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Sunday, August 10, 2014

Parking in the Developed World

In the US, every store, apartment complex, shopping malls, restaurants and markets have dedicated spots for handicap parking closer to the entrance of the main gate but now another trend is growing, they are also reserving space for charging of Hybrid vehicles with EV terminals.

Karachi Marketing dynamics are different from that of Pakistan

Karachi, the financial capital and the largest city of the country is more complex compared to other Pakistani cities claim a survey on Karachi and Lahore Marketing Dynamics. The pace of life of people living in Karachi is more hurried and people often ignore talking about Politics, survey evaluation concludes. A major reason why Political talk shows are a failure for Karachi audiences and a very successful strategy for audiences outside Karachi is because the working class of people in the city have simply no time to watch the television.

People living in Karachi are more tend towards Societal Marketing rather profitable. Ads or Advertisements that talk about Nature, Recycling, Education, Social issues are a major hit and instantly become popular and talk of the town. Whether it is Dawn's recent introduction of bio-degradable packaging or Hyperstar's move of introducing Environmental Friendly Green bags or Geo television partnering with UN to celebrate International Earth Day.

Another major area of growth in the city in Online Advertising and not television. "The younger generation mostly don't spend much of their time watching television rather they spend most of their time online"  research added. The growth in Online Advertising is evident from Ads on Facebook and Google, the two most popular websites for Online Advertising.

The survey added that Karachi has become a mega hub for people looking for great food, entertainment and shopping. Several new local brand have opened up by leveraging the power of Online Advertising and are doing very successful. "Every fourth teenager that we have surveyed in the research is doing some kind of business through Facebook. Either photography or offering designing skills or some other thing, which is good as Karachi has now more young entrepreneurs".

Though there are some major hurdles that most young entrepreneurs complaint about is the absence of services of websites such as PayPal and Amazon for Pakistani users. Both the websites currently have no presence in Pakistan despite having presence in countries such as Bhutan and Sri Lanka whose total GDP is just the fraction of Pakistan's GDP.

Drive-Through Banking

Banks across the US offers drive-through banking to its customers as a convenience for its quick time crowd. Today, many people withdraw and deposit money using the drive-through window at banks.

The idea of drive-through banking in the US is more than 60 years old when Exchange National Bank of Chicago introduced this concept on November 12, 1946.

Friday, December 27, 2013

Milli Tola Gold for Rs. 50

Pakistan Mercantile Exchange Limited (PMEX), the only commodity futures exchange of Pakistan, launched Milli Tola Gold on December 16, 2013. Milli Tola Gold has been exclusively designed for all types of investors who are seeking a convenient way to buy, sell and accumulate gold with ease and peace of mind. The product allows investors to purchase gold in small amounts, starting from Rs. 50. The gold is stored in PMEX’s vaults and is electronically tradable. In addition, the Milli Tola Gold provides the option of taking physical delivery of gold.

Tameer Microfinance Bank Limited (TMFB) has partnered with PMEX to introduce Milli Tola Gold contracts via their Sarmaya centers to make them available for the masses for which the first transaction was conducted by Mr. Nadeem Hussain (Founder, President and CEO) of Tameer Microfinance Bank at PMEX premises.

PMEX and TMFB had signed a Memorandum of Understanding in March 2013 to offer a gold based product which would give opportunity to all income strata to invest in gold with trust, security and convenience. The product is now available in small lot sizes, which will make it conducive for people to invest in gold with cash flow ease and convenience and save it securely in PMEX’s custody.

Commenting on the occasion, Mr. Ejaz Ali Shah, Managing Director PMEX, said, “We are pleased to add another flagship product in our portfolio, which is aimed at every Pakistani investor. On one hand, it enables every Pakistani to invest in gold to build savings with convenience, security and ease of liquidity. On the other hand, it offers a huge opportunity to PMEX brokers to expand their business by offering services to a much wider market segment. This can be accomplished by cultivating partners having access to the customers like credit cards and telecom companies in order to take this product to every house in Pakistan. PMEX will remain committed towards creating value for all stakeholders in future as well.”

Speaking on the occasion, Mr Nadeem Hussain, Founder, President and CEO, Tameer Micro Finance Bank said, “We are extremely pleased at this ground breaking achievement, the first of its kind in the Pakistani market, which will help create financial inclusion through small savings and investments in gold. We see such initiatives as catalysts to help achieve our vision of creating socio-economic empowerment.” 

Wednesday, September 11, 2013

Best One Retail Model

In my earlier post on Retail Shops in Singapore provide more than just Products, i have highlighted how retail chains such as 7 Eleven are completely dominating the retail sector of countries such as Singapore where it is not just selling products but also associated services like bill payments, mobile top up, tourist SIM, courier services, ticket sales (bus/metro/popular attractions), easy cash advance, online shopping payment and cash withdrawal services. These stores also have an ATM inside and are almost everywhere across the country including some of them just beside each other.

In this post, i want to highlight another example of Best One convenience stores which are based in the UK and Jersey CI. The group has over 600 stores in England and most of these stores are owned on a franchise model while its most of the stock is sourced through Bestway Cash & Carry. The store is also a segment of Bestway Group which is owned by Sir Anwar Pervez who also owns Batleys in UK and United Bank Limited (UBL) in both UK and Pakistan.

Similar to 7 Eleven, Best One provide retailers with retailing support, drop shipments, online ordering, panograms, store design, promotional calendar & free Torex EPOS kits. There are no joining fees, nor any hidden head office surcharges or weekly membership fees. So it's almost a win win proposition for both Best One and the retailer.

In addition to that, the customers don't just get fresh bread, soft drinks, newspapers & magazines, beers & cider, wines & spirits, fresh vegetables, confectionery, household products, frozen foods etc. but also additional services essential to the local community such as Post Office, cash machines, money transfers, mobile phone top ups and National Lottery ticket sales.

With the changing model where the banks, telecom and courier companies are going branch less and focusing more on training the retailers to provide their part of the service, this model is going to be a major success. In Pakistan, banks and telecom companies are already using retailers but the absence of a company such as 7 Eleven and Best One which can provide training to the retailers as well as provide marketing support is really missing. Two other lessons from this model are that our courier companies should also use retailers to grow their business and similarly our banks should use popular retailers to grow their business overseas.

Monday, September 9, 2013

15 Years of Pakistan Capital Market Progress

As I write this article, we see that our domestic capital markets are experiencing a revolutionary era. New standards and milestones are piling on, just as the volume and value of trade at stock exchanges in the country continue to set new records.

Over the past 15 years, the capital markets of Pakistan have witnessed significant development in terms of introduction of high-tech infrastructure, efficient trading mechanisms, proficient processes and comprehensive regulations.

The KSE-100 index has peaked in recent weeks, towering beyond the 21,000 points level. By virtue of this performance, the KSE is today, the top performing market in Asia and among the best performing bourses of the world. Moreover, 14 equity funds from Pakistan made it to the list of the world's 100 top performing equity funds in 2012.

These achievements are harbingers of even greater potential for investments and business growth in the country.

With the regulatory support extended by the Securities and Exchange Commission of Pakistan (SECP), the Central Depository Company (CDC) and the National Clearing Company of Pakistan (NCCPL) have played catalyst roles in this drive for domestic capital markets.

Domestic and foreign investors have been facilitated through the establishment of a number of systems for trading, custody and settlement i.e. the Automated Trading Systems, the Central Depository System (CDS) and the National Clearing and Settlement System (NCSS).

Besides, a new Risk Management Structure (RMS) has also been introduced that includes a new netting regime, a margining system based on value at risk (VAR) and capital adequacy.


Central Depository Company of Pakistan Limited
In early 1990’s, the domestic capital market witnessed phenomenal escalation in trading volumes which resulted in excessive handling of physical securities. The manual handling (physical shares handling and transfer) was becoming time consuming and arduous.

To manage these increasing volumes in a manner that was not only efficient but also time effective, the Central Depository Company of Pakistan Limited was established. The objective was to operate as the central securities depository and to maintain an electronic book entry system.

Under a well-defined legal framework, CDC operates and manages the Central Depository System (CDS) for equity, debt and other financial instruments. The system records, maintains and registers the transfer of securities. It facilitates transfer of ownership of securities without any physical movement or endorsement of certificates or execution of transfer instruments. It also serves to link up the issuers of securities for the purpose of executing corporate actions like disbursement of corporate benefits and carrying out mergers and issuance of rights etc. Similarly, it enables the investors to obtain financing against securities conveniently.

With time the company has grown tremendously where it has carved its role in various other services such as Trustee services for mutual funds, Share registrar services and IT services.

National Clearing Company of Pakistan Limited

As part of efforts to further improve the settlement mechanism in terms of security and efficiency, National Clearing & Settlement System (NCSS) was established to replace the separate and individual clearing houses of Karachi Stock Exchange, Lahore Stock Exchange (LSE) and Islamabad Stock Exchange (ISE) with a centralized entity.

NCCPL became fully operational in 2003-04 and started catering to settlement of all book-entry securities through NCSS which has brought tremendous efficiency in the settlement mechanism and has reduced settlement risk significantly.

CDC played a significant role in the establishment of NCSS and contributed in the areas of need analysis, application development and database management. CDC managed the operations of NCCPL for three years before handing it over to its independent management and continues to liaise with it for all capital market development initiatives.

Unique Identification Number

Unique Identification Number (UIN) system was introduced by National Clearing Company in 2006 to uniquely identify individual investors and institutions with an alpha-numerical code.

This reformation bars passing of any order for sale or purchase of securities without a UIN. The number is assigned to each account holder by the National Clearing and Settlement System (NCSS).

As a result of this initiative, settlement of securities transactions executed on the three stock exchanges in the country is now being performed directly from the respective CDS accounts of investors without manual intervention, thus ensuring complete transparency and straight-through-processing in the market.

Straight-Through Processing

After the implementation of UIN by NCCPL, Straight-Through-Processing (STP) was made possible in the capital market in December 2010 by CDC in collaboration with NCCPL and three stock exchanges to achieve automation in settlement of securities mechanism.

The newly introduced mechanism has brought increased efficiency and transparency in the securities transfer mechanism where the settlement cycles have reduced from T+3 to T+2 and for negotiated deals to T+0.

Under the mechanism, securities are now directly transferred to the target depository custody account based on the UIN of the investors resulting in more transparency and clear audit trail.


Bonds Automated Trading System
Realizing the importance of debt market for helping businesses and the economy to grow, the KSE introduced Bonds Automated Trading System (BATS) to provide issuers with the convenience of liquidity generation through alternative means of raising debt capital.

Stock Index Futures Contract

To deal with the lack of liquidity which has been the biggest challenge for Stock Exchanges in the recent past and for the development of the derivatives segment, Stock Index Futures Contract (SIFC) was launched in 2012. This unique offering provides investors with an opportunity to take composite exposure in top-30 liquid stocks, representing 70 percent of the total market capitalization. It lets individual as well as institutional investor hedge against market volatility.

Issuance of GDR’s, Increase in Market Valuation

The last fifteen years have also witnessed the issuance of Global Depository Receipts (GDR) as well as large-scale mergers and acquisitions.

The Oil & Gas Development Company Limited (OGDCL) and MCB Bank have issued successful GDR offerings amounting to $888 million. These GDR’s are listed at the London Stock Exchange (FTSE) and have received strong interest from investors.

Similarly, several key takeovers have also taken place in Pakistan’s corporate world in the last fifteen years. These include acquisition of Union Bank by Standard Chartered Bank, Citibank Consumer division by Habib Bank Limited, Royal Bank of Scotland (RBS) by Faysal Bank Limited, PICIC Bank by Temasek Singapore, Crescent Commercial Bank by SAMBA, Pak Tel by China Mobile and acquisition of further stake in Lakson Tobacco by Phillip Morris.

Demutualization of the exchanges

To improve governance structure at local exchanges, expand market outreach, attract new investors and improve liquidity which is necessary for technological development and human resource up gradation, the Stock Exchange Demutualization Bill was unanimously passed by the joint sitting of the Parliament on March 27, 2012. The same was enacted into law by the President of Pakistan on May 7, 2012.

Demutualization provides greater balance between the interests of various stakeholders by clear segregation of trading rights and ownership rights. This separation of commercial and regulatory functions has completely transformed the role and identity of the stock exchanges.

As the changes have been devised with the consensus of all stakeholders, they promise greater efficiency, transparency and profitability for the exchanges.

A demutualized stock exchange is in a better position to attract international strategic partners and good quality issuers, increasing the visibility of these exchanges on international capital market forums and facilitating consolidation of brokers leading to financially strong entities.

New regime of CGT Implementation

The SECP as part of its mandate to develop Capital Market in Pakistan forwarded a proposal to the Federal Board of Revenue (FBR) for revamping of CGT (Capital Gains Tax) Regime to facilitate investors with the ease of calculation and documentation.

A new Capital Gain Tax (CGT) regime is now implemented on all the three stock exchanges of the country and rules for the computation of CGT on listed securities have been revised though the promulgation of Finance (Amendment) Ordinance, 2012 effective from April 24, 2012. The National Clearing Company (NCCPL) is now responsible to compute, determine, collect and deposit CGT to FBR.

Growth in Mutual Funds Industry

The mutual funds industry has grown remarkably and has become the most preferred choice of investors as a ‘relatively secure investment option’. Today, these mutual funds have billions of rupees in assets and are not only attracting investors in great numbers but also escalating the settlement volumes, thus benefiting the capital market.

The Federal Government of Pakistan has also taken the initiative for development of private pensions by allowing rebates for investments in approved pension schemes under which investments made in-line with appropriate guidelines issued by SECP are exempted from taxes. Under the voluntary pension scheme, employees as well as employers can make tax-free contribution into the pension funds.


Cultivating Investor Confidence

Investor protection measures taken by market institutions in the past decade have not been enough to stimulate investor confidence in the capital market. Such measures are required to create a level playing field for even the smallest investors.

To explore the real potential of retail investors and cultivate investor confidence, large-scale and joint efforts are required from all stakeholders.

Awareness sessions, information seminars, road shows and trainings need to be conducted on a regular basis to ensure that existing and potential investors become aware of the level of control they have on their investment portfolio.

Informational material needs to be developed and distributed while direct interaction with investors is needed. These efforts should be focused on improving the confidence of potential investors, educating them about investment trends and promoting culture of savings and investment. 

Action against those who were involved in any fraudulent activities will be the most effective step towards rebuilding investor confidence.

Enhancing Market Depth

Creating new and large-volume listings on bourses by privatization of government-owned organizations is the real way towards increasing this depth. Such listings would also attract more individuals to domestic capital market, given the lure of investing into new projects.

For the same purpose, increasing the float by further issuance of government stocks in already listed companies is also needed. A focus of the Pakistani Government on privatization of state-owned assets in the past has provided some fervor to the investors.

Product Development

Introduction of new products catering to the evolving needs of domestic investors is necessary to foster development of capital market and improve investment patterns to create a better investment environment. New product development is necessary to respond to the new technology and changing market conditions and plays a critical role in ensuring capital market's future growth potential. These products must also be suitable to the local needs.


The capital market’s current infrastructure and mechanisms provide strong grounds for a speedy recovery of the economic growth and development of the country.

But before you enter into the stock market, awareness should be your first line of defense against any loss and fraud. There is no such thing as a foolproof way of investing so ultimately it is the investor’s responsibility to keep a stringent check on their securities on a daily basis. 

Sunday, September 8, 2013

Send Money FREE to Pakistan

Pakistanis and Foreign Nationals can remit money to Pakistan for Free with no fees involved. Traditionally, we all have been using services of Western Union and Money Gram to remit money to Pakistan from US and UK and they charge fees depending upon the amount of money in percentage we send.

But now with Pakistan Government's Remittance Initiative, Pakistani nationals living abroad can remit money back to their loved ones in the country for Free. Here is the quick roundup of how you can do it:

1. Through Pakistani Banks
Pakistan Banks such as HBL, UBL and NBP have extensive branch coverage across the world. You can enter in any of their branch, fill in the remittance form and transfer money via them for free. The free service is only available for transactions above USD 100. Transactions below USD 100 are subject to fees.

2. Online
The most hassle free method of sending money to the country is Online. Pak Remit of National Bank of Pakistan (NBP), Click N Remit of UBL and Fast Transfer of HBL offers free money transfers.

You can send money using US internet cheque or credit card using their websites from USA and through any London bank's debit card from UK. The policy remains same which is that the free service is only available for transactions above USD 100 and are subject to fees if they are below USD 100.

Special Announcement
Enjoy perks if you remit Foreign currency to Pakistan equivalent to US$ 2500 to US$ 50,000 per annum. If you do that, you are entitled to receive Foreign Exchange Remittance Card which allows you to get free Issuance and Renewal of Pakistan passport on urgent basis, Get special handling at special Passport Control counters in both arrival and departure lounges of all International Airports in Pakistan, Enjoy duty credit in Pak Rupees as per category of Remittance Card from Rs. 10,000 to Rs. 100,000/- which you can use to utilize the duty credit on seven items with fixed duty i.e. Television, Deep freezer, Refrigerator, Microwave, Cooking range, Washing machine and Air conditioner. For details: http://www.opf.org.pk/fercallowance.aspx

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