profitepaper pakistantoday 05th November, 2012

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Monday, 5 November, 2012

Seafood exports up 7.22% to reach at $63.364m in 1st quarter

ISLAMABAD

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APP

hE exports of fish and fish preparations from the country witnessed increase of 7.22 percent during the first quarter of the current fiscal year as compared to the corresponding period of last year.

The exports of fish and fish preparations were recorded at US$63.364 during July-September (2012-13) as compared to the exports of US$59.096 million during July-September (2011-12), according to the data of Pakistan Bureau of Statistics (PBS).

In terms of quantity, the exports of fish and fish preparations increased by 11.39 percent during the first three months of current year.

As much as 26,281 metric tons of fish was exported during the first quarter against the exports of 23,593 metric tons during the same period of last year, the data revealed.

During the month of September 2012, the exports of fish and fish preparations witnessed increase of 17.13 percent when compared to the exports of the same moth of the last year.

The exports of fish and fish preparations were recorded at US$31.422 million in September 2012 against the exports of US$ 26.844 million recorded during September 2011.

As compared to the exports of US$14.153 million in August 2012, the exports in September surged by 122.44 percent in September 2012, the PBS data revealed.

It is pertinent to mention here that the overall food exports from the country decreased by 11.54 percent during the first quarter of the current fiscal year.

The over all food exports were recorded at US$878.680 million in the quarter under review against the exports of US$993.352 million during the same period of last year.

The overall exports from the country witnessed positive growth of 4.26 percent while the imports decreased by 2.37 percent during the first quarter, indicating a positive trends in the overall trade volume of the country.

Exports from the country during July_September (2012 _13) were recorded at US$6.187 billion against the exports of US$5.934 billion during the same period of last year.

On the other hand, the imports into the country decreased from US$11.117 billion last year to US$10.853 billion during the current fiscal year, the data revealed.

Based on these figures, the overall trade deficit has been recorded at 9.9 percent as it shrunk reduced from the deficit of US$5.183 billion last year to US$4.666 this year.

Economists say jobs data to have little impact on US polls Stronger-than-expected hiring by US employers in October and a small increase in the jobless rate will have a neutral or insignificant impact on US presidential elections next week, according to most economists surveyed in a poll NEW YORK AGENCIES

Twenty-four economists said the payrolls data would have a “neutral” impact on next Tuesday’s elections, while 15 said the data would have an insignificant impact. Ten economists said the data would have a significant impact, while four said it would have a very insignificant impact, and one said it would have a very significant impact.

The government said on Friday employers added 171,000 jobs last month, up from 148,000 in September. The unemployment rate in October edged up, however, by onetenth of a point to 7.9 percent.

The boost in hiring was seen as a hopeful sign for a lackluster economy that has been a drag on Democratic President Barack Obama’s re-election bid. Republican rival Mitt Romney has often pointed to persistently high unemployment as a failure of the Obama presidency.

“The reality is you had a mixed report from a mainstream media perspective. Sure you had better job gains, but the unemployment rate picked up as well,” said Jacob Oubina, economist at RBC Capital

Markets in New York.

“There are countervailing forces so the average voter might see a more nuanced result here,” he said.

Separately, the median of forecasts from 45 economists was for the gigantic storm Sandy, which devastated New York City and the New Jersey coast early this week, to knock 0.2 percentage points off of fourth-quarter gross domestic product. Forecasts for the impact on GDP ranged from subtraction of 0.5 percentage points to adding 0.5 percentage points.

Many economists cautioned, however, that the entire extent of the storm’s damage was not fully known, and estimating its impact on growth was a dubious business at such an early stage. Also, the me-

dian of forecasts from 46 economists in the poll was for the Federal Reserve’s latest round of stimulus, known as QE3, to eventually total $615 billion. The median in a similar poll conducted October 5 was for QE3 to total $600 billion.

Under QE3, which was announced in September as an openended program, the Fed is buying about $40 billion per month of mortgage-backed securities. Within the poll, primary dealers - the large financial institutions that do business directly with the Fed - are looking for an even larger QE3 stimulus program. The median of forecasts from 15 of the 21 primary dealers was for QE3’s eventual size to reach $1 trillion.

ICCI urges govt to build businessmen confidence ISLAMABAD: A delegation of Gujrat Chamber of Commerce and Industry (GCCI) led by its President Mr.Adnan Iqbal visited Islamabad Chamber of Commerce and Industry (ICCI) for congratulating Mr. Zafar Bakhtawari on his appointment as President of ICCI. Speaking on the occasion, Zafar Bakhtawari, President ICCI emphasized on strong networking among the Chambers and business associations for effective advocacy on common issues, which are badly affecting the growth of business activities in the country. he further said that Chambers and associations must also strengthen relations with each other on regional basis to work together to address highlighted issues. Mr.Bakhtawari said that countries around the world are promoting regional trade to strengthen each other economy and to improve the living standard of the people, therefore, our Government should further build economic relations with its neighbouring countries to help accelerate businesses in these countries. he said that for policy reforms business associations must sit together and give recommendation for its remedial solutions. ICCI President said that facilitating the growth of private enterprises would create multiple benefits for the economy as it will improve productivity, trade, exports, employment and revenue generation for the country. Mr.Adnan Iqbal, President GCCI invited ICCI team to visit GCCI and the informed the meeting about various initiatives taken by GCCI for development of Gujrat industrial Zone and said that Government should establish industrial zones in all big metropolitan of Pakistan. ONLINE

WALL STREET WEEK AHEAD

Obama’s shoes hard to fill, even for himself Regardless of the results of Tuesday’s US presidential election, the next four years will be a tough act to follow from Wall Street’s vantage point NEW YORK AGENCIES

The benchmark Standard & Poor’s 500 Index .SPX.INX has rallied 66 percent since President Barack Obama took office - one of the most impressive runs ever for stocks under a single president. Admittedly, the timing of his inauguration - just before the market hit a nadir in March 2009 - is part of the reason.

The national polls show a tight race between Obama and his challenger, Republican candidate Mitt Romney, but leaning toward a win by the president.

“The market might like the fact of an Obama win since it would mean less uncertainty,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research, in Cincinnati.

Strategists have said the market’s pattern of late also suggests status quo an Obama win. A “Romney rally” is a 1in-3 possibility, taken betting site InTrade’s odds of an Obama win at about 67 percent right now. Other prognosticators put his chances of re-election even higher.

The most recent Reuters/Ipsos tracking poll shows both candidates garnering 46 percent of the vote - but polling averages

show Obama with small but critical leads in swing states Ohio, Virginia and Iowa.

There’s a conventional line that says a victory by longtime businessman Romney would be better for the equity market, given his predilection for fewer regulations and lower corporate tax rates.

Still, any move in the market, no matter the outcome, is likely to be limited.

“I think the market has priced in an Obama victory, but no matter what, any knee-jerk reaction after the election will unwind over the next few days,” said Joseph Tanious, a global market strategist at J.P. Morgan Funds, in New York.

“The fiscal cliff is also on everyone’s mind, but that will really take hold after the election, since the winner could indicate what happens.”

Strategists at LPL Financial have been tracking two baskets of stocks to judge whether the market believes Obama or his challenger Romney will emerge with a win. The “Obama” stocks include health care facilities companies, food and staples, utilities, construction companies and homebuilders. The “Romney” stocks include financials, coal stocks, oil and gas drillers, telecom, and specialty retail names.

The Obama index peaked in early Oc-

tober, before the first debate, largely seen as being won by Romney. Yet in terms of “relative strength,” the index still modestly favors the president.

CHANGE AT THE FED?: The move in the market during Obama’s administration was in part due to timing as the U.S. economy started to recover from the deepest recession since the Great Depression. The U.S. Federal Reserve has used three rounds of asset purchases, one of which is under way, as a way to keep interest rates low and stimulate the econ-

omy as the recovery from the 2007-2009 recession has been painfully slow.

Romney has criticized the Fed’s policy and is seen replacing Chairman Ben Bernanke with someone more likely to tighten monetary policy.

“With Romney, we’d expect a little more weakness off the gate. he might want to put a stop to the Fed’s stimulus.

That’s where that uncertainty comes in,” Detrick said.

The Fed’s current policy stance is seen as helping Obama. Consumer confi-

dence recently rose to a more than 4-year high, and housing prices are rising again. however, unemployment remains at 7.9 percent nationwide, and the lack of good jobs is constraining growth.

LOOKING AHEAD: Regardless of the winner in Tuesday’s election, the market will have one less uncertainty to deal with. It will shift its focus to the roughly $600 billion in mandated spending cuts and tax increases that could kick in next year and send the U.S. economy reeling if a deal to prevent it is not reached.

The possibility of a new recession - if Congress fails to agree on how to avoid the cliff - has many market participants counting on resolution, with the election as a variable in terms of when any legislation will pass - not if it will happen.

The end result in both an Obama or a Romney presidency would be a deal. But the status quo would probably mean a more protracted solution and market volatility, according to Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, in Menomonee Falls, Wisconsin. “From an investing standpoint, what I care more about is the likelihood of getting some sort of deal to avoid the tax increases and spending cuts at the end of the year,” he said.

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Business 02 Reversal of fortunes sends Spaniards to Latin America After joining the euro in 1999, Spain’s economic boom made it the land of opportunity for millions of Latin American migrant workers MEXICO CITY/MADRID

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UT since the decade-long boom turned to bust roughly four years ago, many of those immigrants have returned, joined by a growing number of disillusioned Spaniards who hope that Latin America, with its developing economies and low cost of living, has more to offer.

Spaniards are traditionally reluctant to emigrate and they are among the least likely in Europe to go abroad for work.

But with the unemployment rate at 25 percent, more Spaniards are ready to leave behind the comforts of home.

“Europe has gone down the toilet,” said 45-year-old Xavi Berdala, a former photographer from Barcelona who moved to Mexico in July to open a pizza restaurant. “People now see Latin America with more respect, more possibilities.”

Roughly 370,000 people emigrated from Spain in 2011, 10 times more than before the economy tanked in 2008.

Although about 86 percent of them were naturalized immigrants born abroad, there is also a growing number of native Spaniards saying “ya basta” (“enough is enough”). Over 50,000 left last year, up 80 percent since before the crisis hit. More than 9,000 went to Latin America, up from about 3,600 in 2006, said Jesus Fernandez huertas of Spanish think tank Fedea, citing data from the national statistics office.

The reasons for leaving are clear.

Spain’s economy is in recession for the second time since 2009 and half of all residents under 25 who are looking for work can’t find a job.

More than one in five people live below the poverty line and unemployment benefits end after a maximum of 30 months. “The situation in Spain won’t get better for another five years at least,” said Olmo del Paso, a cameraman who left Spain for Uruguay this month after being jobless for over two years and being forced to move back into his mother’s house in the small northern town of Palencia.

When a hotel in Montevideo, Uruguay, offered him a job as caretaker over the summer months, the 34-year-old bought a one-way ticket and packed his bags.

“I’m nervous leaving my family and friends,” he said. “But I can’t carry on like this. I have to at least try.”

Spain has based its budget plan for next year on a recession of 0.5 percent, but most economists say it is wildly optimistic. The International Monetary Fund, or IMF, expects the economy to contract 1.5 percent this year and another 1.3 percent in 2013. By contrast, the IMF envisages a 3.9 percent expansion next year across Latin America and the Caribbean.

Between 2007 and 2011, the number of native Spaniards emigrating to Chile rose by 144 percent, to Mexico by 129 percent, to Venezuela by 114 percent, and to Portuguese-speaking Brazil, the biggest economy in Latin America, by 227 percent. The number leaving for Ecuador

soared 467 percent. Ecuadorean migrants had swarmed to Spain to work in the booming construction industry and, now that it is in crisis, many are returning, some with Spanish-born partners and children. “It’s sad that the Ecuadoreans are coming home, because they went to Spain for the same reasons I came here.

Because there’s no work and life is tough,” said Miguel Sanchez, a 42-yearold former building site foreman who moved with his Ecuadorean wife and son to Ecuador in 2010.

In Spain, he went without work for eight months after the housing bubble, fed

What’S troUbling india?

KENNETH ROGOFF

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NDIA’S recent fall from macroeconomic grace is a lamentable turn of events. After many years of outperformance, GDP growth has slowed sharply.

Annual output will most likely rise by less than 5% this year, down from 6.8% in 2011 and 10.1% in 2010.

Reform has stalled amid profound political paralysis. All of the major emerging economies face weakening external demand, but India’s slowdown has been exacerbated by a drop in investment that reflects a deeper loss of official direction and business confidence. Even the of a modest improvement in 2013 is predicated on the government’s ability to breathe life into a spate of stalled economic reforms.

India’s recent torpor has underpinned a remarkable shift in global opinion. Just a couple of years ago, India was developing a reputation as the cool place to invest. heads of state tripped over one another to meet business leaders in Mumbai, hoping to pave the way for a significant expansion of trade and investment. Now their interest has faded, along with the macroeconomic numbers.

And yet changes currently afoot might just turn things around. India’s octogenarian prime minister, Manmohan Singh, has recently awakened to the desperate need for renewed momentum. Economists around the world have taken note of the arrival of as chief economist in the finance ministry. Rajan is a superstar academic researcher, a brilliant writer on political economy, and a former chief economist for the IMF. But it is far from obvious that Sonia Gandhi, President of the Indian National Congress and the country’s most powerful politician, shares Singh’s reform agenda.

True, the cabinet is being reshuffled to elevate younger ministers. But the process points to a continuation of the tradition whereby most ministers are appointed on the basis of their loyalty to the Gandhi family rather than their merit and accomplishments.

Unfortunately, for a country as poor as India, only sustained rapid growth can lead to enduring development gains. India’s poverty rate (an indicator that is admittedly both conceptually and practically difficult to measure) fell by half between 1981 and 2010, to just under 30% – a remarkable achievement.

But faster-growing East Asia has experienced significantly greater progress, with the poverty rate falling from 77% to 14% over the same period.

Why has India’s growth acceleration fizzled? For many years, India benefited from the long-lasting

impact of economic liberalization in the early 1990’s.

Back then, Singh, as finance minister, played a central role. he could count on the IMF – which had real policy leverage, owing to India’s need for a bailout program in 1991 – to provide external support to counter the huge internal obstacles to reform. Today, however, there is no external counterweight to the domestic political pressure that is stalling further liberalization.

True, India’s government must now consider growing threats to the country’s investment-grade credit rating. The major ratings agencies are increasingly complaining about the country’s lack of a growth strategy and its outsize budget deficits. But the impact has been limited, owing to the authorities’ ability to stuff debt down the throats of captive local banks, insurance companies, and pension funds.

Indeed, this “financial repression” tax on domestic savers remains a huge opaque source of funding for India’s debt-ridden government. It also prevents funds from being channeled to private-sector investment projects with far higher rates of return than the government can offer.

The good news is that, from an economic perspective, there is still plenty of low-hanging fruit for restoring growth. Although India is right to avoid taking financial liberalization to the extreme that the United States did in the decades before the recent meltdown, it can do quite a lot without assuming inappropriate risks, as a detailed a few years back.

The retail sector is a huge source of inefficiency that effectively places a massive tax on India’s poor by driving up prices. Instead of suing foreign retailers like Wal-Mart, India should be finding ways to emulate and benefit from their hyper-efficient methods.

Infrastructure is slowly improving, but roads, ports, water access, and the electricity grid are still horrific across large parts of the country. Of course, India’s democratic government cannot simply bulldoze through people and the environment to create infrastructure. But the obstacles also include layers of corrupt bureaucrats and politicians – a vast network of resistance to reform.

Some argue that central-government paralysis is inevitable in a democracy of 1.2 billion people, and that the only way to re-energize India is to establish a looser confederation of its constituent states. Devolution would unshackle the economically more successful states. And, by combating the culture of aid dependency in economically weaker states, India’s poorer regions might benefit in the long run as well.

As dysfunctional as a decentralized Europe seems to be these days, India might benefit from moving a few steps in that direction, even as Europe itself struggles to become more centralized.

Devolution might sound unrealistic, but once upon a time so did the European Union. If Singh’s new reform agenda is again blocked, perhaps it will be time for a more radical assessment.

Courtesy: Project Syndicate

by cheap loans, burst in 2008, sending shockwaves throughout the economy. In Ecuador, he is now a bodyguard for a local businessman in the city of Guayaquil. Far fewer Latin Americans are heading to Spain. In 2007, almost 314,000 were granted residency and by 2011 that was down to 119,416, according to official data.

‘INTENSE PRESSURE’: Spain, the euro zone’s fourth largest economy and the current focus of its almost three-yearlong debt crisis, is under intense pressure to reduce its public deficit and prove to nervous investors it can put its finances in order. Prime Minister Mariano Rajoy, in power since December, has responded to Spain’s crisis by slashing spending. That has cut deeply in to education, training schemes and state-supported internships.

Critics say the policies will push Spain deeper into recession and optimists concede that things will get worse before they get better. “The best solution for younger unemployed is unfortunately to leave Spain,” JP Morgan said in a note.

Some of the young are listening. The vast majority of those leaving Spain are between 20 and 40 years old.

From 2000, Spain’s population showed solid annual growth, almost entirely due to immigration, but the pace dropped sharply in 2008 and it began to shrink last year. Some estimates suggest its 46 million population could fall by 1 million by 2020.

During the dictatorship of General Francisco Franco, from the end of the civil war in 1936 to his death in 1975,

hundreds of thousands of people fled oppression to Europe and the Americas.

The recent jump in Spanish emigration has prompted some to draw parallels, although that’s a stretch.

“It’s ridiculous to call this an exodus as it doesn’t compare to the enormous levels of emigration in the years following the civil war and in the late sixties,” said Fernandez huertas at Fedea. “But the speed of the rise is certainly noteworthy.”

Massive population drains can often be detrimental to an economy, but with the outlook already grim, it may help.

“It might net a positive if they’re going to be sending remittances back to their families,” said Bill Adams, senior international economist for U.S.-based bank PNC. “It’s a strange inversion to think of Spanish immigrants in Latin America sending remittances back to Spain.” Between 2007 and 2011 remittances to Spain by Spanish migrants rose 7.5 percent to a record 5.7 billion euros ($7.4 billion). Nieves Mendez, a Mexico City dance instructor originally from the Spanish island of Tenerife, emigrated to Mexico when she struggled to find anything better than retail work after graduation.

Back in Spain’s Canary Islands, her mother and sister are unemployed. her grandmother, who lives with them on a 200 euro a month pension, cares for Mendez’s disabled aunt.

“And I’m here, doing everything I can to send them something, however small,” said Mendez, 31. “Just a little so I know they’re not doing too badly.”

CORPORATE CORNER Exhibition at Ocean Art Galleries KARACHI: An under-statement: artists are compulsive workers. Their hard work needs to be understood. It does not stem from an obligatory, duty-bound sentiment. The kind of work that artists do requires diligence not just on the creative level but also in terms of labour and extensive time put in to get the desired result. Abrar Ahmed is one artist who never shies away from working hard, which is why an exhibition of his latest body of work, which commenced here at the Ocean Art Galleries on Saturday, suggests he has literally as well as figuratively come of age. The more than dozen oil-on-can-vas artworks on display present a riot of colour with traditional motifs and symobols. Perhaps there is less symbolism, but whatever there is cannot be categorized as abstruse. The viewer knows the subject well and can construe it without much hassle. This does not mean that there is one dimensionality to the artworks. Mr. Abrar Ahmed has not experimented with colours and yet it is through bold and basic colours that the makes his subject speak. There was a time when the artist made long necks of petite women and was known for them. Now his female protagonist has a different ‘feel’ to her. Thought the birds, the trees and the musical instrument give off a familiar vibe, the magic lies in their treatment. In one distinctive place, he has employed the yellow colour as the base of the painting and then placed a couple of faces, a few birds, a tree and bowl in the fore-ground as if they are not part of the original scene.

PIA MD, CAA DG to address PALPA seminar on commercial aviation KARACHI: PALPA Institute of Aviation and Management Sciences is organising a seminar next week on ‘Challenges of Pakistan’s Commercial Aviation: Strategies and Solutions’ at PIAC auditorium under the aegis of PIA. The seminar, to be inaugurated by Managing Director PIA Capt Junaid Yunus and addressed by Capt Nadeem Yusufzai, Director General Civil Aviation Authority, will be focused on how to revive, once thriving commercial aviation sector of Pakistan, which is now faced with serious challenges amid current security situation and stiff competition from regional and international players. A number of speakers would deliberate on important aviation topics, Director Economic Oversight Civil Aviation Authority Afsar Malik would present vital operational statistics with his analysis about the local aviation sector to set the stage for focused deliberations on the highlighted issues. Similarly, Chief Financial Officer CAA Dr. Fazalullah Pechuho would present innovative strategies to promote the local aviation industry keeping in view the realities of the security situation, while Chairman Shaheen Air international Kahild Sehbai would identify the challenges in starting and sustaining a profitable business in the local aviation sector. Chairman Qaim Industries M A Jabbar would as a representative of the most important stakeholder, present the passengers’ outlook of the current situation, and Country Manager, IATA Mustufa Khan would present his views and analysis on aspects of passengers’ safety and the challenges being faced in this regard.

KARACHI: The Consul General of the Republic of Turkey Mr.Murat Mustafa Onart, hosted a reception on the Occasion of the 89th Anniversary of the Proclamation of the Republic of Turkey at his residence. Photo shows Mr.Murat Mustafa Onart, Acting Governor of Sindh Mr.Nisar Khuro,with Students of PAK TURK School.

Monday, 5 November, 2012