Monday, September 07, 2009

KARACHI: The new Japanese government has suspended aid to the Third World countries and Pakistan will be the worst hit among these states, Aaj News reported. According to the channel, Japan's new government has taken this decision to provide free education to its citizen. Democratic Party of Japan, which has recently won the elections, has taken this decision in the light of its manifesto.

The channel said that Karachi Circular Railway (KCR) project is in jeopardy following the Japanese government decision.

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Thursday July 16, 2009

WASHINGTON: The International Monetary Fund on Wednesday said that Japan would likely wrestle with deflation through 2011 as it struggles to recover from severe recession. "Inflation is projected to remain negative until 2011," the IMF said in a report. The IMF sees prices falling 1.1 percent this year, 0.8 percent in 2010 and 0.4 percent in 2011. (AFP)

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Tuesday, June 16, 2009

SINGAPORE: Oil prices fell below 70 dollars in Asian trade Tuesday, mirroring a dive on Wall Street amid a strengthening US dollar, but traders were closely watching developments in Iran, analysts said.

New York's main futures contract, light sweet crude for delivery in July, shed 69 cents to 69.93 dollars a barrel.

Brent North Sea crude for August delivery eased 66 cents to 69.58 dollars. The July contract expired on Monday.

A strengthening greenback as well as losses on Wall Street sparked the pullback in oil, analysts said.

"The firmer tone of the US dollar and declines on US equity markets were negatives for the oil price," the Commonwealth Bank of Australia said in its daily commodities report.

A stronger dollar makes crude more expensive for buyers holding weaker currencies and that in turn tends to dampen demand and push the market lower.

The US currency particularly rose against the euro Monday following a spike in eurozone job losses and fresh concerns the credit crunch could stifle tentative signs of recovery there.

Traders are also "likely monitoring political developments in Iran," which is a member of the Organization of Petroleum Exporting Countries (Opec), the report added, referring to violent post-election protests in Tehran.

Iran is traditionally a price hawk among Opec members and is usually the leading advocate of a cut in production.

"The unrest if it continues will attract the attention of oil traders," said Phil Flynn of Alaron Trading.


(AFP)

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Monday June 15, 2009


ISLAMABAD: The government has increased the rate of capital value tax (CVT) from 2 to 4 percent on transfer of immoveable property; withholding tax on imports raised from 2 to 4 percent; 16 percent Federal Excise Duty (FED) in Value Added Tax (VAT) mode on services provided by fund/non-fund services provided by banking and non-banking financial companies, insurance services, ports/terminal operators, stock brokers and 16 percent FED on advertisements in newspapers, periodicals, hoarding boards, pole signs and shop boards.

Finance Bill 2009-10 released by the Federal Board of Revenue (FBR) on Saturday reveals taxation measures to meet the revenue collection target of around Rs 1.375 trillion for 2009-10. To meet this target, the FBR has envisaged collecting Rs 565 billion in shape of direct taxes, Rs 492 billion as sales tax, Rs 165 billion as FED and Rs 160 billion as customs duty in 2009-10.

Some major changes in tax laws show that the Presumptive Tax Regime (PTR) has been abolished on imports, exports and services. They would be liable to file returns and pay minimum tax.

Through another measure, the scope of advance tax collection on purchase of new locally manufactured motorcar/jeep is proposed to be extended to all types of motor vehicles. The basic limit of exemption from income tax in respect of salaried persons is proposed to be increased from Rs 180,000 to Rs 200,000. In the case of women salaried taxpayers, this limit is proposed to be increased from Rs 240,000 to Rs 260,000.

Presently, tax collected on monthly electricity bills in respect of non-corporate commercial and industrial consumers is treated as final tax. The tax deducted on the monthly electricity bills exceeding Rs 30,000 will be adjustable which consequently could be refunded.

The Seventh Schedule to the Income Tax Ordinance has been amended to restore the facility for banks to claim deduction on account of provisions of non-performing loans. However, the same is proposed to be restricted to 1 percent of the total advances made by the bank in a tax year. The government has also restored an important provision regarding payment of minimum tax on declared turnover by the companies showing losses.

The motor vehicle registration authorities are being empowered to collect advance tax payable on purchase of a new locally manufactured motor vehicle at the time of registration of such vehicle. It is being made mandatory that the taxpayers who are required to file wealth statement shall also file wealth statement reconciliation giving necessary details and documents in support thereof.


(BRecorder)

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Monday, June 15, 2009

VIENNA: The OPEC oil producers’ cartel said the worst of the impact from the economic crisis had passed for the oil markets, as it fractionally reduced its demand estimate for 2009 on Friday.

“In light of the considerable challenges the world economy and commodity markets, particularly the oil market faces, have undergone, the worst appears to be behind us,” the Organization of Petroleum Exporting Countries wrote in its latest monthly report.

“As the world economy stabilises, the world oil demand appears to be settling down,” it said. “Industrial production activities are steadying and in some parts of the world and have even improved slightly. This should stop the bleeding in oil demand. There are no significant downward revisions to our previous oil demand forecasts.”

OPEC estimated that demand would contract by 1.62 million barrels per day (bpd) or 1.89 per cent in 2009, only a marginal downward revision in demand from its earlier forecast.

In its previous monthly bulletin released in May, OPEC had been penciling in a contraction of 1.57 million bpd or 1.83 per cent for 2009. Nevertheless, uncertainties remained, OPEC cautioned.

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Friday, June 12, 2009

European stocks drifted between gains and losses as a rally in health-care shares offset concern the three-month surge by the Dow Jones Stoxx 600 Index has outpaced prospects for earnings. Asian shares climbed for a third straight day.

GlaxoSmithKline Plc led pharmaceutical stocks higher as the World Health Organization declared the first influenza pandemic since 1968. BT Group Plc increased 5.2 percent after Bank of America Corp. advised buying the shares. Total SA led a decline by commodity producers as oil and base metals slid. Li & Fung Ltd., the biggest supplier of clothes and toys to Wal-Mart Stores Inc., rose 6.2 percent on higher retail sales in China.

Europe’s Stoxx 600 slid 0.1 percent to 214.6 at 11:26 a.m. in London, trimming its fourth straight weekly gain to 1.9 percent. The gauge has surged 36 percent since March 9 on speculation the $12.8 trillion pledged by the U.S. government and Federal Reserve will end the first global recession since World War II.

“There are lots of people who have missed the upturn in equities and there is the end of the quarter looming so I think we’ll see some buying there,” Christian Gattiker, head of research and strategy at Bank Julius Baer & Co. in Zurich, said in a Bloomberg Television interview. We are likely to see “some more difficult markets during the summer lull in July.”

(Bloomberg)

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Friday, June 12, 2009

European industrial production dropped by the most on record in April as the worldwide recession ravaged demand for goods.

Production in the euro region plunged 21.6 percent from a year earlier, the most since the data series started in 1986, the European Union’s statistics office in Luxembourg said today. Economists expected a 19.8 percent decline, according to the median of 14 estimates in a Bloomberg News survey. From March, output declined 1.9 percent.

The global economy will contract for the first time since World War II this year as the fallout from the financial crisis leads companies to scale back production and run down stocks, the World Bank predicts. The European Central Bank this month kept its benchmark interest rate at a record-low 1 percent and will soon buy bonds in a bid to improve the flow of credit.

“The region has simply been hammered by the downturn in global demand and hampered by the run-up in the euro,” said Peter Dixon, an economist at Commerzbank AG in London. “We see interest rates on hold right through next year. The euro zone has been especially badly hit compared to the more service- oriented economies of the U.K. and the U.S.”

Production of durable consumer goods such as washing machines in the 16-member euro region declined an annual 22.4 percent in April, and output of capital goods such as factory machinery dropped 26.7 percent, according to today’s report.


Courtesy: Bloomberg

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Friday, June 12, 2009

The International Monetary Fund has revised its 2010 growth forecast sharply upwards, a source said on Thursday, and surging Chinese investment in May fuelled hopes of a global recovery. But underscoring the unclear outlook, World Bank President Robert Zoellick said the global economy is set to contract by close to 3 percent this year, worse than the previous estimate of a decline of 1.75 percent.

-- China investment surges, adding to recovery hopes

-- Japan Q1 GDP record low, slow rebound seen

"Although growth is expected to revive during the course of 2010, the pace of the recovery is uncertain and the poor in many developing countries will continue to be buffeted by the aftershocks," Zoellick said ahead of the Group of Eight finance ministers meeting in Italy. The IMF has raised global growth estimates for 2010 to 2.4 percent from 1.9 percent in April, a G8 source who has seen the latest figures said.

"The estimate has improved thanks to the impact of stimulus measures taken in recent months," said the source, who had access to an IMF briefing note, containing the figures, prepared for the G8 meeting this weekend. Global data has given increasing signals of a rebound from the deepest recession in six decades, driving stock markets sharply higher from a March trough.

However, financial markets remain concerned that huge government spending and central bank cash injections, led by the United States but mirrored in Europe and Japan, will spark inflation and undercut any budding rebound. Analysts also expect job losses to remain high even as the economy begins to recover, as companies remain wary of hiring.

A record slump in Japan's first quarter GDP also highlighted expectations that any rebound would be slow, and European officials said jobs would lag any return to growth. "The (global) economy should start to turn into positive territory somewhere between the end of this year and the middle of next year," European Central Bank policymaker Christian Noyer told Hong Kong businessmen on Thursday.

China has sought to cushion the blow from falling exports with a 4 trillion yuan ($585 billion) economic stimulus plan. Data showed annual growth of fixed asset investment in Chinese urban areas accelerated to 32.9 percent in the January-May period from 30.5 percent in the first four months of the year, suggesting the stimulus is working.

Underpinned by this optimism, commodity-related stocks in Asia rose for a third straight day while oil prices extended gains to seven-month highs. The International Energy Agency upgraded its 2009 world oil demand forecast for the first time in almost a year, saying 2009 demand would fall to 83.3 million barrels per day, a less steep decline than previously forecast.

China's need for government pump-priming was underlined by May customs data that showed exports fell 26.4 percent on the year, while imports fell 25.2 percent, resulting in a trade surplus of $13.4 billion, compared with $13.1 billion in April and $18.6 billion in March.

Meanwhile, Japan's economy contracted a revised 3.8 percent in the first three months of the year, less than the initial 4.0 percent estimate, but still the fastest pace since World War Two. Weak capital spending and personal consumption are expected to remain a drag.



Courtesy: BRecorder

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Friday, June 12, 2009

KARACHI : All-round gains were seen on the currency market on Thursday amid easy supply of dollars in process of trading, dealers said. The rupee on the interbank market, managed to gain 25 paisa against dollar for buying and selling at 80.80 and 80.85, they said.

Marketmen said that fluctuations in the rupee versus dollar is totally depending on the demand and supply factor. They also said that the rupee may not face sharp fluctuations till the end of the final session of the out-going fiscal year 2008-09. In the fourth session of the Asian trade dollar fell against a basket of currencies, paring some gains made after the benchmark US Treasury yield hit its highest point in eight months the previous day.


Courtesy: BRecorder

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ISLAMABAD: Pakistan’s foreign exchange reserves fell by $10 million to $11.51 billion in the week that ended on June 6, the central bank said on Thursday.

The State Bank of Pakistan’s reserves edged up to $8.20 billion from $8.18 billion a week earlier, while reserves held by commercial banks fell to $3.31 billion from the previous week at $3.34 billion, the State Bank of Pakistan said.

Foreign reserves hit a record high of $16.5 billion in October 2007 but fell steadily to $6.6 billion by November last year, largely because of a soaring import bill.

Pakistan agreed in November to an International Monetary Fund emergency loan package of $7.6 billion to avert a balance of payments crisis and shore up reserves.

Courtesy: Reuters

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Thursday June 11, 2009


Kenya is seeking $500 million in funds to help cushion the economy after the global economic crisis cut exports and foreign investment, Prime Minister Raila Odinga said.

The funds are over and above the $200 million loan that Kenya has secured from the International Monetary Fund, Odinga said in an interview in Cape Town yesterday, where he was attending the World Economic Forum on Africa.

The global recession has curbed Kenya’s foreign currency earnings as exports fell and remittances from Kenyans living abroad declined. Foreign currency reserves of about $2.6 billion cover three months of import needs, compared with the government’s target of four months, Scott Rogers, the IMF’s senior representative in Kenya, said on May 29.

“We are hoping we will get more support at this very critical moment to be able to bridge the gap,” Odinga said. “We seek particularly balance of payments support, which will help us to import” food and other goods.

Kenya has approached the African Development Bank and potential donors such as the European Union to help plug the funding gap, Odinga said. The government would prefer not to raise the money through domestic borrowing because that would have “negative” consequences for interest rates on government debt, he added.

Kenya may also revive a plan to sell bonds to international investors next year, Odinga said. The government in December scrapped plans to sell $500 million of bonds after borrowing costs rose and credit markets seized up. The funds had been earmarked for projects such as power plants and roads.

Tourism Recovery

East Africa’s biggest economy will probably expand between 2.5 percent and 3 percent this year, boosted by a recovery in agriculture and tourism, Odinga said. Growth slumped to 1.7 percent in 2008 from 7 percent in 2007, as the economy was hurt by the global recession and by post-election violence in the first quarter.

Odinga became prime minister last year after signing a power-sharing accord with President Mwai Kibaki to end two months of clashes between ethnic groups after a disputed election. About 1,500 people were killed in the fighting.


Courtesy: Bloomberg

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