrier had borrowed to buy B-777 aircraft, he said.

“Every time rupee depreciates, we have to register billions of rupees of losses,” he said, a day after briefing parliamentarians on financial position of PIA.

“One way to control it is that the government converts our foreign loans in today’s exchange rate and freezes it.”

This will be part of a financial restructuring proposal, which PIA submits to government by mid of next month for adjusting over Rs70 billion of accumulated losses, which have wiped off airline’s equity.

He said it is very unlikely that the government faced with a large fiscal deficit can afford direct equity injection at this point of time.

“But PIA has to be compensated somehow for all the losses which have piled up between 2003 and 2007.”

The proposal, which will be based on future earning projections might also include request for a waver from Civil Aviation Authority (CAA)’s charges, he said.

The PIA has a fleet of 42 aircraft but most of them like Airbus 310s and B-747s need immediate replacement with fuel-efficient airplanes.

Reduction in fuel price and stable exchange rate helped PIA bring down loss to Rs10.77bn in nine months to September 2009 compared with Rs38.4bn it incurred in same period of previous year. It also posted a gross profit after four years.

“Last time PIA had an operating profit was back in Ahmed Saeed’s days,” Haroon said referring to former Pakistan International Airlines MD’s stint till 2004.

“I have asked lawmakers to see only that airline’s liability is settled and we will turn into a profitable organization.”

About the possibility of selling PIA-owned Roosevelt Hotel in New York to pay for past losses, he said it is not the appropriate time to sell a billion-dollar property when real estate market is still recovering in US.

“Besides, what is the point in selling a business which earns PIA $7-8 million annually?”

The PIA has long been criticised as inefficient organization where financial pilferages are rampant. Management is often questioned by National Assembly for unnecessary expenditures.

But Haroon, a B-777 pilot who took office in 2008, says focus has remained on little things like catering service on domestic flights while measures to protect the interest of airline have been ignored.

Over the years, Gulf-based carriers have been allowed to increase flights to Pakistan. Their better service and aircraft have snatched around 80 percent international traffic from PIA.

The national carrier has lobbied successfully in past few years to stop Gulf carriers from expanding operations. But government out rightly rejected a PIA proposal to take some of the frequency back from them, Haroon said.

WEEKLY REVIEW: Uncertainty over CGT’s issue drags KSE 276 points down

Bears dominated most of the trading sessions during the week at the Karachi stock market in the wake of prevailing negative sentiments among investors who responded adversely to the announcement of capital gains tax (CGT) to be imposed on the capital markets from July 1, 2010.

The Karachi Stock Exchange (KSE) 100-share index was down by 276.33 points or 2.79 percent to close at 9,626.29 points as compared to 9,902.62 points of the previous week.

Analysts said other major factor that affected the market’s performance included delayed appointment of the finance minister following resignation by Shaukat Tareen and rising inflationary trend in the country.

The turnover was recorded at 157.22 million shares as against 171.22 million shares of the previous week, reflecting a decline of 8.17 percent.

“The market was flat despite 21-week high foreign buying,” said JS Sec analyst Sana Hanif. “The market ended on a negative note spurred by uncertainties surrounding CGT’s modalities and appointment of the new finance minister.”

Foreign interest in oil and banking sectors alongside recovery in the rupee’s value in the open market eased off investor’s concerns and provided the much-needed boost to the market, she said and added that NBP and UBL result announcements were the key highlights of the week, both posting an earning per share of Rs 16.92 and Rs 8.26, respectively.

The rupee’s appreciation by over Re 1 against the dollar in the open market, mainly on the back of improved foreign reserves (up $430 million to $14.8 billion) eased off investor’s concerns regarding further rupee depreciation, helping the market to recover.

Foreigners remained net buyers in the market, accumulating shares worth $24 million, a 21-week high level. Banks also accumulated shares worth $3.7 million, where companies emerged as net sellers of $15 million.

“Intense selling was witnessed as investors responded to new taxes on capital markets,” said Shahzad Chamdia Sec analyst Ahsan Mehanti. “Investors took positions in oversold blue chips while delay in appointment of finance minister, pending circular debt issue and rising inflationary trend in the economy were the reasons for the negative trend.

Initiative taken to utilise Thar coal reserves

Under the MoU signed at the Chief Minister’s House, Pepco will buy coal to produce 1,200 megawatts of electricity. The SECMC will generate another 1,200MW.

The signing followed a meeting of the Thar Coal Energy Board, which was chaired by Chief Minister Qaim Ali Shah.
The meeting focussed on the exploitation of coal reserves in Thar to overcome the power crisis.

Water and Power Minister Raja Pervez Ashraf, Law Minister Babar Awan, provincial ministers Syed Murad Ali Shah, Jam Mehtab Daher and Asad Ali Shah, and chief secretary Fazlur Rehman attended the meeting.

The chief minister said that Thar coal blocks were being allotted to companies of international repute.

The Thar Coal Energy Board and the government were monitoring the project and incentives were being offered to ensure early production of electricity, he added.

The meeting decided to determine the price of Thar coal and agreed to expedite the passage of a law for the purpose. The appointment of a consultant will be decided at the next meeting.

The meeting was informed that investment proposals had been received from five firms for mining and coordinated power generation in Thar. They are: Global Mining Company of China, Asian Continental Energy of Australia, Al-Tuwairiqi Steel Mills of Saudi Arabia, Taireu Company of South Korea and Ghani Thar Coal Energy.

Dr Samar Mubarak Mund presented a report on the coal gasification project.

The water and power minister said he was confident about the success of the Thar coal project. He said international tenders for the work would be invited soon. Mr Ashraf said the government was determined to make optimum use of the coal reserves.

Law Minister Babar Awan informed the meeting that the project would become operational next year. He said such projects were being run in 50 countries and a major project of this kind was operational in Siberia.

GE's CEO declines bonus for second year

Friday that Chief Executive Jeffrey Immelt did not receive 2009 bonus, the second straight year he gave up extra pay as the industrial and financial conglomerate struggled with one of its worst years on record.

GE's board of directors agreed to Immelt's request not to grant him a bonus even though it concluded he had performed well during a brutal year for the company, according a company filing with the Securities and Exchange Commission. Immelt's last bonus was in 2007 and amounted to US$5.8 million (S$8.11 million).

Last year was painful for GE, which makes everything from kitchen appliances to power plant turbines.

The company's shares fell 80 percent early in 2009 before recovering somewhat. GE lost its top credit rating due to the struggles of its GE Capital lending unit. Immelt and the GE board cut GE's dividend by 68 per cent to conserve cash and decided to take part in a federally backed program to raise debt when credit dried up.

'Jeff recognizes that it was a challenging year in which he had to make some difficult decisions that he is convinced were in the best interests of GE but that can only be assessed over a period longer than the last 18 months,' GE spokeswoman Anne Eisele said, explaining Immelt's decision not to take a bonus.

However, GE did not leave Immelt empty-handed. He was paid a US$3.3 million salary, the same as a year ago, and granted him 150,000 performance share units worth US$1.8 million that will convert to GE stock if the company meets certain financial goals.

GE also gave Immelt 2 million in stock options Thursday worth between US$7 million and US$8 million, though those options do not appear on his 2009 pay package.

Overall, Immelt's 2009 pay fell slightly to about US$5.6 million, from US$5.7 million in 2008. It also fell below the compensation of the four other top GE executives listed on GE's proxy, who all received bonuses.

In a letter to GE shareholders, Immelt said that the 'world has been reset' by the sharp economic decline over the past two years.

GE is in the process of cutting down the size of GE Capital, which once made up half of the company's overall profits but is still saddled by a big number of bad loans.

GE, which is based in Fairfield, Connecticut, has turned to its industrial divisions, which make jet engines, oil and gas drilling equipment and power plant turbines to lead it out of the recession.

It has also reached a deal with cable operator Comcast to eventually sell its majority stake in NBC Universal, which includes the NBC network.

'GE must be an industrial company first,' Immelt wrote.

GE expects that 2010 profits will be roughly flat with the US$11 billion it earned in 2009, which was down 37 per cent from 2008.

The company forecasts a growth in earnings beginning in 2011.

The AP's calculations of total pay includes salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations exclude changes in the present value of pension benefits, and they sometimes differ from totals companies list in the summary compensation table of proxy statements filed with the SEC during the year.

US borrowing saw unexpected rise in January

The central bank said consumer credit rose 2.4% or $5bn (£3.3bn) from December 2009 to a total of $2.45 trillion in the first month of 2010.

It was the first gain after a record 11 straight declines and it was the largest increase since July 2008.

Analysts were expecting a $4.5bn decrease in January following a $4.6bn fall in December.

January's figure was boosted by a $6.62bn, or 5%, increase in credit for car loans.

However, credit card borrowing, which has now fallen for the 16th month in a row, declined by $1.7bn, or 2.3%.

Iceland votes over foreign debts, economy at risk

Despite the consequences of rejecting the standing deal, Icelanders are set to do just that, angry about what they see as harsh repayment terms from Britain and the Netherlands and they are now certain they can get a much better deal.

Voting began at 0900 GMT and first partial results are expected shortly after polls close at 2200 GMT.

"We want to pay our debts, but we want to do it without going bankrupt," said Steinunn Ragnarsdottir, a pianist who voted in Reykjavik City Hall with her two-year-old daughter.

Albert Olafsson, an auditor, said: "It is not fair that Icelandic taxpayers take all the blame for private bankers. This deal is simply not realistic and we can get a better one."

No political parties are backing the "Icesave" accord agreed in late 2009, not even Prime Minister Johanna Sigurdardottir who brokered the deal. She has vowed to stay on after the referendum and said she would not cast a vote in the ballot.

The Icesave debt amounts to more than $15,000 for every one of Iceland's 320,000 people, though most of the money is likely to be raised eventually by the sale of assets of Landsbanki, which operated "Icesave" accounts before folding late in 2008.

Britain and the Netherlands have offered easier terms, so there is no reason for voters to back the old deal.

But the Netherlands linked the negotiations on repayment with Iceland's hopes to join the European Union.

"We have been negotiating with Iceland about the Icesave matter. I assume it will be resolved. This issue will be part of our considerations when deciding about the opening of accession negotiations with Iceland," Foreign Minister Maxime Verhagen said on the sidelines of EU foreign ministers' talks in Spain.

He declined to say whether the Netherlands would block Iceland's EU accession talks or not.

NEW DEAL?

Iceland's Finance Minister Steingrimur Sigfusson said the expected results of the referendum should not be interpreted as Iceland refusing to pay its "Icesave" obligations.

"We will honor our obligations. To maintain anything else is highly dangerous for the economy of this country," he said.

The foreign minister told Reuters on Friday that he expected a new deal "in the next weeks, perhaps sooner," which would limit the economic impact of the ballot.

The economy minister said a several month delay would shave 2-3 points off GDP in 2010, while a deputy central bank chief said the foreign aid was needed by late 2011, when Iceland refinances $1.8 billion in debt.

The ballot gives Icelanders, who have lost 30 percent of their disposable income since 2007, an opportunity to vent anger at Reykjavik bankers and politicians blamed for the meltdown.

In the referendum, Iceland's 230,000 voters will be asked whether to approve a deal on paying money back to Britain and the Netherlands, after they compensated savers in their countries who had lost money in "Icesave" accounts.

Sigurdardottir said Britain and the Netherlands were holding Iceland "hostage" by linking the Icesave issue to Reykjavik receiving the next tranche of aid from the International Monetary Fund. With the cash in its coffers, Iceland would be able to open its borders to capital flows that feed investments.

The Icesave row with the two European Union countries has also rekindled anti-EU sentiment at a time when Brussels has invited Reykjavik to accession talks. Support for membership has been falling and is now opposed by more than half of Icelanders.

The sale of RCN Corp. to private equity firm should have little short-term impact, according to analsyt

David Joyce, a telecommunications industry analyst with Miller Tabak and Co., of New York said the Boston-based buyer procures media and information technology companies -- including Atlantic Broadband in Southwestern Pennsylvania.

“They’re known to be long-term owners of cable companies,” Joyce said. “There is operational logic to them acquiring RCN, because being in the Lehigh Valley dovetails with other operations they have in Pennsylvania, Maryland and Delaware. We’re not expecting any real change.”

The news was both surprising and intriguing to RCN's local competitor, Service Electric. General Manager Jack Capparell said they would be interested in the Lehigh Valley holdings of RCN should Abry Partners decide to sell part of their system that includes customers in Philadelphia, New York City, Boston and Chicago.
“RCN was sold as an entity as opposed to on a system-by-system basis,” Capparell said. “We definitely would have an interest (in RCN’s Lehigh Valley holdings). But again, what Abry does after this remains to be seen. They know where we are.”

GM to reinstate 600 dealerships slated to be cut

NEW YORK -- General Motors Co. will reinstate 661 dealerships it sought to drop from its sales network.

GM executives said Friday that the dealerships - more than half of those seeking to stay with the automaker - will receive letters giving them the option to remain open. GM said it would not have enough time to negotiate with all 1,100 dealerships that appealed the automaker's decision to close them within a four-month window imposed by the federal government.

"By doing this we save a lot of time, energy and dollars," said Jim Bunnell, GM general manager of network support, saying the company wished to avoid a "very large arbitration process."

As part of its restructuring, GM last year told about 2,000 dealerships it would not renew their franchise agreements once they run out in October 2010. But the dealerships have said GM treated them unfairly, and last month Congress passed a law requiring an appeals process for the dealers.

GM's decision to keep the additional showrooms open effectively shrinks the number of appeals it has to contend with. Arbitration hearings for the dealers who didn't get offers but still want to stay with GM will begin later this month.

The cuts to GM's 6,000-dealer network were designed to compensate for much lower demand for cars and trucks, but some dealers have argued that lots that are still profitable are at risk, and that the automaker hasn't offered enough details about how it's choosing which businesses to shutter.

China opposes political interference in yuan policy

China said Saturday it was opposed to political interference in its exchange rate mechanism, amid growing international pressure for policymakers to let the yuan appreciate.

"Sometimes, the exchange rate issue can be politicised. We are opposed to this practice," central bank governor Zhou Xiaochuan told reporters on the second day of the National People's Congress, the annual parliamentary session.

The value of the Chinese currency, which has effectively been pegged to the US dollar since mid-2008, has been a bone of contention between Beijing and its Western trading partners, which say it is kept low to boost exports.

China has said maintaining a stable currency is a "top priority" and is needed for the survival of Chinese companies and jobs growth in the world's third-largest economy, as export markets slowly recover from the crisis.

But as the nation powers out of the global crisis -- its economy grew by 10.7 percent in the fourth quarter of 2009 after a massive public spending programme -- there is a growing clamour for the value of the yuan to appreciate.

Defending the controversial exchange rate policy, Zhou said China faced "many uncertainties" and the timing of a return to "normal" policies was a complex issue.

"Although we have seen signs of recovery the impact of the financial crisis is still very keenly felt," Zhou said.

"Sooner or later we will withdraw economic stimulus policies (but) we need to be cautious in choosing the timing of the exit."

UCO Bank board meeting March 19 on fund raising

The UCO Bank board will meet March 19 to decide on raising funds through either a qualified institutional placement (QIP) or a follow-on public offer (FPO), a top bank official said here Tuesday.

‘We may go for either FPO or a QIP. The board will take a call on which route to take at its meeting scheduled for Mar 19,’ chairman-cum-managing director S.K. Goel told IANS.

Goel said before the board meeting, he would meet a select group of the bank’s shareholders to elicit their views on the fund raising options.

If the board decides on the QIP route, the government’s approval would be sought, he said.

Meanwhile, a shareholders meeting was held Tuesday to get approval for a FPO of 60 million shares through the book building process that the government had given the nod for on Jan 19.

The bank expects a fund infusion of about Rs.750 crore by the government ‘any time soon’ in the form of perpetual non-culmulative preference shares, Goel said.

Oil advances to $79

World oil prices rose on Tuesday to strike 79 dollars per barrel but traders said the strong dollar would likely keep a lid on the crude market.

New York's main futures contract, light sweet crude for April delivery, won 30 cents to 79.00 dollars per barrel.

It had hit an intra-day high of 80.62 dollars on Monday, the highest level since mid-January.

Elsewhere on Tuesday, London's Brent North Sea crude for April was up 43 cents at 77.32 dollars a barrel.

"This week is very busy data-wise and volatility is likely to remain elevated, while the market continues to track the euro/dollar rate," said VTB Capital analyst Andrey Kryuchenkov.

In foreign exchange trade, the euro slumped to its lowest level in more than nine months against the dollar on Tuesday as the shared eurozone currency was plagued by concerns about the Greek debt crisis.

A stronger greenback usually hurts demand for dollar-priced oil because it becomes more expensive for buyers using weaker currencies.

In London morning deals, the European single currency tumbled to 1.3436 dollars, reaching a level last seen on May 18, 2009. It later recovered slightly to 1.3495 dollars, down from 1.3556 in New York late on Monday.

A warning by the European Union's financial official Olli Rehn that Greece must act fast and step up measures to slash its public deficit ahead of a key deadline in two weeks soured investor sentiment towards the euro, dealers said.

Concerns that debt problems in Greece will spread to the rest of the eurozone have been weighing on the single currency.

On Monday, crude oil retreated on the back of the strong dollar and disappointing US manufacturing data, after surging to the highest level in 18 months following last week's better-than-expected US economic growth numbers.

The rebounding US manufacturing sector grew for the seventh consecutive month in February but at a slower clip than expected, according to a industry survey published Monday.

The Institute for Supply Management said its manufacturing index, also known as the purchasing managers index, slowed to 56.5 percent in February, from 58.4 percent in January. Any number above 50 percent indicates growth.

The figure was slightly lower than the 58.0 percent expected by most market watchers.

"Oil pulled back from the 80-dollar level as traders mulled over mixed signals over the strength of the US economy," said ODL analyst Marius Paun.

"Yesterday's manufacturing numbers showed output rose for a seventh straight month, albeit it fell short of expectations."

Meanwhile on Wednesday, the US Department of Energy will release its weekly inventories report, which will be closely-watched for clues on demand in the world's largest energy consumer.

Revision of ATT urged for benefit of industry

At a meeting of National Engineering Exports Development Strategy (Needs) held on Monday, the representatives of the engineering sector said that smuggling of goods from Afghanistan was damaging the local industry and causing deterioration of engineering base in the country. It was observed that Pakistan needed to protect its industrial base to enhance exports and reduce dependence on imports.

The meeting decided that government should identify procedural issues in ATT and proposed measures for making the trade with Afghanistan more transparent.

It was also recommended to undertake collective efforts by involving commercial counsellors and TDAP for support in marketing, including warehousing, and brand development.

The meeting observed that Pakistan can benefit from export of light engineering to Afghanistan, but the procedure and processes were highly complicated.

SBP injects Rs96bn to ease liquidity crunch

The fears of rising inflation forced the central bank to continue tightening the money supply, which had slipped last week to 4.8 per cent, while it raised the T-bills rates consequently for the second time in the previous auction.

The State Bank reported that the federal government borrowed Rs187 billion from the scheduled banks during the July-February 2009-10, which the bankers said was a record for the decade. The government borrowing from the State Bank shrank to just Rs76 billion as against Rs318 billion in the same period last year.

The country’s economy last year grew by just two per cent and the private sector operated at its minimum level. The situation has yet not changed as the credit off-take by the private sector during the July-Feb was even lower than the last year’s figure.

The State Bank and the government are now claiming that the economy has started recovering and a growth rate of 3.3 per cent is achievable.

Analysts were of the view that 13.7 per cent inflation in January 2010 made the State Bank upset and it decided to further tighten the monetary system, which means flow of money became costlier while the liquidity of banks’ were attracted through increasing return on treasury bills.

The State Bank reported on Monday that the banks invested Rs298 billion in treasury bills since July 2009 to date.

“The trend of money flow has not changed. Banks still investing in treasury bills while the depositors have grossly invested in National Savings Schemes to get much higher return than the commercial banks,” said Abid Saleem, a research analyst, adding that banks are facing a ‘planned liquidity shortage.’

Banker said the private sector credit off-take which picked up in second quarter of the current fiscal year may restrict to a level achieved last year when the economy performed for the lowest rate of growth.

“Hopes are high but things are not clear that the country could achieve a better growth rate. We can only rely on agriculture growth for higher GDP since the large-scale manufacturing (LSM) data is not impressive,” said Abid.