Category - Business News

Ogra makes fuel dearer by up to 5pc
Pakistan expects rice order from Indonesia
Asian stocks edge up, euro stalls as caution prevails
Only ECB has power to ‘scare’ global stock markets, warns IMF
Top Pakistani businessmen attend conclave in Nepal
FBR extends date for filing of Tax Returns

Ogra makes fuel dearer by up to 5pc

ISLAMABAD: Oil & Gas Regulatory Authority finally made official an up-to-five-percent rise in petroleum products early Saturday morning with immediate effect, Geo News reported.

Compared to September prices, petrol has been raised by five per cent and high octane blending component (HOBC) by Rs2.72/liter owing to a jump in global crude market.

Despite a drop in high-speed diesel (HSD) by Rs0.62 worldwide its local prices were jacked up by Rs1.51/liter to adjust petroleum levy.

Diesel price jumped to Rs94.16/liter from an earlier Rs92.65. HOBC price hopped by Rs112.65/liter from Rs109.93/liter last month, and petrol Rs88.95/liter from a previous Rs84.80/liter.

Prices of light diesel oil (LDO) and kerosene oil kept status quo to remain at Rs83.52 and Rs86.82/liter respectively

Pakistan expects rice order from Indonesia

Pakistan expects Indonesia to place orders for its rice in coming days, said Irfan Ahmed Sheikh, the outgoing chairman of the Rice Exporters Association of Pakistan (REAP), as the Southeast Asian country seeks alternative sources of the grain.

“There will be a potential for Pakistan in coming days. We are expecting orders from Indonesia,” Sheikh told Reuters on Thursday, but added that the Indonesian side has not approached them yet.

“We are one of the cheapest sources and we have a natural edge. Our IRRI-6 prices on average are less than $500 a tonne, FOB.”

The price of Thailand’s benchmark export-grade rice was $627 a tonne this week, up from $619 last week, exporters said on Thursday, ahead of a government intervention scheme likely to push the price further up from next month.

And Vietnam’s rice export prices rose nearly 1 per cent on Thursday, with the 5 per cent broken grade hitting $575 a tonne and heading towards $580, the highest in more than three years.

Indonesian Trade Minister Mari Pangestu said on Wednesday the country has alternative sources of rice from Pakistan, India and Vietnam, even as it tries to iron out the reported cancellation of a proposed Thai government sale to Indonesia.

Sheikh said Indonesian officials had approached Pakistani commerce ministry about three months ago for a government-to-government deal but were told to go to the private sector.

Commerce Ministry officials were not immediately available for comment. REAP handles the bulk of rice exports from the South Asian country.

Heavy monsoon rains have caused little damage to Pakistan’s rice crop and traders are expecting output of up to 6.5 million tonnes. Pakistan, the world’s fifth-largest rice exporter, is hoping to export 4.5 million tonnes of rice in the 2011/12 (July-June) fiscal year

Asian stocks edge up, euro stalls as caution prevails

Asian stocks edged higher and a rally in the euro stalled on Wednesday, as investors looked for more signs that European leaders were tackling a debt crisis that threatens the financial system before committing bolder market bets.

Oil and metals fell and the dollar rose as a rebound in riskier assets ran out of steam and money managers sought safety in the U.S. currency amid signs that a deal on beefing up the euro zone’s rescue fund still faced major hurdles.

Plans to increase the financial firepower of the euro zone’s 440 billion euro rescue fund face opposition in Germany, while a Financial Times report said that a split had opened up within the currency bloc over the terms of Greece’s next bailout.

Japan’s Nikkei rose 0.2 percent, while MSCI’s broadest index of Asia Pacific shares outside Japan gained 0.1 percent. The tech sector was the best performer in the MSCI index, with the defensive telecoms and utilities sectors performing worst.

U.S. stocks rose a little more than 1 percent on Tuesday, with a sharp pullback late in the session from stronger gains underlining the fragility of sentiment. S&P 500 futures traded in Asia fell 0.5 percent, pointing to a weaker start on Wall Street later.

Turbulence on global markets since late July has been driven by investors’ twin fears of renewed recession in the United States and the chaos that Europe’s sovereign debt crisis could inflict on the financial system if it continues unchecked.

Expectations have risen among market economists that Greece will be forced soon to default on its massive debts, with uncertain consequences for both the exposed European banking sector and other struggling euro zone nations.

There is also concern that, while Europe’s rescue vehicle has been able to cope with bailing out Greece, Portugal and Ireland, its resources would be overwhelmed if a bigger nation such as Italy or Spain were to need help.

Only ECB has power to ‘scare’ global stock markets, warns IMF

The International Monetary Fund has warned that the immense firepower of the European Central Bank (ECB) would be needed to “scare” the financial markets and prevent an intensification of the turmoil threatening to send the global economy back into recession.

With investors poised to give their verdict on the weekend talks in Washington of finance ministers and central bank governors, European policymakers insisted that fresh moves to boost the fighting fund to support struggling eurozone members were in the offing.

Brussels has a deadline of the Cannes G20 summit in early November to flesh out its proposals but is waiting for a key vote in the German parliament this week on the expansion of the European Financial Stability Facility (EFSF) before deciding how best to turn the €440bn (£380bn) pot of capital into a €2tn war chest.

“We need to find a mechanism where we can turn one euro in the EFSF into five, but there is no decision on how we could do that yet,” one senior European official said. Some European countries, including Germany, are sceptical about using the ECB to provide the leverage but the International Monetary Fund (IMF) insisted there was no alternative.

Antonio Borges, head of the IMF’s European division, said: “It is very important that we see a combination of the ECB and the EFSF. Anyone who thinks that the EFSF will be a miraculous solution to the problem is making a very big mistake.

“The ECB is the only agent which can really scare the markets.”

Privately, many officials at the IMF and in its 187 member governments accept the inevitability of a Greek default and now see the priority as preventing the two much bigger economies of Italy and Spain being dragged down.

Greece’s finance minister, Evangelos Venizelos, said Greece would not default before talks with the IMF about the next €8bn instalment of its rescue package due next month. Sources in Washington said Greece would get the money in the hope that Europe would buy itself enough time to piece together a convincing anti-contagion strategy. The likeliest time of a Greek default is thought to be in late 2011 or early 2012.

On Sunday night, German chancellor Angela Merkel said she would not rule out letting a eurozone country default on its debts once the currency union has its permanent rescue fund, the European stability mechanism (ESM), in place.

In an hour-long interview with ARD television, Merkel underlined the importance of an expanded mechanism to prevent future crises spilling over into other nations. She said that once the ESM is in place, “I don’t exclude that we at some point … that one could do the insolvency of a state just as of banks.” The ESM is currently slated to start in 2013.

The chancellor also said a permanent structure would allow other European partners to set up a “barrier” around Greece to prevent a domino effect on other nations.

Prices of shares and commodities plunged last week as dealers took fright at Europe’s intensifying debt crisis and signs of a marked slowdown in the world economy. The managing director of the IMF, Christine Lagarde, said the world was in a “very dangerous place” while the president of the World Bank, Robert Zoellick, said there was a risk of the contagion spreading to emerging economies, which have been performing more strongly than the rich western nations. “The numbers emerging out of developing countries over the past month are shaking and shaky,” Zoellick said.

European policymakers in Washington responded to pressure from the US, Britain and emerging country members of the G20 group. Brazil’s finance minister, Alexandre Tombini, said his country’s experience showed the need to act with “overwhelming force”, while Tim Geithner, the US treasury secretary, said: “Decisions as to how to conclusively address the region’s problems cannot wait until the crisis gets more severe.”

Justine Greening, economic secretary to the Treasury, said Britain had been urging Europe to get to grips with the crisis for several weeks. “I think we’ve had some positive steps taken this weekend towards the eurozone being able to do that in terms of both recapitalising the banks in Europe that are under stress but also [by] putting in place a bailout fund that is big enough to give confidence to the markets,” she said.

Olli Rehn, Europe’s commissioner for economic and financial affairs, said the eurozone needed to do more. “We need to build a bridge and I think this bridge will be developed on the basis of the current reform of the EFSF and as one part of that next stage we are contemplating the possibility of leveraging the EFSF resources to have more firepower and thus have a stronger financial firewall to support our member states doing the right thing.”

One option to increase the potency of the EFSF currently under discussion would be for the ECB to commit large amounts of funding, with the capital in the EFSF used to cover potential losses.

German finance minister, Wolfgang Schäuble, said he was open to the idea of leveraging Europe’s rescue fund but said that did not necessarily mean the ECB should provide the extra firepower.

Mohamed el-Erian, co-chief investment officer of the giant bond fund Pimco, said: “It is encouraging that … European officials are signalling a better appreciation of the depth and potential consequences of the crisis.

“Now they need to translate this into decisive actions underpinned by a common vision of what they want the eurozone to look like in five years’ time.”

Almost from the moment the €440m EFSF was created it was deemed too small. Hence all the talk now about how to enlarge the bailout fund to convince the markets that Europe has the firepower to contain the crisis. But the problem is that the countries that need to contribute to the EFSF either cannot afford to put in more cash or lack the political support. So ideas are now being conjured up to make it bigger without putting up more money – to turn one euro into five, as one EU source put it. Analysts at Credit Suisse say one idea would be to turn the EFSF into a bank to enable it to use bonds it has bought from troubled countries in exchange for fresh funds at the ECB. Credit Suisse acknowledges this might look like a “story of a leveraged hedge fund” and would mean that countries such as France contributing to the EFSF might find their AAA rating under threat. They think a better idea would be to enlarge the EFSF and lend a third of the funds to governments to buy bonds, a third to recapitalise the banks and the rest to create an EFSF bank.

Top Pakistani businessmen attend conclave in Nepal

ISLAMABAD: A delegation, comprising about 80 top businessmen has been attending the 4th SAARC Business Leaders Conclave (SBLC) in Nepal.

The event started on September 20 and would conclude on Thursday September 22, said a statement received here.

The Conclave is aimed at promoting trade and business activities among the member countries as well as to share the expertise to improve the living standards of the people and alleviate poverty from the region.

The theme of this year’s conclave is “Peace and Prosperity through Regional Connectivity”.

The business conclave is being organized by the SAARC Chamber of Commerce and Industry in-collaboration with Federation of Nepalese Chamber of Commerce and Industry.

The conclave would have ministerial session, session on water and energy, climate changes, food security, business leaders session and women leadership for regional business opportunity.

About 100 businessmen from Bangladesh and from SAARC member countries are attending the business conclave where as prominent economist and policy makers across the world are also participating in it.

FBR extends date for filing of Tax Returns

ISLAMABAD: Federal Board of Revenue (FBR) has extended the dates for filing of Sales Tax and Federal Excise Returns for the months of July and August, till September 26.

According to an official announcement issued here on Tuesday, the Inland Revenue Wing of the FBR has communicated to all Chief Commissioners of LTUs and RTOs, the extended date.

This extension of date is for the months of July and August 2011, and is applicable to all registered persons.

This extension has been given in exercise of the powers conferred under section 74 of the Sales Tax Act 1990 and section 43 of the Federal Excise Act 2005, the statement added.

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