Saturday, September 05, 2009
NIT to introduce two new mutual funds
Posted by imdurrani Labels: business finance, finance, Pak Economy, pakistanSBP unveils new scheme for cotton
Posted by imdurrani Labels: business finance, Pak Economy, pakistanSaturday, September 05, 2009
Saturday, September 05, 2009 Gold steadied below $990 an ounce on Friday, consolidating a potent two-day rally that took the market to within a whisker of $1,000, with inflation concerns and jitters over stock market gains stoking investor interest. Buying of gold exchange-traded funds picked up, with holdings of the largest, New York’s SPDR Gold Trust, posting its biggest one-day percentage rise since March. India is a major importer of gold. Visit Finance.KalPoint.Com for latest financial stories...
THE RUPEE: all-round gains
Posted by imdurrani Labels: forex market, forex trading, pakistan, Pakistani Rupee, World Currencies, world forexThursday, September 03, 2009
KARACHI: The rupee retained its firmness against dollar on the currency market on Wednesday, dealers said. On the interbank market the rupee extended its gains, rising 22 paisa versus dollar for buying at 82.70 and rose by 23 paisa for selling at 82.75, dealers said. In the third Asian trading session yen retreated from a seven-week high against dollar and euro, pushed back after economic growth in Australia supported the case for an early rise in rates and powered the Australian dollar higher.
Most regional shares fell as concerns about the financial sector outweighed data showing growth in the US manufacturing sector and dragged Wall Street down, sending the low-yielding yen up against riskier currencies initially.
OPEN MARKET RATES: The rupee managed to gain 30 paisa against dollar for buying and selling at 82.70 and 82.80, dealers said. The rupee also picked up 20 paisa versus euro for buying and selling at Rs 117.15 and Rs 117.65, they said.
Open Buying Rs 82.70
Open Selling Rs.82.80
Interbank Closing Rates: Interbank Closing Rates For Dollar On Wednesday
Buying Rs.82.70
Selling Rs.82.75
(BRecorder)
Thursday, September 03, 2009 KARACHI - The fiscal and budget deficit target set by Ministry of Finance for the year 2009-10 could face some slippages and fail to materialize if the government is proved unsuccessful to tackle the issues of tax administration and electricity subsidies, an analyst showed this concern on Wednesday. Muzzammil Aslam, Head of Research at JS Global, said that IMF would strictly follow the deadlines of performance criteria set in its latest review especially related to taxation and electricity tariffs with an aim to re-balance budgetary deficit. He further said the government has also committed to fulfil the new structural conditionalities within a certain time framework given by IMF however, any difference in real and estimated cost of budget deficit is unlikely to strain IMF program, as Finance Ministry has already taken the performance waiver from IMF in the second review. He also mentioned that the related program commitments have been converted into structural benchmarks for the third review. IMF has further asked Pakistani authorities to introduce a broad-based VAT to correct the structural shortcomings in Pakistan s tax system, which relies on a very narrow tax base. The introduction of a broad-based VAT in mid-2010 is a key pillar of their fiscal strategy. Overall, the financing mix of the deficit was tilted in the favour of domestic (internal) financing, led by Rs 251 billion investment in NSS scheme and Rs 260 billion investments by banks. In revenue, last year will be remembered as the most volatile year in the recent past, as oil prices remained volatile; making an all time high of $147/bbl in July 2008 and a low of $32 in February 2009. While the former has impacted the expenditure side led by huge subsidies and the latter affected the overall FBR tax collection ability. Overall, tax revenue target was missed by fair margin and came in at Rs1.2 trillion (up 14.6 per cent) or 9.2 per cent of GDP. Direct tax collection growth remained dismal and came in at 13 per cent compared to sales tax and excise duty. Both were up 17.3 per cent and 38 per cent respectively. The performance of non-tax revenue sector remained robust and depicted a growth of 44 per cent led by SBP profits and defence income. While the current expenditure rose by 9 per cent and development expenditure remained at Rs 455 billion, lower than the target of 550 billion. The fundamental reason for the containment of current expenditure was the pass down of fuel price subsidy and partly electricity subsidy. However, interest payment has slightly inched up to 637 billion or 4.9 per cent of GDP. The budget deficit for the full-year came in at Rs 680 billion or 5.2 per cent of GDP. Similar to FY08, the bulk of the financing was done through domestic sources. Though the external gross receipts remained higher but the higher re-payment of external debt kept the share of external sources subdued. The majority of the domestic funding came through investments in saving schemes and bank investment in Treasury bill. Visit Finance.KalPoint.Com for latest financial stories...
The fiscal deficit target was missed by 90bps for FY09 if compared to IMF projection, the analyst added.
It is important to mention that the government has estimated budget and fiscal deficits to be stayed at 4.6 per cent and 7.6 per cent of GDP respectively for the current financial year.
It must be recalled that the government has amended by a Presidential Ordinance of the NEPRA Act to ensure monthly determination by NEPRA of the fuel adjustment surcharge in line with international fuel prices, quarterly determination of overall electricity tariffs by NEPRA and notification of the adjusted tariffs within 15 days. Later, by September 15 government s has to take approval for making regulations to form new occupational groups within the FBR and revision of the structure of Regional Tax payer offices and submission of the VAT law to Parliament by end of 2009.Both conditionalities have macroeconomic relevance as in the absence of a de-politicized mechanism for regular electricity tariff adjustments, sizable financial imbalances in the electricity sector are likely to resurface. The adoption of a broad-based VAT is the cornerstone of the revenue effort over the medium term, and a crucial component of the authorities strategy to finance the needed increase in public investment without recourse to external borrowing or crowding out domestic private investment. imilarly, the government has reached a revised agreement with World Bank and ADB staff on a schedule for tariff increases that postpones the elimination of tariff differential subsidies to 2010/11. The budget deficit for the fiscal year 2008/09 (July-June) was 5.2 per cent of gross domestic product (GDP), higher than the government target. The deficit for fiscal year 2008/09 was targeted at 4.3 percent of GDP and was 3.0 percent for the first nine months ending March 31. According to the FY09 fiscal accounts that were released by the Ministry of Finance (MoF), MoF reported a deficit of 2.2 per cent of GDP in the 4QFY09 alone. The extra-ordinary deficit for the last quarter was led by aggressive development spending of Rs 210 billion, as a result of which, the total expenditure came in at Rs455bn in FY09.
Thursday, September 03, 2009
Yen and dollar rise
Posted by imdurrani Labels: Asia, forex trading, US, World Currencies, world finance, world forex
The decline came despite upbeat economic news from the United States and euro zone as well as a stabilisation in Chinese shares after a rout on Monday. The hedge fund talk "is a huge driver" of currency markets, said Dan Cook, senior market analyst at IG Markets Inc in Chicago. "When you have data like we had but the Dow drops, people are running for that safe haven." In late afternoon trading in New York the dollar index, which tracks a basket of six major currencies, was up 0.7 percent at 78.747, rebounding from a session low of 77.944, according to Reuters data.
The dollar was down 0.1 percent against the yen at 92.89 yen, above Monday's seven-week low of 92.53, according to Reuters data. But the yen was up 1 percent against the Canadian dollar, 0.7 percent against the Swiss franc, 0.9 percent against the euro and 0.8 percent against the pound. The euro was down 0.8 percent against the dollar at $1.4212, well below a session high of $1.4377.
The US manufacturing sector expanded in August for the first time in more than a year and a half. The Institute for Supply Management's index of national factory activity rose to 52.9 from 48.9 in July. Separate data showed pending sales of previously owned US homes raced to a two-year high in July, further evidence the housing market was on a steady recovery path.
"Clearly, the US data is surprising to the upside," said Jack Iles, senior portfolio manager who helps manage $2.5 billion assets at MFC Global Investment Management in Boston. But despite a batch of upbeat US economic numbers, major currencies remained in ranges as investors continued to debate about the outlook for the global economy, analysts said.
Thursday, September 03, 2009
"Pakistan's inflation rate came from 25 percent to 11 percent, its forex reserves position is better and fiscal side is also somewhat stable, despite challenges," said Adnan Mazarei, Assistant Director, Middle East and Central Asia Department of the IMF, who also heads the IMF review missions. Pakistan remittances were 19.13 percent in July at $747.22 million and maintained a similar trend in last few months.
Pakistan received $22.6 million in July in foreign private investment from developed countries though $26 million were repatriated by Developing Asia. The IMF in its report has envisaged a growth rate of 3 percent for the current year, which was at 2 percent in 2008-09. Foreign portfolio investment is a sign of sentiments while FDI is more important but this improvement signals somewhat betterment in sentiment of investors towards Pakistan.
However, Adnan did not shy away from counting challenges the country is facing now - revenue mobilisation, the key issue for the country which also creates room for social sector spending which is badly hurt in the country, believed probably the most optimistic observer of Pakistan economy in the IMF. "Pakistan's tax revenues are among the lowest in the world right now and any improvement in it will allow spending on health, education and infrastructure," said Adnan.
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