Friday, June 19, 2009

ISLAMABAD: Austrian Ambassador, Dr Michael Stigelbauer on Thursday called on the Minister for Water and Power, Raja Pervez Ashraf and discussed various matters of mutual interest and possibilities of investment and technical co-operation in water and power sector.

The Minister briefed the current energy situation and the measures being taken to meet the future water and power requirements. He gave him details of the water and power sector projects being initiated by the present government. He said that the government had planned to change its energy mix and now focusing on hydel, coal, wind and solar generation to provide cheaper and reliable power to the consumers.

He said that the government would welcome the Austrian investment and facilitate the investors. The Ambassador said that Austrian companies already working in Pakistan in energy sector were keen to expand their business while the new ones were also interested in this sector.

In this connection, Austria will hold a conference in Vienna in July next, which will further strengthen the co-operation with Pakistan in the field of energy. He said that this moot would provide a good opportunity of exploring and discussing ways and means to further strengthen economic co-operation between Pakistan and Austria.

He extended an official invitation to the Minister in this regard on behalf of the Austrian Minister for Economy. The Minister thanked the Austrian Ambassador and said that this initiative of the Austrian business community for Pakistan will supplement the economic and bilateral relations. He said that Pakistan will participate in Vienna conference being organised for it and will get benefit the Austrian expertise in the hydropower generation.-PR


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Friday, June 19, 2009

KARACHI: The rupee adopted divergent trend against dollar on the currency market on Thursday, dealers said. On the interbank market the rupee gave up gains in relation to dollar, losing eight paisa for buying and selling at 81.13 and 81.18, they said.

Huge payment requirement pushed dollar up against the rupee and this trend may maintain in the near future, they said. During the fourth Asian session dollar was steady against euro, hovering near lows struck the previous day after tame US inflation data further dampened speculation the Federal Reserve would raise interest rates by year end.

Earlier this month the market had fully priced in an increase in US interest rates by the end of the year after improving economic data, pushing the dollar up broadly and to a one-month high versus euro earlier this week.

Open Market Rates: The rupee appreciated in terms of the US currency gaining 20 paisa for buying at 81.00 and 10 paisa for selling at 81.20, they said. The rupee, however, drifted lower against euro, losing 50 paisa for buying at Rs 112.50 and Rs 113.50, they said.

Open Buying Rs 81.00
Open Selling Rs 81.20

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

Buying Rs 81.13
Selling Rs 81.18

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Friday, June 19, 2009

ISLAMABAD: The government on Thursday withdrew the decision of levying carbon surcharge on Compressed Natural Gas (CNG) by deleting the word "carbon" from the head of the levy. Now "surcharge" will be used for taxing petroleum products from the next financial year ie 2009-10 after severe drubbing from different quarters.

Prime Minister Syed Yousuf Raza Gilani announced in the National Assembly to withdraw the decision of imposing carbon surcharge on CNG and directed the Finance Minister to review the levy as a whole taking into account other petroleum products.

Speaking in the National Assembly, the Prime Minister said that the government has withdrawn carbon surcharge on CNG worth Rs 12 billion and "I have directed the Ministry of Finance to review the decision of carbon surcharge and come up with a transparent taxation mechanism."

On the occasion, majority of members in the National Assembly lauded the decision of the government and hailed the Prime Minister's view to look into what the members termed anti-poor tax. The government has recently introduced carbon surcharge in the budget 2009-10, which was widely criticised by the lawmakers of both the Houses of the Parliament.

Majority of the opposition lawmakers were of the view that the decision to impose carbon surcharge was taken to counter the verdict of the Supreme Court that directed the government to reduce petroleum prices in line with global price mechanism.

Meanwhile, Advisor to Prime Minister on Finance Shaukat Tarin informed the Senate standing committee on finance that the government had taken the decision to exempt the CNG industry from the carbon surcharge.

Members of the committee demanded exemption of the kerosene oil from the carbon surcharge. But the advisor said that the government feared adulteration of kerosene oil with other petroleum products if the government exempted it from the surcharge.

The government has taken this decision after members of the Senate body on finance on Wednesday strongly criticised carbon surcharge saying it was to be imposed for friendly environment but use of CNG had no chance of polluting environment.

Analysts are of the view that after exempting CNG from carbon surcharge and its possible imposition on petroleum products would result in price differential that would lead to increase in sale of CNG. CNG dealers are criticising the government to maintain reasonable difference between prices of CNG and petroleum products. Government has targeted collection of carbon surcharge on petroleum products at Rs 122 billion in next financial year ie 2009-10 that would possibly be used to bridge the budget deficit, one analyst said.


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Friday, June 19, 2009

FRANKFURT (updated on: June 18, 2009, 21:24 PST): Germany might have to take on 310 billion euros (432 billion dollars) in debt by 2013, according to finance ministry documents cited on the Internet site of the magazine Der Spiegel. For 2010, the ministry's medium-term financing plan has pencilled in 86 billion euros in new debt, a record compared with the roughly 48 billion euros forseen for this year. Another 72 billion euros would be added in 2011, 59 billion euros in 2012 and 45 billion euros in 2013 to reach the total, according to the documents consulted by spiegel.de. In 2008, the government took on 11.5 billion euros in new debt to balance its budget as it sought to pull the economy out of the worst recession since 1945. This year, Germany's public deficit will probably reach 4.4 percent of gross domestic product, Finance Minister Peer Steinbrueck told a panel discussion in Berlin on Wednesday. Under the European Union's Stability and Growth Pact, eurozone governments are supposed to run deficits of no more than 3.0 percent of GDP and to work towards a balance or even a surplus in times of economic growth. The European Commission, which polices EU countries' deficits, forecasts that 13 out of the 16 euro countries will break the three-percent rule in 2009 and 2010. German government spending next year is expected to reach a record 328 billion euros owing to economic stimulus packages needed to fight the global economic crisis, Der Spiegel said. The labour ministry's budget, which covers unemployment payments, is set to become the biggest spending item again at 153 billion euros. Receipts of 28 billion euros per year are expected as a result of privatisations but according to the report, the government no longer has enough holdings to generate such a sum. Germany's general elections scheduled in late September are likely to result in a whole new set of figures, Der Speigel added. (AFP)

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Friday, June 19, 2009

LONDON: The dollar fell against the euro Thursday after better-than-expected US data bolstered investor confidence in the outlook, prompting a switch into higher risk assets, dealers said.

During the worst global slump since the 1930s, investors have been buying into the dollar on the basis that even if the US economy is at the epicentre of the crisis, it remains the most powerful and largest in the world, they said.

This traditional safehaven status of the dollar, however, can be less attractive if data suggests the economy is picking up, offering wider investment opportunities in currencies considered riskier than the greenback.

The dollar had been firmer in recent days after weak US statistics sparked doubts about recent signs of an improvement in the economy. But the trend changed direction Thursday on the latest figures.

In late London trade, the European single currency was at 1.3963 dollars, off early lows and up from 1.3943 dollars in New York late on Wednesday. At one point, the euro broke resistance at 1.40 dollars but then fell back.

Against the Japanese currency, the dollar rose to 96.23 yen from 95.71 yen on Wednesday.

Earlier, the Conference Board said its May index of leading economic indicators, a measure of economic conditions in the coming months, rose 1.2 percent from April, beating forecasts for 1.0 percent.

The index, which had been on a downward trend since hitting a peak in July 2007, "has risen sharply in the past two months amid widespread strengths among its components," the Conference Board said.

"With these large and extensive increases, the six-month change in the index has become positive for the first time" since April 2007.

At the same time, US new jobless claims rose marginally last week -- to 608,000 from a revised 605,000 -- while the four-week moving average continued to drop and continuing claims fell sharply.

"This week's claims data provided among the clearest signals yet that labor market contraction is easing," said Andrew Gledhill at Moody's Economy.com.

Dealers said the dollar was also pressured after US inflation data on Wednesday suggested that the US Federal Reserve will be very unlikely to raise interest rates for some time.

In London trade on Thursday, the euro was changing hands at 1.3963 dollars against 1.3943 dollars late on Wednesday, at 134.32 yen (133.44), 0.8545 pounds (0.8499) and 1.5096 Swiss francs (1.5055).

The dollar stood at 96.23 yen (95.71) and 1.0816 Swiss francs (1.0795).

The pound was at 1.6336 dollars (1.6401).

On the London Bullion Market, the price of gold rose to 940.50 dollars an ounce from 930.50 dollars an ounce late on Wednesday.


(AFP)

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Friday, June 19, 2009

LONDON (updated on: June 18, 2009, 22:17 PST): European stock markets edged higher Thursday after a key US indicator suggested that recovery in the world's leading economy could be taking hold. The London FTSE 100 index added 0.06 percent to close at 4,280.86 points while in Paris the CAC 40 rose 1.04 percent to 3,194.06. The Frankfurt Dax gained 0.78 percent to end the day at 4,837.48. Elsewhere there were gains of 0.82 percent in Brussels, 1.11 percent in Milan, 1.41 percent on the Swiss Market Index and 1.09 percent in Madrid. In mid-day trading on Wall Street the Dow Jones Industrial Average was up 0.81 percent at 8,565.88 while the tech-heavy Nasdaq was moving in the opposite direction and was down 0.27 percent at 1,803.11. The stronger trends reflected investor response to the US Conference Board's index of leading indicators, a measure of economic conditions in the coming months. The board said its May reading rose 1.2 percent from the prior month, eclipsing market expectations for a gain of 1.0 percent. The Conference Board noted that its index had increased in April for the first time in seven months, by a revised 1.1 percent. The index, which had been on a downward trend since hitting a peak in July 2007, "has risen sharply in the past two months amid widespread strengths among its components," the board said. "With these large and extensive increases, the six-month change in the index has become positive for the first time in two years," since April 2007. US authorities expect the world's largest economy to resume modest growth in the second half of the year after sliding into recession in December 2007. The Federal Reserve forecasts the US economy will contract between 1.3 to 2.0 percent in 2009 and post modest 2.0 to 3.0 percent growth in 2010. In other news deemed positive for market sentiment, the US Labor Department reported that initial claims for unemployment insurance benefits rose to 608,000 in the week that ended June 13, surpassing analysts' forecasts of 604,000 new claims. But the report nonetheless showed a surprise decline in the number of continuing jobless claims from the prior week's all-time high. "This is still a disconcertingly high level of continuing claims, but in terms of this series it qualifies as relatively good news today since it marks the first decline in continuing claims since the week of January 3," said Patrick O'Hare of Briefing.com. "It is clear now that the pace of layoffs has slowed. It is also quite clear that the labor market can still be considered weak despite that consideration." In Paris leisure group Club Mediterranee gained 6.93 percent on news that financier Bernard Tapie had bought a stake of just over 1.0 percent. European aerospace giant EADS added 1.38 percent after Hungarian low cost airline Wizz Air signed a draft agreement to buy 50 medium-haul planes from EADS aircraft unit Airbus. The order would have a catalogue price of 3.8 billion dollars. Tyremaker Michelin moved in the opposite direction, shedding 1.73 percent. Company head Michel Rollier warned that the tyre market was unlikely to pick up before the middle of next year. In Frankfurt energy group EON rose 2.31 percent, Deutsche Telekom 2.89 percent and Deutsche Bank 3.45 percent on upbeat assessments of global economic prospects. But BASF, the world's leading chemicals group, fell 1.02 percent. Company boss Jurgen Hambrecht insisted there was still no reason to assume that the worst of the global economic crisis had passed. Earlier Thursday in Asia, Tokyo closed down 1.39 percent as exporters were hit by a stronger yen, dealers said. (AFP)

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Friday, June 19, 2009 ISLAMABAD (updated on: June 18, 2009, 22:38 PST): The Government of Pakistan has signed an MoU, with the Government of China on Thursday to reconstruct and rehabilitate three major cities of AJK destroyed in the 2005 earthquake, under AJK Urban Development Programme. The umbrella contract for this project has already been signed between ERRA and the Two Chinese Construction Companies. In order to assist the Government of Pakistan to complete the development work in the earthquake affected areas of Muzaffarabad, Bagh and Rawalakot, the Government of China offered credit worth US$ 300 million, whereas the Government of Pakistan contributed additional US$ 53 million to complete various reconstruction projects under AJK Urban Development Project. For smooth and effective implementation of MCDP, a Steering Committee” has been constituted under the Deputy Chairman ERRA Lt. Gen Sajjad Akram, which has the mandate to give policy direction for Project Implementation and ensure timely and effective coordination of all inputs. The contract signing is in line with ERRA’s Mission of “Build Back Better”. The AJK Urban Development Programme aimed at providing safe housing, improved city environment, modern physical and social infrastructures with the target to boost economic and social growth in the Earthquake affected areas. For Muzaffarabad City, an amount of US$ 190.62 million has been allocated for completion of 90 projects. In Bagh 50 projects worth $ 123.55 million and in Rawalakot city, 30 projects with a cost of US$ 38.83 million will be completed in the next 4 and half years. These projects will provide all modern day facilities including construction of Government buildings, roads bridges, shopping centers, Satellite towns, play grounds, parks, education and health facilities, wholesale markets, slaughterhouses, transport terminals, neighborhood centers, designing and Laying of infrastructure facilities like water supply, sewerage, underground electricity and telecom cables. These facilities will be developed by Chinese Companies. (APP)

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Friday, June 19, 2009

SINGAPORE: Oil prices lingered above 71 dollars a barrel in Asian trade Friday spurred by hopes that the worst is over for the ailing global economy, analysts said.

New York's main futures contract, light sweet crude for delivery in July, gained nine cents to 71.46 dollars a barrel.

Brent North Sea crude for August delivery advanced 15 cents to 71.21 dollars.

"I think the general mood is that we're past the worst of the downturn," said Mark Pervan, a senior commodities analyst with ANZ Bank in Melbourne.

"It continues to be a pre-emptive market in a sense that they are pricing on positive news."

Positive US data and stronger energy demand energised the market, analysts said.

The US Department of Energy reported a sharper-than-expected fall in crude inventories last week.

On Thursday, a US business research firm said the index of leading economic indicators, a measure of conditions in the coming months, increased 1.2 percent in May from the previous month, beating market expectations.

The index had been on a downward trend since hitting a peak in July 2007, the Conference Board said.

Developments in the recession-hit US economy are closely monitored because it is the biggest in the world and is a major buyer of the world's exports.

Pervan said crude prices were also closely pegged to the value of the US dollar, which has been under pressure.

"I think there's still a high correlation with the dollar... instead of on market fundamentals like supply and demand," he said.

A weaker US currency makes dollar-priced crude cheaper for buyers holding stronger currencies. That tends to stimulate demand and push the market higher.

After plunging from record highs above 147 dollars last July on supply concerns, oil prices touched multi-year lows of around 32 dollars in December as the economic slowdown crushed demand for energy but they have slowly clawed back since.


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