Monday, June 15, 2009

ISLAMABAD: The Advisor to Prime Minister on Finance, Shaukat Tarin, said on Sunday that in case of any delay in receipts of pledges from Friends of Democratic Pakistan (FODP) Pakistan has lined up commitment of $4 billion from the International Monetary Fund (IMF).

Addressing the post-budget news conference here, he said that FODP forum has been requested to give money for social sectors so that the growth-oriented policy could be pursued and implemented in true spirit through financial resources available with the country. He said that the World Bank, the Asian Development Bank, and Islamic Development Bank (IDB) would give $4.80 billion in the next two years. An assistance of $5.80 billion is expected from FODP forum in the same period.

"After achieving targets of economic stabilisation plan, the economy is poised to go for sustainable, equitable and job creating growth. The current account deficit and fiscal deficit are well under control.

The budget 2009-10 is focused on agriculture and manufacturing with agenda of enhancing productivity level through improvements to human capital base and physical infrastructure and ensure availability of cost effective energy in the country.

Shaukat said that during 2008-09 the response of this government was phasing out of the subsidies and sustaining the budgetary resources. He said that the expenditures were rationalised through a process of prioritisation of government development schemes to reduce budget deficit.

He said in this regard development expenditures were reduced and went down by Rs 120 billion. He added that SBP followed a tight monetary policy to reduce the aggregate demand and to bring down inflation. There were adjustments in petroleum prices and electricity prices to reduce burden on the budget, he added.

He said that net borrowing from SBP as of October was Rs 252 billion to Rs 258 billion. "By March it had been reduced to Rs 58 billion, which means we have started paying back to the SBP rather taking from it".

He said that import of non-essential items was curtailed by tariff adjustments to reduce the trade and current account deficits. He said that fiscal deficit has remained on target which means it has come down from 7.6 percent in 2007-08 to 4.3 percent in 2008-09. He said that current account deficit has been reduced from 8.5 percent to 5.3 percent of GDP, again a reduction of 3.2 percent in one year.

"Our tax and duty measures in Budget for Fiscal Year 2009-10 would revolve around providing protection to the poor and vulnerable against the current economic downturn by providing cash transfers and skill development, reviving manufacturing and industry, especially export-oriented industry, to raise their productive levels, broadening the tax base, instead of overburdening the existing taxpayers, and restraining unnecessary imports to improve the Balance of Payments position."

Tarin told a questioner that budgetary deficit will be around 3.4 percent during next fiscal year. Non-productive subsidies are being done away with this year, he said, adding that foreign exchange reserves stood at $11.30 billion while Gross Domestic Product valued Rs 14.82 trillion.

Responding to a query about entitlement of 15 percent ad hoc relief with regard to regular, contract and daily wage employees of the government and semi-government corporations, the Advisor said that all those who were getting their salaries from the national exchequer will be entitled to ad hoc relief. He said that levying carbon surcharge on POL products is a permanent feature and to help cut demand. "This will remain intact," he reiterated.

He said that the government would soon complete the National Finance Commission (NFC) Award within the next three months. This will help fair distribution of national resources between Centre and provinces. Tarin said that there was no jugglery of figures in the budget. "The Federal Budget 2009-10 is an open document. We have placed all our budget documents in the media cell of Ministry of Finance to maintain transparency," he added.

The government would pass on to the consumers impact in case oil prices increase along with rates of carbon surcharge on POL products. Although the government has imposed carbon surcharge on CNG, it would remain 35 percent cheaper than POL products and the aim of the government is to ensure use of gas resources wisely.

"Earlier, the CNG price was 58 percent of the POL products prices and now we have raised it from 58 percent of POL products prices to 65 percent of the POL products prices," he said.

The government would collect Rs 134 billion from carbon surcharge on POL products and carbon surcharge on CNG imposed in the budget 2009-10. Rs 122 billion would be collected from carbon surcharge on POL products and Rs 12 billion from carbon surcharge on CNG in next fiscal year 2009-10. Carbon surcharge on POL products will be Rs 8 per litre on high speed diesel oil (HSDO), Rs 10 per litre on motor spirit (petrol), Rs 6 per litre on kerosene oil, Rs 3 per litre on light diesel oil, and Rs 6 per kg on CNG.

He said that out of $1.5 billion Kerry Lugar Bill aid to be received from United States, $1 billion or Rs 80 billion would be spent in terrorism affected 25 percent districts of NWFP, Balochistan and Punjab during 2009-10.

He said NFC issue has been discussed in the special Cabinet meeting and Prime Minister would soon re-constitute Commission to hold detailed negotiations with provinces. Issue of arrears of Net Hydel Profits of NWFP against Wapda would also be discussed during NFC Award negotiations.

He said that power tariff increase would be made in case it was necessary, in gradual manner but not in one go. He hinted that the government would not pass on to the consumers the inefficiencies of public sector entities that are wasting Rs 150 to Rs 200 billion due to their inefficiencies. The government would reduce the line losses of distribution companies to keep the power tariff at reasonable level.

He clarified that Rs 19.4 billion that has been indicated income from privatisation in 2009-10 would mainly come from $700 million remaining PTCL privatisation proceeds that were held up due to the dispute over assets in provinces. He said that the issue has been resolved with the provinces and Etisalat will release to Pakistan the remaining privatisation proceeds soon.


(BRecorder)

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Monday, June 15, 2009

KARACHI: The Indian Tea Board plans to open an Indian tea promotion centre in Pakistan and Egypt with a view to increasing its market share in both the countries.

Sources said on Friday that India is striving hard to boost its tea exports in both prominent CTC tea consuming countries since the disintegration of the Soviet Union.

In the past, India’s largest chunk of tea production was imported by the Soviet Union. However, after losing this biggest market, Indian tea producers are looking for alternate markets such as Egypt, Pakistan and Iran besides UK.

The Pakistani consumers had declined the Indian CTC tea in the first place due to its poor quality. In order to cope with the situation, the delegations of Indian tea board and the Indian tea producers association have visited Pakistan twice lobbying among the tea packers, blenders and local importers.

The Pakistan tea association has however suggested to the Indian exporters to influence the tea packers as they could increase Indian tea component in their blended tea.

Courtesy: Finance.Kalpoint.Com

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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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Monday, June 15, 2009

CAPE TOWN: Companies from the United States and the United Arab Emirates are interested in establishing large farms in Zambia to grow sugar and grains, the southern African country’s agriculture minister said on Friday.

Although a growing number of such land investments elsewhere have proved controversial, Agriculture Minister Brian Chituwo told Reuters Zambia had so much land available there would not be opposition.

He said a US company had offered to invest as much as $200 million in sugar cane production to make ethanol, involving small-scale farmers, but was waiting for proper policies to be put in place.

Chituwo added Zambia had 115,000 hectares of prime land suitable for sugar cane production.

He said a Dubai company was keen to grow rice or wheat.

“They are looking at 200,000 hectares, but we have 900,000 hectares of prime land available so the issue of land really should not be a problem. It is just a question of the mechanics of implementing this,” he told Reuters on the sidelines of the World Economic Forum on Africa in Cape Town. He said Zambia’s lack of exchange controls and the fact that it had lots of land available made it an ideal place for agricultural investment.

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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

Asian stocks rose, set for a fourth- straight weekly gain, on signs consumer spending in the region and the U.S. is improving and after new lending in China doubled.

Li & Fung Ltd., the biggest supplier of clothes and toys to Wal-Mart Stores Inc., jumped 6.2 percent after retail sales in the U.S. and China increased. Aeon Co., Japan’s biggest supermarket operator, soared 8.3 percent in Tokyo as Japanese consumer confidence climbed. China Construction Bank Corp., the nation’s second-largest lender, rose 2.9 percent in Hong Kong as new loans jumped in May. Baoshan Iron & Steel Co. slipped 3.2 percent amid concern new listings in China will flood the market with new shares.

“There is a general sense that the worst has passed,” said Matt Riordan, who helps manage about $3.2 billion at Paradice Investment Management in Sydney. “As things recover in the U.S., people will start buying imported products again, and that also flows through into resources.”

The MSCI Asia Pacific Index gained 0.2 percent to 105.23 as of 7:13 p.m. in Tokyo, the highest since Oct. 2 and bringing its three-day climb to 3.1 percent. The gauge added 1.9 percent on the week, its fourth-straight gain, after Australian consumer confidence jumped by the most in 22 years and fixed-asset investment in China accelerated.

Japan’s Nikkei 225 Stock Average added 1.6 percent, closing above 10,000 for the first time since Oct. 7. Stocks also climbed in South Korea and New Zealand. Australia’s S&P/ASX 200 Index advanced 0.4 percent to the highest since Nov. 10.

Chinese shares fell the most in almost two months after the 21st Century Business Herald newspaper reported the securities regulator will approve initial public offerings as early as this weekend.


(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

LONDON: Sterling hit a 2009 high against the euro on Thursday after a poll showing rising UK inflation expectations and data pointing to economic growth in April and May bolstered the view that the UK economy may be recovering. Sterling rose to around 85.00 pence against the euro according to Reuters data, its strongest since December. The pair's rally helped the pound to scale the year's high against a basket of currencies at 83.8.

Sterling rose broadly after the Bank of England/GfK NOP Inflation Attitudes Survey showed British inflation expectations for the coming year rose to 2.4 percent in May from 2.1 percent in February, the first rise since August. Thursday's data added to a string of fairly firm UK figures this week, which continue to boost the pound. Analysts added that ongoing speculation that the global economy may be starting to recover was also helping to boost demand for higher-risk currencies, a description often attached to sterling.

"All the local economic news is supportive for sterling," said Adarsh Sinha, forex strategist at Barclays Capital in London. He added: "Sterling has been perceived as a risky currency throughout the financial crisis so the better external markets get, sterling will outperform the dollar and the euro."

By 1345 GMT, the euro traded 0.3 percent lower at 85.15 pence, on track to post its fifth day of losses. The pound's trade-weighted index rose to 83.8, its highest since November 2008. Sterling's gains against the euro contributed to its rise against the currency basket, as a majority of that basket comprises euros.

Sterling traded 0.8 percent higher at $1.6475, near the day's high of $1.6493, and taking gains into a fourth day. The pound was well supported against the dollar after the pair broke through its 14-day moving average earlier in the week. On Thursday, the pair traded comfortably above that support level around $1.6180. The pound hit 161.84 yen to the Japanese currency according to Reuters data, its highest since November.


Courtesy: BRecorder

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