Wednesday June 24, 2009

KARACHI: US Ambassador to Pakistan, Anne Patterson informed that an additional $200 million aid assistance for Pakistan, was approved on Tuesday, while at the same time, the US is also working on the $1.5 billion annual financial assistance promised to the country for the next five years.

She further said $30 million had already been provided for the Internally Displaced Persons (IDPs) earlier. Patterson added that the US was also ready to provide assistance to deal with the energy crisis of Pakistan.

She also stated that the Obama administration is working hard towards implementing the bill on the Reconstruction Opportunity Zones (ROZ) of Pakistan and she was optimistic that work would soon begin on it.

Addressing the media at the inauguration ceremony of the new American Business Council of Pakistan (ABC) office premises on Tuesday, she admitted that while the House of Bills had approved of it, there were some differences in the Senate which the Obama administration was working to resolve.

Patterson said that it was a challenge for the US to expand their trade to developing countries when they themselves were facing critical times due to recession as the western country was also facing losses and increasing unemployment threats.

However, she added that the Obama administration was working on increasing investments in the country and she too personally encouraged American businessmen to visit Pakistan and invest here.

Speaking about Pakistan and US trade relations, Patterson said that US was Pakistan’s largest trading partner and had made investments worth billions of rupees. She further said that Pakistan should increase trade within the region and also with neighbouring countries which would help it to experience a much needed boost in trade relations.

To a question by the media, the ambassador also said that while the US wasn’t working particularly to increase trade between India and Pakistan, they would encourage the two countries to do so as it would be advantageous for all three nations in terms of trade and economic benefits.

Patterson said that Pakistan has a highly productive youth based population which has a “good appetite for consumer goods” and therefore, opportunities are abundant in the country for development and progress.

To another question regarding the gems and jewelry sector of Pakistan of which the US is the largest importer, Patterson said that American businessmen are driven by price and quality which in turn determines the trade potential and level with other countries.

“I would be very surprised if Americans pull out of any deal in Pakistan where they are benefitting in terms of price and quality,” she expressed.

Referring to the IDP camps, Patterson said that USA had been the largest donor to this country and would continue to be generous even in the future. She continued to say that millions had also been donated by the American companies based in Pakistan and the employees working for them.

She further stated that the US was not involving UN agencies in their aid work for the IDPs. Nevertheless, they had involved the local NGOs for the cause of which the Human Development Fund was playing a pivotal role in working with the US to provide financial aid here.


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Wednesday June 24, 2009

NEW DELHI: The growing Maoist insurgency in India over large swathes of the mineral-rich countryside could soon hurt some industrial investment plans just as the country suffers an economic slowdown.

The government banned the Communist Party of India (Maoist) on Monday, bracketing it with Islamist militant groups, but experts said the ban would have little impact in the battle against the rebels.

On the ground, police fight Maoist insurgents with outdated weapons and are often outnumbered by rebels, who are skilled in jungle warfare and are well-equipped with rocket launchers, automatic rifles and explosives.

Last week, hundreds of Maoists declared the town of Lalgarh about 170 km (100 miles) from Kolkata, capital of West Bengal, as a “liberated zone”, sparking unease among investors.

While the economic impact may be small compared with India’s trillion dollar economy, the insurgency and the sense that it is worsening signals that India does not fully control its own territory and adds to risks for companies mulling investments.

The Lalgarh incident worried the country’s third-largest steel producer, JSW Steel, which is setting up a $7-billion, 10-million tonne steel plant near Lalgarh.

“We are waiting and watching, so are the others,” Biswadip Gupta, chief executive officer of the company’s West Bengal operations, told Reuters on Tuesday.

“On top of the economic woes, you have the problem of Maoists now. It is very jittery,” Gupta said by telephone from Kolkata.

Prime Minister Manmohan Singh has described Maoists as the biggest internal security threat since independence, and this year more than 300 people, mostly police, have been killed.

The Maoists started their armed struggle in West Bengal’s Naxalbari town in the late 1967, and have expanded their support among villagers by tapping into resentment at the government’s recent pro-industry push.

The rebels, estimated to have 22,000 fighters, operate in large parts of the eastern, central and southern countryside, and officials say they are now spreading to cities and bigger towns.

The Maoists, who are fighting for the rights of poor farmers and the disenfranchised, regularly attack railway lines and factories, aiming to cripple economic activity.

“It is still a law and order problem, but it has not been taken seriously and can have serious consequences if not dealt with properly,” said Anjan Roy, analyst at the Federation of Indian Chambers of Commerce and Industry, referring to growth of industry. The effect of the Maoist insurgency has already taken its toll on business.

In mineral-rich Orissa state, bauxite production at state-run National Aluminium Co Ltd (NALCO) has fallen by 20 percent since an April attack by Maoists in one of their mines.


(Reuters)

Wednesday June 24, 2009

LONDON: Sterling edged lower against the dollar and fell more sharply versus the euro on Tuesday with the market taking its cue from equity markets to gauge risk appetite. Early losses in UK share prices pushed the pound to a low of around $1.6210. But the British currency pared some losses as share prices recovered. Sterling also lost traction against the dollar after US data showed sales of previously owned homes in the United States rose at a slower-than-expected pace in May.

Sales rose 2.4 percent to an annual rate of 4.77 million units from a downwardly revised 4.66 million pace in April, below forecasts for a 4.81 million-unit pace. "The overall climate (for sterling) remains defensive," said Asraf Laidi, chief market strategist at CMC Markets. By 1442 GMT, sterling was down 0.3 percent at $1.6283, after hitting a session low of $1.6211, according to Reuters data. The euro was up 1.3 percent at 85.93 pence, having fallen to around 84.00 pence on Monday, its lowest level since early December.

The single currency also rose 1.0 percent against the dollar. "There is some uncertainty about the nature of recovery in the UK economy, so we are seeing some near-term headwinds for sterling," said Phyllis Papadavid, currency strategist at Societe Generale in London. But she said the pound would still be attractive over the medium-term as sentiment and economic data improved.

Sterling was well-supported at a key technical level around $1.6180, technical analysts said. Figures from the British Bankers' Association showed the number of mortgages approved for house purchase rose 15.8 percent on a year earlier in May, ending months of annual declines.


(Reuters)

Wednesday June 24, 2009

NEW YORK: The three-month rate banks charge each other for dollars fell to a record low on Tuesday as the Federal Reserve's rate-setting group prepared to begin its scheduled meeting. Expectations of a rate-friendly outlook from the Fed's Open Market Committee, and less anxiety over the record $104 billion in US government debt supply for sale this week, lowered the short-term costs and risk premiums on dollars.

"The Fed trumps supply concerns for now unless the demand is really awful," said Eric Lascelles, chief economics and rates strategist with TD Securities in Toronto. The FOMC will begin to meet on Tuesday and conclude on Wednesday afternoon when it is expected to release a policy statement immediately after. Adding to the downward pressure on dollar rates was the European Central Bank's launch of its one-year funding operation aimed to increase liquidity in the Euro zone banking system, analysts said.

The London interbank offered rates on three-month dollars fell to a record low of 0.6075 percent, surpassing the prior low of 0.60875 percent set last week. At the same time, the three-month Libor on euros slipped to 1.21063 percent, the lowest since the common currency was launched in 1999. Traders are betting the FOMC will leave its target rate range alone at zero to 0.25 percentage point as an economic recovery will likely be sluggish.

They are also speculating whether the FOMC will signal it could expand its $300 billion Treasury purchase program to counter the recent rise in mortgage rates and other longer-term borrowing costs. "People are scaling back their expectations of a rapid recovery," TD's Lascelles said. The European Central Bank's one-year funding operation could exert downward pressure on US rates going out to 12 months, analysts said.

The results of the ECB 12-month refinancing operations are due at 0920 GMT on Wednesday. A poll conducted by Reuters on Tuesday showed money market traders expect the ECB will allot a median 300 billion euros at the refi auction, which will be effective in bringing down short-term rates. Strong demand for this new type of ECB quarterly funding will likely curb the rates Euro zone banks would pay to borrow longer-term dollars in US money markets.

This could mean lower euro and dollar Libor, and lower yields on 6-month to 12-month US commercial paper, as money market investors bid on fewer of these securities issued by Euro zone banks, said Alex Roever, short-term interest rate strategist at J.P. Morgan Securities.


(Reuters)

Wednesday June 24, 2009

NEW YORK: Investors' appetite for risk fell on Monday, driving up the safe-haven US dollar and yen and dragging down riskier higher-yielding currencies after an outlook by the World Bank stirred worries about global growth. The euro came under added pressure and dropped near $1.38 as a closely watched business climate survey in Germany, the euro zone's largest economy, painted a mixed picture about Germany.

The World Bank said on Monday that prospects for the global economy remain "unusually uncertain," and it cut its 2009 growth forecasts for most economies. The US and Japanese currencies have tended to rise on extreme risk aversion in recent months.

"Risk aversion has resurfaced as market participants take profits on riskier exposures," said Samarjit Shankar, director of global foreign exchange strategy at the Bank of New York Mellon in Boston. There are "renewed concerns about the extent of the ongoing global recession and the sustainability of the 'green shoots' of recovery."

In late afternoon in New York, the euro was down 0.6 percent at $1.3857 after hitting a session low of $1.3827, according to Reuters data. On electronic trading platform EBS, the low was 1.3826. Data showed the German Ifo business climate index rose to 85.9 in June from 84.3 the previous month, beating forecasts of 85.2. The current conditions index, however, fell to 82.4 from 82.5, versus a forecast of 83.1.

Traders also cited concerns about Germany's widening budget shortfall as an excuse to sell euros. Germany will raise its net new borrowing target in 2010 to a record level that may exceed 100 billion euros ($139 billion) as the country attempts to battle the financial crisis.

"Germany is the financial anchor of the euro zone. If there are fiscal problems in Germany, all the other states in the euro zone just crumble by the wayside," said Boris Schlossberg, director of currency research at GFT Forex in New York. "That's why the market is reacting so negatively." Against the yen, the euro fell 1 percent to 132.93 yen, while the dollar dropped 0.3 percent to 95.93 yen, according to EBS.

The euro had briefly recovered some losses after European Central Bank President Jean-Claude Trichet said on Monday that he continues to see an economic recovery next year. Speaking in Madrid, he said policymakers must remain alert despite initial signs of a slowing in the pace of economic decline.

Moves in the foreign-exchange market were limited, with investors awaiting the US Federal Reserve's policy-setting Open Market Committee meeting on Tuesday and Wednesday. The Australian dollar fell 2.1 percent to $0.7871 while the New Zealand dollar was down 2 percent at $0.6301, according to Reuters data. Sterling fell 0.9 percent to $1.6343, after going as low as $1.6320. A record $104 billion in US Treasury debt is to be auctioned in the United States this week, giving investors one more factor to consider. Short term interest rates fell on Monday.


(Reuters)


Wednesday June 24, 2009

KARACHI: The rupee improved with slight gains against dollar on the interbank market on Tuesday, rising three paisa for buying at 81.32 and five paisa for selling at 81.35, money experts said. The rupee may move both ways in the coming days despite the rising demand for dollars, they added.


On the second day of Asian trade dollar extended losses against yen Tuesday to hit its lowest point this month, as investors continued to cut bets on riskier assets and bought back yen against other major currencies. The dollar fell as low as 94.98 yen on trading platform EBS, its lowest since June 1, before trading at 95.06 yen, down 0.8 percent on the day.

Open Market Rates: The rupee extended its decline against dollar for the second day as it shed 10 paisa against dollar for buying at 81.40 and 40 paisa for selling at 81.90, they said. The rupee, however, maintained its firmness against euro, rising 90 paisa for buying at Rs 111.60 and it also rose by 80 paisa for selling at Rs 112.10, they said.

Open Buying Rs 81.40
Open Selling Rs 81.90

Interbank Closing Rates: Interbank Closing Rates For Dollar On Tuesday.

Buying Rs 81.32
Selling Rs 81.35

Wednesday June 24, 2009

MOSCOW: The Russian economy may contract by up to nine percent in 2009 if stimulus funds fail to reach their recipients, First Deputy Prime Minister Igor Shuvalov told Reuters in the gloomiest economic prediction for Russia to date. Economists polled by Reuters see the economy contracting by 4.9 percent in 2009 while the World Bank on Monday said the contraction may reach 7.5 percent.

Government officials earlier said they saw gross domestic product (GDP) falling between six and eight percent. "Maybe eight to nine percent. Maybe. But this is a pessimistic scenario in case we are not be able to spend budget funds on different investment projects planned for 2009," Shuvalov told Reuters financial television on Tuesday.

"It is too early to draw conclusions about how effective our anti-crisis policy was. We can draw conclusions when Russia returns to sustainable growth. We hope this period will come in the end of 2009 or in 2010," he said.

Despite the economic contraction, Shuvalov said he saw no depreciation risks for the rouble and that the government was more concerned about the risk of the currency appreciating too much, which could hurt the economy further, if the price of its oil exports strengthens further.

"We are afraid of a significant rise in energy prices because it will naturally have an impact on the rouble. The rouble will strengthen which is not very good for Russian industry," Shuvalov said. After devaluing the rouble by a third earlier this year, Russia's central bank has set a wide trading band of between 26 and 41 roubles to a dollar/euro basket, intervening in the market to iron out what it sees as excessive exchange rate volatility.

Shuvalov said the government wants to set strict limits on budget spending in 2010 based on a conservative oil price forecast to avoid a repetition of 2009 when the budget was first based on an overly optimistic forecast of $95 per barrel. "The main thing now is not to make any decisions (regarding fiscal spending plans based on a certain price of oil) ahead of time ... We need to make decisions based on what we have," Shuvalov said.


(Reuters)

Wednesday June 24, 2009

BEIJING: The Chinese economy is headed in the right direction, but the foundations of the recovery are not yet solid, Su Ning, a vice-governor of the People's Bank of China, said on Tuesday. Speaking at a mergers and acquisitions conference, Su said he hoped China would be the first major economy to emerge from the global crisis. "The overall situation is stabilising and moving in the right direction," he said.

But he cautioned that the pick-up was still not firmly anchored and expressed particular concern about the "grim" international environment for Chinese exporters as the two-year-old financial crisis continues to take a toll on global growth. The World Bank also cited poor prospects for exports - and for private investment - when it cautioned last week that a rapid, broad-based recovery was unlikely even as it marked up its forecast for 2009 GDP growth to 7.2 percent from 6.5 percent.

A clutch of banks, including Standard Chartered, Barclays Capital and Royal Bank of Canada, have also raised their forecasts for China's gross domestic product growth in the past week following statistics for May that, except for trade, were generally robust.

The May data showed the economy benefiting from a 4 trillion yuan ($585 billion) government stimulus package as well as a loose monetary policy that has led to a burst of money and credit growth. In the first five months of the year, banks extended a record 5.84 trillion yuan in loans, exceeding the minimum target set by the government of 5 trillion yuan for all of 2009.


(Reuters)

Wednesday June 24, 2009

NEW DELHI: A patchy start to India's annual monsoon has raised doubts about a nascent economic upturn, as the poor rainfall in June could hurt growth, push up food prices and prompt more government spending to support farmers. The monsoon, crucial to a farm sector that accounts for about a sixth of economic output, has stalled after an early start.

In the week ended June 17, rains were 51 percent below normal, the Meteorological Department said last week. "Delay in monsoon will play the spoilsport and may hit GDP by at least 1 to 1.5 percentage points," V.K. Sharma, head of research at Anagram Stock Broking in Ahmedabad. "And a monsoon failure might see the government take more social security measures, which will widen the deficit."

Recent data on growth, factory output and manufacturing have fanned hopes that the domestic-demand-driven economy, battling a widening fiscal deficit, may be on the mend. The World Bank on Monday said India would grow 5.1 percent in 2009. While above the bank's earlier forecast, it is still below 6.7 percent in 2008/09 and more than 9 percent growth in previous years.

The June-September monsoon rains are a major influence on the economy, as two-thirds of Indians depend on agriculture and large areas of the vast south Asian country suffer from a lack of modern irrigation facilities. The monsoon is crucial for summer-sown crops such as rice, soybean, sugarcane and cotton, and as temperatures rise across the country, Indians are getting desperate for rains.

The farm minister in central Chhattisgarh state held a prayer ceremony hoping the region would get rains soon, and media reported farmers in the western city of Nagpur organised a wedding of two frogs to please the rain gods. Media reports also say several states are drawing up plans to counter the impact of paltry rains.

But Montek Singh Ahluwalia, a key official in Prime Minister Manmohan Singh's government, said on Tuesday delayed monsoon rains may not impact the economy much. Forecasting the monsoon is one of the most important events in the country: while weather officials use scientific skills and data to track the rain, holy men and astrologers rely on traditional knowledge to make predictions.

"It appears El Nino has influenced the monsoon progress," a weather office official, who did not wish to be named as he is not authorised to talk to the press, told Reuters. When El Nino, a weather condition marked by warming of the eastern equatorial Pacific Ocean waters, hits the monsoon it can cause a lack of rains and even drought.

The weather office will review the monsoon's progress on June 25, when it is expected to outline the impact of El Nino. A delay in monsoon rains is bad news for policy makers, who were upbeat about the prospects of the farm sector, seen as a key motor for national demand in the economy.

The farm sector accounts for nearly 17 percent of India's gross domestic product and provides a livelihood for most of the 1.1 billion population. Poor monsoon rains could dent rural demand, hurt corporate profitability and undermine sentiment in financial markets.

Companies such as Maruti Suzuki India, Hero Honda Motors, and Hindustan Unilever drew strength from a robust rural market during the economic slowdown. Robust monsoon rains often leads to bumper harvests, which in turn raises farm incomes and increases demand for goods ranging from television to cars and lends support to factory output.

Some economists said it was too early to write off the monsoon, but the delay would cause some stress. "The delay is not a good signal. Food prices are already high and any delay could push food prices higher. Food price inflation could emerge as a concern," said D.K. Joshi, principal economist at credit ratings agency Crisil.


(Reuters)

Wednesday June 24, 2009

MANILA: The Philippines' Finance Secretary on Tuesday rejected forecasts by the World Bank that Manila would fall into a recession this year. "We're focused and I think we can hit 0.8 percent (gross domestic product growth)," Margarito Teves told reporters. "The likely scenario is 0.8 percent growth," he said, adding that this was already a conservative projection.

Reacting to reports that the World Bank had projected a 0.5 percent contraction this year, Teves said: "They are probably cautious." Earlier this month, the International Monetary Fund had forecast the Philippine economy would shrink by 1.0 percent this year. Teves conceded that while a recession was "possible," all indicators pointed towards modest growth, adding that Manila would continue with its increased spending to stimulate the economy.

But he said both sectors would do better than the Bank expected. The Philippines relies heavily on the remittances of about nine million Filipinos working overseas but there are fears many of them will lose their jobs due to the global financial crisis.

But Teves said at worst remittances would remain flat as many Filipinos continued to find jobs abroad, while earlier this month, the central bank said the amount sent home in the first four months rose 2.6 percent year on year. Total exports in the first four months of the year plunged 36.4 percent from a year earlier to 10.727 billion dollars.


(AFP)

Wednesday June 24, 2009

WASHINGTON: The United States and European Union on Tuesday began a case against China at the World Trade Organisation over its export restrictions on industrial raw materials, saying Beijing was trying to tilt the playing field in favour of its own industries.

The action followed failure to persuade resource-hungry China to reduce its export tariffs and raise quotas on a number of key materials such as coke, zinc and yellow phosphorus.

The materials are used in steel, microchips, planes and other products, and the trade flows affected are worth billions of dollars, US officials said. "After more than two years of urging China to lift these unfair restrictions, with no result, we are filing at the WTO today," US Trade Representative Ron Kirk told a news conference in Washington.

"We are most troubled that this appears to be a conscious policy to create unfair preferences for Chinese industries" that use the materials, he said. The United States and the European Commission - which oversees trade for the 27-nation EU bloc - are formally seeking consultations with Beijing at the global trade watchdog. If these talks fail, after 60 days the next step would be to request a WTO panel to hear the complaint.

"It is very much hoped that we will not have to proceed to the next stage," Kirk said. In Brussels, EU Trade Commissioner Catherine Ashton said in a statement, "The Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn." "I hope that we can find an amicable solution to this issue through the consultation process," she said.

Chine limiting exports

The EU and the United States say China continues to restrict exports of raw materials despite its pledge to eliminate export taxes and charges when it joined the WTO in 2001.

This seriously disadvantages foreign "downstream producers" of goods, such as aluminium producers and steelworkers, since the export restraints limit their access to raw materials and raise world market prices for the materials while lowering the prices that domestic Chinese producers have to pay, US officials said.

US officials said the nine materials covered by their case were bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc. In Ottawa, Canadian officials indicated they haven't ruled out joining the case. "For the moment, we are closely monitoring developments in this file," said Melisa Leclerc, spokeswoman for Canadian Trade Minister Stockwell Day.

Taking action at the WTO is expected to further damage already brittle trade relations with China. US-China tensions have been exacerbated by the growth in the US trade deficit. This is the first case brought by President Barack Obama's administration against China at the WTO.

Trade disputes between Brussels and Beijing are on the rise since the EU's trade deficit with China has ballooned. Brussels has imposed a number of anti-dumping tariffs on imports of Chinese goods ranging from shoes to steel products. In a move that may have been an attempt to forestall US and European action, Beijing had said on Monday it was cutting export taxes on a range of materials.

But the steps China took had no impact on eight of the nine materials in the US complaint, with phosphorus being the exception, a US trade official said, speaking on condition of anonymity. "We are still studying what China did," she said. The Alliance for American Manufacturing praised the US-EU move, saying it could be the first step in a "new and promising era of trade enforcement."


(Reuters)


Wednesday June 24, 2009

ISLAMABAD: The Federal Board of Revenue (FBR) has decided to provide a major incentive to the corporate sector by extending one-month period for payment of advance tax under Income Tax Ordinance 2001. It is learnt here on Tuesday that the FBR has proposed amendment in the Finance Bill (2009-10) through amendment in the Income Tax Ordinance 2001.

Through new amendment, the FBR would allow the corporate sector to pay advance tax for one month extended period. Resultantly, the board has provided benefit of one month to companies. According to sources, companies would be given one more month for payment of advance tax. Previously, advance tax was payable on 15th of the month on which quarter was ending.

Whereas now it has been proposed that the companies will pay advance tax on 15th of the following month in which the quarter ends. In this way, the tax pertaining to quarter ending on September will be payable by 15th of October. However, in case of June, the quarterly advance tax would be paid by 15th of June.

The decision would be instrumental in facilitating the business community to keep the tax amount in their business circulation for another month. This is a key incentive, which would also attract individuals and AOPs to convent themselves into companies for availing this benefit. In case the individuals and AOPs were being converted into companies, they could get benefit of one more month for payment of advance tax. The FBR has proposed the following amendment in the Finance Bill (2009-2010): "(5A) Advance tax is payable by a company to the Commissioner:

(a) in respect of the September quarter, on or before the 15th day of October;

(b) in respect of the December quarter, on or before the 15th day of January;

(c) in respect of the March quarter, on or before the 15th day of April; and

(d) in respect of the June quarter, on or before the 15th day of June.";


(BRecorder)


Wednesday June 24, 2009

ISLAMABAD: Chief Justice Iftikhar Muhammad Chaudhry on Tuesday took suo motu notice of the proposed plan to increase power tariff by at least a whopping 17 percent across the board, with the exception of lifeline consumers from effective July 1 in spite of massive loadshedding in the country.

Some analysts are of the view that the rise would be as high as from 18 to 20 percent. The court issued notices to Chairman of Water and Power Development Authority (Wapda), National Electric Power Regulatory Authority (Nepra) and power distribution companies (Discos), supporting a raise in electricity rates.

The Chief Justice took notice of the issue on various appeals and newspaper columns as well as programmes on the electronic media. The government has committed to the international financial institutions (IFIs), including World Bank, Asian Development Bank and International Monetary Fund (IMF), to eliminate subsidy in power sector from the 2009-10 financial year.

The government will increase the electricity tariff by 17-20 percent in two phases effective from July 1. According to estimates, calculated by the economic managers and IFIs representatives jointly, if the government does not increase electricity by at least 17 percent during the entire 2009-10 fiscal year, it will cost Rs 75 billion to the exchequer.

Taking notice of the issue, the Chief Justice also asked the Wapda Chairman for comments over the issue. In compliance with the orders of the court, the Wapda Chairman submitted that under the 1997 Nepra Act, it was responsible to determine the tariff rates, charges and other terms and conditions for the supply of electric power services by the generation, transmission and distribution companies and recommended these to the Federal government as well as to comply with guidelines not inconsistent with the provisions of the Nepra Act, laid down by the Federal government.

The Nepra is also responsible to determine and prescribe the procedures and standards, modifications or revision of rates. The power tariff is determined by the Nepra for each distribution company based on company's revenue requirements to ensure smooth running of the company's normal operations after personal hearing and interactions with all stake holders and it was implemented after notification by the government of Pakistan.

Regarding a news item that appeared for enhancement of tariff of Rs 1.96 per unit, the government of Pakistan as reported in the press had not notified the proposed increase in tariff, it added. The Chief Justice directed to put up this case in the court on July 6, within 15 days, and directed to issue notices to Chairman of Wapda, Nepra and all Disocs.


(BRecorder)

KSE hits bearish low today


Wednesday June 24, 2009

KARACHI
: Karachi Stock Exchange witnessed narrowed trading activities today, as the KSE benchmark index could not cross 7100-point level.

The trading began in positive zone and on one occasion, the index was seen touching 7085 points level; but, the selling pressure in energy stocks turned the positive zone into negative, leading the KSE-100 index to close at 7023 down 34 points.

Today, the trading volume was 80 million shares with the most activity in recorded in shares of DG Khan Cement, which closed at Rs29.26 up 63 paisas.

The large funds and investors preferred selling shares as the closing on June 30 nears. Also, KSE-30 index closed at 7466 down 12 points.

The analysts said the market may experience short recovery in the upcoming days.


(Aaj Tv)

Wednesday June 24, 2009

LONDON: Leading European stock exchanges turned in a mixed performance Tuesday, with the London FTSE 100 index shedding 0.10 percent to close at 4,230.02.

In Paris the CAC 40 fell 0.21 percent to finish at 3,116.82 while in Frankfurt the Dax rose 0.29 percent to 4,707.15 points.


(AFP)

Wednesday June 24, 2009

LONDON: The euro climbed against the dollar on Tuesday, breaking the 1.40 dollar mark on supportive eurozone economic data as investors looked ahead to this week's US Federal Reserve monetary policy meeting.

In late trade in London, the European single currency rose to 1.4030 dollars from 1.3856 dollars in New York late on Monday.

Against the Japanese currency, the dollar declined to 95.36 yen from 95.86 yen on Monday.

The business contraction in the 16 countries using the euro was the shallowest for nine months in June, despite a steep decline in the service sector, a survey showed on Tuesday.

The eurozone's purchasing managers' index (PMI), compiled by data and research group Markit, rose to 44.4 points in June from 44.0 points in May, according to a first estimate, fuelling hopes that the recession may be bottoming out.

However the latest figures remain firmly below the boom-bust line of 50 points -- a score below 50 indicates a contraction -- for a 13th consecutive month in the recession-hit eurozone economy.

"The eurozone economy is showing signs of stabilisation, but a return to positive growth might have to wait until 2010," said ING economist Carsten Brzeski.

"Further unfolding of government stimulus, combined with the European Central Bank's aggressive monetary easing, should help to stabilise the economy further."

He added that "there is now growing evidence that the worst is behind us" in the eurozone.

Traders were also looking ahead to the US Federal Reserve's two-day monetary policy meeting, starting later Tuesday, amid concerns over the safety of US debt and the bank's future lending rates policy.

"If the Fed suggests that rates will be kept low for a prolonged period whilst signalling optimism on the recent improvements in data, then risk appetite is likely to be restored quickly, hence providing support" to the euro against the dollar, BNP Paribas bank analysts said.

The yen and dollar had benefited from safe haven flows on Monday after the World Bank sapped hopes that the global economy was on the mend.

The World Bank slashed its forecast for developing nations' economies, estimating growth at 1.2 percent this year, while warning more measures were needed for a recovery to take hold.

Meanwhle a leading member of the European Central Bank, Axel Weber of Germany, hinted on Tuesday that its current cycle of sharp interest rate cuts was over, saying its efforts so far made further decreases unnecessary.

Eurozone banks were expected to flock to an unprecedented loan offer at the ECB, which said it would lend an unlimited amount of the single currency to banks for a full year for the first time at a record low rate of 1.0 percent.

In late London trade on Tuesday, the euro was changing hands at 1.4030 dollars against 1.3856 dollars late on Monday, at 133.46 yen (132.84), 0.8593 pounds (0.8475) and 1.5026 Swiss francs (1.5059).

The dollar stood at 95.36 yen (95.86) and 1.0736 Swiss francs (1.0866).

The pound was at 1.6286 dollars (1.6343).

On the London Bullion Market, the price of gold firmed to 920.75 dollars an ounce from 919.25 dollars an ounce late on Monday.


(AFP

Wednesday June 24, 2009

NEW YORK: Oil prices rebounded on Tuesday on the back of a weak dollar and the raging Iranian political crisis.

New York's main futures contract, light sweet crude for delivery in August, rose 1.74 dollars from its closing price Monday to end at 69.24 dollars a barrel as the contract made its debut on Tuesday.

London's Brent North Sea crude for August climbed 1.82 dollars to close at 68.80 dollars.

Prices had been dropping after scaling past 73 dollars a barrel in recent days as concerns over the economic crisis eclipsed supply worries amid political tensions in Iran and attacks on oil installations in Nigeria.

"We see a bit of a reversal from the last couple of days," said Bart Melek of BMO Capital Markets, describing it as "a bit of a pause in the correction we had."

"Weakness in the US dollar helped the prices to move higher as well," he added.

A fall in the greenback makes dollar-priced oil cheaper for buyers holding stronger currencies, which tends to boost demand and lift prices.

The euro climbed against the dollar Tuesday, breaking the 1.40 dollar mark on supportive eurozone economic data as investors looked ahead to the two-day US Federal Reserve monetary policy meeting that began Tuesday.

Oil prices early Tuesday ducked underneath 67 dollars, in line with falling stock markets and worries over global economic recovery. Traders also sought to lock in profits from the recent rally.

"There is a sense that the selloff might have been overdone," said Phil Flynn of Alaron Trading.

The political crisis in Iran also weighed on the market.

Iran ruled out on Tuesday overturning the disputed presidential election as US President Barack Obama said there were significant questions about the poll's legitimacy and condemned the crackdown on post-election protests.

But supreme leader Ayatollah Khamenei agreed to a request by the top election watchdog, to extend by five days Wednesday's deadline to examine vote complaints, Iran's ISNA news agency said.

As international alarm mounted over the crisis, the most serious challenge to the Islamic regime in its 30-year history, Britain said it was expelling two Iranian diplomats after a similar move by Tehran.

At the same time, other European nations hauled in envoys to protest at the election and the repression of protests.

"Still oil is unmoved as there are scores of producers waiting to fill any void in oil production that may happen in the event of a cut off in supply," said Flynn.

Oil prices plunged from highs of more than 147 dollars in July 2008 to about 32 dollars in December as the economic slowdown crushed demand for energy but the market has since clawed back ground on hopes for a recovery.


(AFP)

Wednesday June 24, 2009

ISLAMABAD
: The consumers are likely to face 17 percent hike in oil prices after imposition of 'carbon surcharge' on petroleum products in place of petroleum development levy (PDL) effective from July 1, 2009. However, the government has decided not to levy 'carbon surcharge' in place of PDL on JP-4 and JP-8 and the Finance Ministry has formally conveyed the decision to Petroleum Ministry.

The Petroleum Ministry had sought explanation from the Finance Ministry regarding the replacement of PDL with carbon surcharge on two petroleum products, ie JP-4 and JP-8. The government is currently charging rupees three per litre PDL on JP-4 and JP-8.

Sources in the Finance Ministry revealed to the Business Recorder on Tuesday that the Finance Ministry had conveyed to the Petroleum Ministry that the government would end the PDL from July 1 and levy "surcharge" on petroleum products, including kerosene oil, high speed diesel, motor spirit (MS), light diesel oil (LDO) and HOBC.

The Finance Ministry has further revealed that fixed rate of carbon surcharge, announced in Finance Bill 2009-10, would be applicable from July 1. According to the Finance Bill 2009-10, the government will charge rupees eight per litre carbon surcharge on high speed diesel oil (HSDO), Rs 10 per litre on motor spirit (MS), rupees six per litre on kerosene oil, rupees three per litre on light diesel oil (LDO) and Rs 14 per litre on HOBC. The sources said that the total impact of this surcharge would be equivalent to a 17 percent hike in price of petroleum products.

The government had targeted collection from carbon surcharge on petroleum products at Rs 122 billion in the 2009-10 financial year budget and Rs 12 billion collections from carbon surcharge on compressed natural gas (CNG). However, the government has exempted CNG from carbon surcharge after facing severe criticism from the parliamentarians and the public.

According to the sources, the Finance Ministry had said that there would be no notification of surcharge and it would be implemented in place of PDL on the petroleum products from July 1. After imposition of carbon surcharge, the government may deregulate price of all petroleum products and authorise oil marketing companies (OMCs) to make automatic adjustment in oil prices in line with the global oil prices.

However, the OMCs will follow formula of oil pricing set by Federal government. At present, high speed diesel (HSD) price is deregulated based on the Federal government formula, whereas the prices of other products, including light diesel oil (LDO), kerosene oil, and motor spirit, JP-1, JP-4 and JP-8, are regulated and notified by the government at the end of every month.


(BRecorder)