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GE exploring industrial gas engine business sale

NEW YORK (Reuters): General Electric Co (GE.N) is exploring a sale of its industrial gas engine business that could be worth as much as $2 billion, according to people familiar with the matter.

The move comes after Chief Executive Officer John Flannery, who took over as CEO last summer, indicated to analysts and investors for the first time last month that he was open to breaking up the company and said that a spinoff of any of its units, which include power, healthcare and aviation, was a possibility.

Divesting the industrial gas engine business, which includes the Jenbacher and Waukesha engines, would help streamline GE’s power division, whose profit plunged 45 percent last year as sales of power plants and services fell sharply.

GE has hired Citigroup Inc (C.N) to prepare a sale process for the industrial gas business, the sources said on Friday. The sources asked not to be identified because the matter is confidential.

A GE spokeswoman declined to comment, while a Citigroup spokesman did not immediately respond to a request for comment.

General Electric Chief Executive Officer John Flannery presents the company’s new strategy and financial targets to investors at a meeting in New York, U.S., November 13, 2017. REUTERS/Alwyn Scott

The unit for sale makes multi-ton gas turbines that generate on-site power to keep industrial plants running. Jenbacher and Waukesha engines cover the small to mid-sized segment of GE’s power business, ranging from 100 kilowatts to 10 megawatts.

Flannery said last November that GE would exit at least $20 billion in operations, as it tries to shore up its financial performance.

As part of this review, GE is exploring options for its transportation unit, which makes railway locomotives; its iconic lighting division, which makes bulbs for consumers; and its healthcare information technology business.

The company’s stock has lost half its value in the last 12 months and Flannery is under pressure from investors, including activist hedge fund Trian Fund Management LP which sits on its board of directors, to turn the business around.

GE disclosed last month that the U.S. Securities and Exchange Commission is investigating its accounting for part of its services backlog, and a set of actuarial calculations that caused GE to take a charge for long-term-care policies it underwrote a decade ago.

GE took a $6.2 billion after-tax charge on those policies in the fourth quarter and said it will set aside $15 billion more in reserves over the next seven years to cover potential claims on the policies.

Earlier this week, GE said it had reached a deal to sell parts of its overseas lighting business to a company controlled by former executive Joerg Bauer for an undisclosed amount.

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MCB Bank announces financial results 2017

F.P. Report

LAHORE: The Board of Directors of MCB Bank Limited, met under the Chairmanship of Mian Mohammad Mansha on Thursday to review the performance of the Bank and approve the financial statements for the year ended December 31, 2017.

During the year 2017, the Bank completed merger of NIB Bank Limited with and into MCB Bank Limited. The synergies from the merger were reflected in the financial numbers in NPL recoveries and deferred tax adjustment. On the financial performance side, MCB Bank Limited reported Profit Before Tax (PBT) of Rs. 31.01 billion and Profit After Tax (PAT) of Rs. 22.46 billion. In comparison with the last year, Profit Before Tax has decreased by 14.03% whereas Profit After Tax has increased by 2.59% on account of reversal of prior year tax charges. Net markup income of the Bank was reported at Rs. 42.41 billion, down by 3.21% over last year owing to the maturity of high yielding bonds and low-interest rate environment. On the gross markup income side, the Bank reported an increase of Rs. 6.69 billion whereas on the interest expense side, the Bank registered an increase of Rs. 8.09 billion over last year. To supplement its net interest margins, the Bank remained focused on increasing its low cost deposit base and venture in higher yielding assets.

On the non-markup income front, the Bank reported a base of Rs. 17.96 billion with the growth of 11% over last year despite significant capital market volatility in later half of the year. Major contributions to non-markup income growth were operational in nature with fees & commissions increasing by 22.44% YoY and income from dealing in foreign currencies increasing by 42.93% YoY.

The administrative expense base (excluding pension fund reversal) recorded an increase of 23.62% over last year mainly on account of amalgamation of NIB Bank Limited (NIB) with and into MCB Bank Limited. On the provision against advances front, the Bank continued with its recovery trajectory and posted a significant reversal of Rs. 2.90 billion. Based on the volatility in the equity markets, net impairment on equity investments was recorded to the tune of Rs. 3.57 billion.

The total asset base of the Bank on a standalone basis was reported at Rs. 1.33 trillion reflecting a healthy increase of 26.19% over December 2016. Analysis of the asset mix highlights that net investments have increased by Rs. 101.04 billion (+18.17%) with net advances increasing by Rs. 121.24 billion (+34.83%) over December 31, 2016. The coverage and infection ratios of the Bank were reported at 93.74% and 9.47% respectively.

On the liabilities side, the deposit base of the Bank registered a splendid increase of Rs. 187.05 billion (+23.94%) over December 2016, including Rs. 61 billion contribution from Ex-NIB Bank Limited. The significant increase in deposits resulted in MCB achieving an all-time high deposit base of Rs. 968 billion on standalone basis with deposits crossing Rs. 1 trillion mark on consolidated basis. MCB Bank Limited continued to enjoy one of the highest CASA mixes in the banking industry of 92.86% with current deposits increasing by 27% and savings deposits by 19% over December 2016. Strategic focus on current accounts resulted in increase in concentration level to 38.94% of the total deposit base. Earnings per share (EPS) for the year was Rs. 19.56 as compared to Rs. 19.67 for 2016. Return on Assets and Return on Equity were reported at 1.89% and 17.65% respectively, whereas book value per share stood at Rs. 115.18.

The Bank remained a well-capitalized institution with a capital base well above the regulatory limits and Basel capital requirements. While complying with the regulatory capital requirements, the Bank has the highest cash dividend per share in the industry with regular interim dividends and remains one of the prime stocks traded in the Pakistani equity markets reflected by the highest market capitalization in the financial institution category as at December 31, 2017. Bank’s total Capital Adequacy Ratio is 16.44% against the requirement of 11.275% (including capital conservation buffer of 1.275%). Quality of the capital is evident from Bank’s Common Equity Tier-1 (CET1) to total risk weighted assets ratio which comes to 14.42% against the requirement of 6.00%. Bank’s well capitalization also resulted in a leverage ratio of 7.67% which is well above the regulatory limit of 3.0%. The Bank reported Liquidity Coverage Ratio (LCR) of 194.13% and Net Stable Funding Ratio (NSFR) of 128.80% against requirement of 90% and 100% respectively.

The Bank enjoys highest local credit ratings of AAA / A1+ categories for long term and short term respectively, based on PACRA notification dated June 19, 2017. Moreover, TFC rating of MCB Bank Limited (Ex-NIB) has been upgraded from A+ to AAA, based on the notification from PACRA dated October 06, 2017.

The Bank has filed a petition in the Honorable Lahore High Court for demerger of 90 branches from MCB and its merger into wholly owned subsidiary MCB Islamic Bank Limited.

The Board of Directors declared final cash dividend of Rs. 4.0 per share for the year ended December 31, 2017 which is in addition to Rs. 12.0 per share interim dividends already paid to shareholders.


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PFC team to participate in Business Forum UK

F.P. Report

LAHORE: Pakistan Furniture Council (PFC) will send a high powered furniture producers delegation to UK to participate in Commonwealth Business Forum 2018 being organized by Commonwealth Enterprises and Investment Council (CWEIC) from 16 to 18 April on the sidelines of Commonwealth Heads of Government Meeting (CHOGM).

Chairing a meeting of board of directors here on Thursday, PFC Chief Mian Kashif Ashfaq said Pakistan attaches great importance to its relations with the Commonwealth being one of the founding members. “It is high time we begin to explore the opportunities that the Commonwealth can help to unlock, the intra Commonwealth trade potential, especially post-Brexit.” he added.

“To reap the benefits of our common heritage we need to capitalise on the Commonwealth’s trade advantage. The intra-Commonwealth trade advantage which currently stands at 19 percent has the potential to be enhanced a great deal,” adding he said in this regard, PFC business tour would provide a chance to explore new avenues by sharing vision, expertise for formulation of future policies, economic studies, sectoral and project specific reports besides promotional efforts.

The delegation would have one on one direct interaction with foreign business leaders, researchers and investors in European countries, he said adding the tour would enable investors to identify potential organizations to partner and developing successful regional economic strategies and support regionally vital businesses. He was of the view that economic and trade relations between Pakistan and Commonwealth countries possess great potential and there was dire need for Pakistani business community to focus on improving their competitiveness in the commonwealth markets.

Mian Kashif said at present, the trade between Pakistan and Commonwealth has crossed US$ 10 billions with exports volume US$ 4.3 billions and import volume is more than US$ 6 billions.

The Commonwealth Business Forum – integral part of the Commonwealth Heads of Government Meeting – convenes business leaders, industry experts and senior government representatives to discuss the issues and challenges confronting with their countries in 2018 and beyond.

“It is expected that this event will be attended by up to 30 Heads of Government of Member States and 800 Businessmen from all members nations,” he added.

Commonwealth is a diverse community of 52 countries which represent 20 percent of world area and spread over Asia, Europe, America, Africa, Caribbean and Pacific region. Commonwealth accounts 30 percent of world population (2.4 billion) and 14 percent of World Gross Domestic Product (GDP) with per capita average income US$ 4,500. All member countries of Commonwealth are members of WTO and enjoy the advantage of having shared legal systems, languages and values, making it easier for them to communicate trade and cooperate with one another.

The delegation will be led by PFC Chief Executive Mian Kashif Ashfaq and will have the opportunity to meet and interact with the Heads of Commonwealth Community and expand their business relations with their counterparts.


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F.P. Report

LAHORE: Pak-China Joint Chamber of Commerce and Industry (PCJCCI) is endeavoring to develop industry-academia linkages between Pakistan and China to uplift the local industries at par with international standards.

We also want to produce expert human resource for the country, said SM Naveed, President PCJCCI, during an MoU signing ceremony with NUR International University for joint collaboration to advance research standards by initiating faculty and student exchange programs.

The MoU was signed by SM Naveed, President PCJCCI, and Dr Zafar Iqbal Qureshi, Chairman Board of Governors, NIU. While Salahuddin Hanif, Secretary-General PCJCCI, and Dr Rakhshanda Rehman, Vice Chancellor, NIU, Prof Dr Ijaz Ahmad, Pro Vice-Chancellor, NIU, Prof Dr Babar Aziz, Dean, NIU and Ali Khan, Director Strategy and Operations, and various dignitaries from research and industry sector were also present during the ceremony.

SM Naveed in his address, stressed the need to align manufacturing concerns with latest knowledge and technology. He informed that the purpose of initiating this venture was to indulge young professionals and students for addressing key challenges faced by industry through training sessions from Chinese Industrialists, researchers, and experts.

The MoU will facilitate both organizations to produce globally competitive, skilled, market-oriented graduates who can cater to the needs of the China-Pakistan Economic Corridor, added SM Naveed.

Dr Zafar Iqbal Qureshi, Chairman Board of Governors, NIU extended his gratitude towards the members of PCJCCI for their support and efforts in bringing this concept to reality.

While highlighting the focus areas of this memorandum, he mentioned that this signing of the MoU is not merely intended to promote organizations but to reap fruitful results for the prosperity of both countries.


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SAARC Chamber team to participate in BLC

F.P. Report

LAHORE: A high level delegation of SAARC Chamber Pakistan chapter will participate in the forthcoming 3-days “6th SAARC Business Leaders Conclave” being held from March 16 at Kathmandu, Nepal to explore the investment avenues and promote trade among member countries.

Chairing a meeting of the SAARC Chamber Pakistan chapter here Thursday, its Vice President, Iftikhar Ali Malik told the participants that this mega event will bring together the region’s economic and business thinkers, doers and change makers on a one common platform to discuss, debate and evolve solutions and generate opportunities to take South Asia on the path of shared prosperity through economic integration. He said that event will also feature interactive discussion and deliberations between torchbearers and influential leaders of South Asian economy.

He further said that they would bring the issue of reduction of their respective sensitive lists under discussion so that volume of trade would be increased manifold times under SAFTA in South Asian region. He said Pakistan under the dynamic leadership of Prime Minister Shahid Khaqan Abbasi would continue its work for boosting trade in the region and would remove all hurdles in the way of free trade. He further said that Pakistan is keen to increase trade activities with other countries. He added that SAARC countries would have to work jointly for the elimination of poverty, peace and prosperity, for which trade among SAARC countries is essential.

Malik disclosed that nearly 55% of the total potential for intra-regional trade in South Asia has not been exploited. “South Asia desperately needs to negotiate at collective multilateral trading forums, using the regional forum of Saarc to advance its economic and social growth and enhance human development.”

He said at a modest 6% of total trade, intraregional trade in South Asia stands at less than one third of its full potential. Trade barriers, inadequate infrastructure and a lack of political commitment to finding common solutions to support cross-border commercial activity have cost South Asia over US $54 billion per year in lost export opportunities.

He added that despite huge indigenous and plenty of natural resources and mineral deposits, the state of intra-region trade in South Asia is highly miserable. “Two major players of South Asia possess great economic potential and enhanced trade relations could bring them closer together provided all core issues confronting the states were settled amicably through peaceful and result oriented parleys.”

Iftikhar Ali Malik said that theme of the conclave is “Unleashing Shared Prosperity through Economic Integrity”. He said that conclave is truly the only podium that articulates and speaks of voices of private sector to the public sector in the region. Over, 500 leading business leaders, eminent international experts and distinguished dignitaries from private and public sectors will grace the occasion to be chaired by SAARC Chamber President Suraj Vaidya. He said even will also include “SAARC Bazar” “Threads of Hope-Fashion Show” and “Music Beyond Borders”.

Prominent among participants of the meeting were Zubair Ahmad Malik, Sheharyar Ali Malik,Sohial Hussain, Pervaiz Lala, Ms Hina Saeed, Secretary General, Zulfiqa Ali Butt, Deputy Secretary General, Mian Muhammad Kashif Ashfaq, Chairman SAARC Media Council Dr. Waqar Ch and Muzaffar Ali Sial.

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SECP holds seminar

F.P. Report

ISLAMABAD: In order to take forward its campaign of corporatization, the Securities and Exchange Commission of Pakistan (SECP), organized an awareness seminar on ‘formation of companies under the Companies Act, 2017’ on Thursday. It was held in collaboration with the Lahore Tax Bar Association.

A large number of lawyers, accountants and corporate consultants attended the seminar. Mr. Liaqat Ali Dolla, Additional Registrar, SECP’s Company Registration Office, Lahore highlighted the importance of corporatization and corporate compliance. He highlighted the measures taken by the SECP for increase in corporatization and corporate compliance and encouraged feedback from the participants for making the SECP s existing services more efficient. Mr. Shahbaz Sarwar, Additional Registrar, gave a brief presentation on e-incorporation, Companies (Incorporation) Regulations, 2017, and relevant provisions of the Companies Act, 2017.

Chaudhary Qamar uz Zaman, president, Lahore Tax Bar Association, appreciated the SECP’s contribution in the development of corporate sector and expressed an interest in holding these seminars on a regular basis. He proposed that such interaction with stakeholders would be a regular feature.

Dolla said that being the apex regulator of corporate sector, the SECP has always collaborated with the professional and trade bodies, and plans to conduct more seminars and workshops in collaboration with other professional and trade bodies as well in the near future.

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Branchless Banking accounts number reaches record 33m

ISLAMABAD (APP): The number of Branchless Banking (BB) accounts has surged to 33 million by September 2017, exhibiting a positive trend during last one year. The three month period from July to September, 2017 saw a record increase of 5.7 million accounts.

The rise in BB accounts is exhibiting a steeper trend since June 2016 due to the creation of an enabling environment by central bank and vibrant role of BB players in facilitating account opening process through biometric devices at agent locations and remote account opening options.

As per statistics, 25.6 million male and 7.3 million female accounts make up all the BB accounts.

Sindh represents the highest share of female BB accounts with 25 per cent, followed by Punjab, Khyber Pakhtunkhwa and Gilgit Baltistan.

The BB accounts witnessed a 29 per cent increase in female accounts as compared to 19 per cent increase in male accounts in said quarter – a positive sign in gender inclusion.

However, this phenomenon was mainly noticed in Punjab, whereas other provinces experienced higher growth in male accounts than female accounts.

The significant rise in BB accounts and limited share of active accounts exhibits the fact that the BB platform is attracting more people, however, it still needs to provide value-added services for generation of activity in the accounts.

It is high time for the industry to offer innovative and tailor-made products for different segments of the society to generate activity in the accounts and to transform the existing cash-based payments streams to digital channel in order to pave a way for the establishment of a Cash-Lite society.

House Financing is also improving in Pakistan.

During the period of July to September, the agent network grew by 17,397, bringing the aggregate number of shared agents to 420,107. However, active agents declined by 3,920 in number, reaching 181,377 agents.

The account opening capability of the BB agents declined from 28.6 to 26 per cent. On the other hand, the record growth in accounts supports the fact that the customers are more inclined towards self-assisted mode of opening accounts i.e. through the remote mode.

A total of Rs. 30.6 billion were disbursed through the branchless banking channels on account of social welfare payments.

The social welfare payments were led by BISP (72 per cent) with disbursements worth Rs. 22 billion, followed by EOBI pension and Pakistan Bait-ul-Maal payments worth Rs. 6 billion and 1.3 billion respectively.

The adjustment in social welfare payments also resulted in a decline in BB deposits, which decreased from Rs. 15.4 billion to Rs. 11.2 billion.

A total of 164.7 million transactions, worth Rs. 726.4 billion, were conducted during the Jul-Sep 2017 quarter.

The Customer Oriented transactions contributed 96.9 per cent and 63.5 per cent in volume and value of BB transactions respectively, whereas the remaining were agent transactions for liquidity purpose.

The customer oriented transactions are further divided into Over The Counter-OTC and mobile-wallet transactions. The mobile-wallets transactions, in terms of volume and value, remained 104.8 million and Rs. 246.4 billion, contributing a share 65.7 per cent and 55.4 per cent respectively.


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Current account gap at 7.7b in Dec 2017 in Turkey

Monitoring Desk

ANKARA: Turkey ran a current account deficit of $7.7 billion in December 2017, according to the Turkish Central Bank on Wednesday. Data showed that annual deficit reached $47.1 billion in 2017.

“This development in the current account is mainly attributable to $3.2 million increase in the goods deficit, recording net outflow of $7.4 million, as well as $231 million increase in primary income deficit to $1.2 million,” it said.

The median of analysts’ forecasts surveyed by Anadolu Agency’s Finance Desk on Friday was $7.3 billion for the month, while the year-end overall current account forecast stood at $46.7 billion.

Travel, a major item under services, recorded a net inflow of $780 million, increasing by $80 million compared with the same month of the previous year, the bank added.

Turkey’s current account gap in December 2016 was $4.36 billion with a 12-month rolling deficit of $33.1 billion, according to the Turkish Central Bank’s revised data.

Muammer Komurcuoglu, economist at IS Investment, told Anadolu Agency the rise in the 12-month rolling deficit — nearly $14 billion — mainly was driven by energy and gold imports.

“This widening is related to energy and gold imports, which added $8.9B and $11.8B deficit, respectively,” Komurcuoglu said.

Highlighting that core deficit [excluding gold and energy] shrinked by $6.7B he said: “It is good news to see a narrowing in core deficit in a high-growth year,”

Komurcuoglu said strong external demand, especially from EU countries and recovery in tourism revenues would positively effect current account deficit to narrow in 2018.

“Putting all these, we expect a moderate narrowing in the year-end overall current account deficit to reach at $45B [5 of GDP] in 2018.” he added. AA


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Bank AL Habib declares pre-tax profit of Rs.14.04b

F.P. Report

KARACHI: The Board of Directors of Bank AL Habib Limited (the Bank) announced the financial results of the Bank for the year ended December 31, 2017. As per the results, the Bank continued its growth momentum even in the backdrop of low interest rate scenario and declared the pre-tax profit of Rs. 14.04 billion for the year ended December 31, 2017 as compared to Rs. 13.16 billion for the corresponding year showing a growth of 6.69 percent. Profit after tax for the year was recorded at Rs. 8.65 billion against Rs. 8.12 billion for the corresponding year showing a growth of 6.53 percent. Earnings per Share (EPS) of the Bank were recorded at Rs. 7.78 per share.

The Bank’s total asset base increased by 22.31 percent, compared to last year and reached to Rs. 919.05 billion. The Bank’s loan book expanded significantly, standing at Rs. 339.83 billion as on December 31, 2017, showing an impressive growth of 30.00 percent in net advances, compared to the previous year end. Advances to Deposits Ratio (ADR) of the Bank now stands at 49.07 percent.

Prudent financing strategies and sound risk management policies of the Bank resulted in decrease in non-performing to gross advances ratio to 1.52 percent as at December 31, 2017 as against 2.12 percent as on December 31, 2016. Coverage ratio of Non-Performing Loans is also improved to 144.32 percent as at December 31, 2017 from 136.95 percent in December 31, 2016.

The Bank continues to mobilize low cost deposits through strong relationship management, customer centric approach and increasing reach to costumers. Accordingly, the Bank has opened 45 new branches resulting in increase in deposits by 18.56 percent as compared to corresponding year. The Bank deposits have reached at Rs. 692.58 billion, as on December 31, 2017. The Bank’s branch network has reached to 650 branches/ sub branches having coverage in 238 cities of Pakistan and 3 branches and 3 representative office outside Pakistan. In line with the Bank’s vision to provide convenience to customers, the Bank is operating the network of 730 ATMs across Pakistan.

During the year, the Bank has received “Top 25 Companies award “ from Pakistan Stock Exchange, “Leading Partner Bank in Pakistan 2017 award” from Asian Development Bank(ADB)- Trade Finance Program (TFP) and ‘Best Bank of the Year award of 2016 (Mid-Size Banks)’ by Chartered Financial Analyst Society(CFA) for the fifth time. These awards recognize the Bank’s strength, liquidity and sustainability in these challenging times.

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UK’s trade team to identify infrastructure opportunities

F.P. Report

ISLAMABAD: The Prime Minister’s Trade Envoy to Pakistan Rehman Chishti MP led a delegation of six senior business representatives from the UK’s financial, legal and professional services sector to discuss UK commercial participation in infrastructure projects in Pakistan.

Some of the UK’s leading companies took part in the delegation which was led by the Prime Minister’s Trade Envoy to Pakistan Rehman Chishti MP. They were joined by CDC Group plc, the development finance institution owned by the UK government, which is actively looking at investment opportunities in Pakistan.

The visit to Standard Chartered was a part of a three-day visit, three city visit to Karachi, Lahore and Islamabad to meet with ministers, senior government officials and businesses.

The delegation in Karachi was hosted by Shazad Dada, Chief Executive Officer, Standard Chartered Pakistan at the Bank’s Head office over lunch. The mission and the delegates discussed various forthcoming infrastructure projects, investment opportunities and how UK companies can play a greater role in the development of Pakistan’s infrastructure.

Commenting on the visit, Shazad Dada, Chief Executive Officer, Standard Chartered Pakistan said, “The Bank has a positive view on Pakistan’s economy and believes the country offers huge investment opportunities and is open for business. There are tremendous infrastructure opportunities for UK businesses in Pakistan in the wake of the China Pakistan Economic Corridor (CPEC) once the economic zones are established. Pakistan is a key trading partner of UK and with the implementation of CPEC projects, the business communities of the two countries will potentially get even closer.”

Prime Minister’s Trade Envoy to Pakistan Rehman Chishti MP said, “This is my second visit to Pakistan since being appointed as the UK Prime Minister’s Trade Envoy to Pakistan. I am delighted to bring with me a delegation of some of the United Kingdom’s leading companies to support Pakistan in the development of the country’s infrastructure. The UK and Pakistan have a shared ambition to deepen our trading relationship and it is the UK government’s firm desire to see more British companies doing business with, and in, Pakistan creating jobs and prosperity and playing an active role in Pakistan’s economic development. The UK is in a strong position to participate in projects owing to our world-class strengths ensuring projects deliver strong development outcomes, deliver shared prosperity objectives and better meet international standards. I thank Standard Chartered Bank for providing a forum to take this discussion further and gaining insight from key businesses that are already well established in the market.”

A number of important sectors of economy were represented at the lunch, including textile, energy and financial services.