PRO 07-08-2012_Layout 1 8/6/2012 11:51 PM Page 1
Tuesday, 7 August, 2012
New Delhi presses the restart button… system crashes
No more
mangoes for you! Pakistanis to halt mango exports to US
India’s new finance minister vows to ‘restart growth’ NEW DELHI
Chidambaram took over the portfolio on the same day as india suffered a massive power outage that highlighted its creaking infrastructure. The Congress-led government, Chidambaram said, would take steps to attract investments in mutual funds and insurance and bring india’s fiscal consolidation process back on track. He also said that with the threat of india’s third drought in a decade looming, the left-leaning government must provide relief to parched farm areas and that the “fiscal correction” would have to be fairly shared. He also called for the cooperation of parliament, which has been paralysed over long-stalled economic reforms to open up india’s still inwardlooking economy. Chidambaram, who has been keen on reforming the heavily regulated and state-controlled economy — a legacy of socialist thinking in postindependence india —- will have the job of boosting the economy ahead of the 2014 elections. He indicated he wanted lower interest rates to spur investment and consumption. The central bank has said it wants inflation to come down from elevated levels of over seven percent before cutting borrowing costs. “sometimes it is necessary to take carefully calibrated risks,” said Chidambaram, whose periods as finance minister included the time from 2004 to 2008 when india’s growth was near double-digits.
AFP
I
ndia’s new pro-market finance minister on Monday pledged to takes steps to restore foreign investors’ faith in asia’s third-largest economy and “restart the growth engine”. P. Chidambaram, in his first policy statement since taking over last week, said india’s stuttering economy faced a string of challenges from stubborn inflation to high interest rates and a spiralling fiscal deficit. But “with sound policies, good governance and effective implementation, we will be able to overcome these challenges,” said Chidambaram, now in his third stint as finance minister. “The key to restart the growth engine is to attract more investment — both from domestic investors and foreign investors,” he said. india’s once-booming economy grew just 5.3 percent between January and March — its slowest annual quarterly expansion in nine years. He said there was still “enormous goodwill” globally for india, despite anger over recent government moves seen as hostile to foreign investors, and said most people were keeping “faith with the india growth story”. His predecessor, Pranab Mukherjee, who now occupies the ceremonial role of president, annoyed foreign investors in his March budget
Need wheat? Or maybe some textile?
Pakistan offers exports to Iran ISLAMABAD APP
senate Chairman syed nayyer Hussain Bokhari on sunday met with iranian Foreign Minister ali akbar salehi in Tehran and discussed matters related to economic and trade relations between the two Muslim countries. Emphasizing the significance of economic relations between the two countries, the senate Chairman, who is visiting iran, said Pakistan could offer many items to iran, including wheat and textile. He said the potential of both the countries should be fully exploited to the benefit of their people, said a message received here from Tehran. Referring to the iran-Pakistan gas pipeline project, Bokhari said that iran’s gas could help Pakistan in overcoming the energy crisis in Pakistan. describing Pakistan and iran as two major countries in the region, Bokhari said that the cooperation between the two countries could establish peace and stability in the region. Highlighting the significance of parliamentary cooperation between iran and Pakistan, he said that there should be more exchange of parliamentary delegations. The iranian Foreign Minister referred to cultural and religious commonalities between both the countries and said that there was no limit to the expansion of economic relations between iran and Pakistan. He said that Pakistan and iran enjoyed the best of political relations at this item as their Presidents had full understanding of major international and regional issues. The iranian Foreign Minister expressed the hope that the visit of the senate Chairman Bokhari would help further reinforce Pakistaniran relations in all fields.
with sweeping anti-tax evasion rules — some of them retroactive. Chidambaram promised to review the tax measures to find “fair” solutions, adding that india wanted a “non-adversarial” tax regime. He said the government would aim to raise the level of investment to 38 percent of GdP, from 32 percent last year. He added it was key to remove any “distrust” in investors’ minds since investment “is an act of faith”. attracting foreign investment is required to upgrade india’s dilapidated airports, roads, ports and other infrastructure in order to ease bottlenecks and spur growth.
KARACHI AFP
Pakistanis are abandoning muchpublicised mango exports to the United states after just a year because american requirements made profit margins too narrow, members of the industry said Monday. in 2011, Pakistani growers exported five tons of the country’s signature fruit to the United states and had hoped for a higher yield this year. But if exports grind to a halt, it could prove embarrassing for efforts dubbed “mango diplomacy” in 2010 when Us secretary of state Hillary Clinton offered to help Pakistan export the fruit in a bid to ease anti-americanism. The Us embassy was unavailable for comment, but announced in January that Us support had helped select mango growers increase regional exports by more than 60 percent and revenue by more than $4 million over the past year. Pakistani officials confirmed the assistance, but said sending mangoes to the United states was not cost effective. “Pakistan cannot export mangoes to the United states this season because of certain restrictions, which the growers feel makes the business unprofitable,” Kashif niazi, an official at the commerce ministry, told aFP. an official at the Trade development authority of Pakistan, which regulates exports, said producers had been annoyed by compulsory Us irradiation in Chicago that ate into their profits. although Pakistan has its own irradiation plant, it has not been approved by the United states.
July to see car sales set in
rEd zoNE
Shares rally, euro up on US jobs, hopes for Europe action TOKYO AGENCIES
asian shares rallied to a three-month high and the euro touched a one-month high against the dollar on Monday, as a stronger-than-expected U.s. jobs data and emerging optimism for European action on the debt crisis bolstered risk appetite. But caution is likely to remain until concrete measures are taken, which may be weeks away, and investors in the meantime will be looking to data out of China starting Thursday – from trade to bank loans and investment — to give the global economic outlook a further lift. China’s central bank on sunday pledged to intensify monetary policy fine-tuning and improve credit policy to bolster the world’s second largest economy. With the euro zone debt crisis crippling global economic activity, southeast asia’s largest
KARACHI STAFF rEPorT
economy, indonesia, will likely report its second quarter gross domestic product grew 6.1 percent on Monday, indicating its once-sizzling economy is starting to cool and show gaps in its resilience against a global slowdown. MsCi’s broadest index of asia-Pacific shares outside Japan rose 1.6 percent to its highest in three months, with Hong Kong shares rallying 2 percent to be among the region’s top performers. Japan’s nikkei stock average jumped 1.7 percent. “Time has come to shift funds to risk assets, as markets have very limited room for further downside from here,” said Tetsu Emori, a Tokyo-based commodities fund manager at astmax investments. “investors may be questioning why they rushed to sell when the ECB and the Fed both have been saying they will take action when necessary. They never said they won’t do anything.”
The market observers, citing discussions with industry experts, expect soft sales in local automobile industry during the month of July. The lower numbers are primarily on account of completion of Punjab taxi scheme, prompt buying by dealers before price hike in June causing inventory pile up in the market and reduced price differential between local and imported CBUs. according to analysts at Topline Research, local industry sales may decline by 30 to 40% MoM during July compared to 19k in June 2012 with PsMC receiving the major hit. Companies wise break up reveals that Pak suzuki sale is expected to decline by 45-50 % in July from 11k units sold in the previous month to 5700-6200 units likely in July 2012 This is in line with our expectations where we expect 2H2012 sales to decline by 31% as compared to 62k units in 1H2012. This is on account of no taxi scheme in the 2H2012 and short term effect of ban on CnG. On the other hand, the indus motor sales are expected to decline 25-30 % to 3.9k to 4.1k units in July as compared to 5.5k in June 2012.
Asian markets bounce on US jobs figures, ECB hopes HONG KONG AGENCIES
asian markets rebounded strongly Monday on betterthan-expected Us jobs data while traders took a more positive view of the European Central Bank’s position on the eurozone debt crisis. The single currency hit its highest level against the dollar in a month as concerns over the eurozone and the Us eased, while hopes grew that Greece will meet its obligations to qualify for another tranche of rescue cash. Tokyo rose 1.72 percent by the break, Hong Kong jumped 2.03 percent, sydney was 1.21 percent higher and seoul climbed 2.05 percent. shanghai added 0.28 percent as dealers tentatively awaited the release of key economic data on the world’s number two economy later in the week. in the United states the Labor department said Friday that the economy added 163,000 jobs in July — the strongest gain since February and beating forecasts for a gain of 100,000. despite a 0.1 percentage point rise in the unemployment rate to 8.3 percent the figures were welcomed by investors who took the report as a sign of resilience
in the world’s number one economy. The result sent Wall street surging. The dow jumped 1.69 percent, the nasdaq climbed 2.00 percent and the s&P 500 rose 1.90 percent. The figures were welcome news for the markets, which had been sent tumbling on Thursday after the ECB failed to announce any concrete plans to support the euro, despite comment from its head Mario draghi that it would do whatever was needed. However, the initial disappointment was reversed in Europe and on Wall street after bank officials said Friday it could intervene and buy the bonds of struggling eurozone countries without unanimous approval. Those comments raised hopes that a bond buying programme to help struggling countries such as spain and italy is still possible. The ECB “seems to be cooking up something internally”, Jung seung-jae, analyst at Mirae asset securities in south Korea, told dow Jones newswires. “action may come earlier than expected.” On currency markets the euro surged in early trade to a one-month high of $1.2442 as traders became more confident in higher-risk, higher-yielding assets. The currency later eased and sat at $1.2402,
still up from $1.2381 in late trade in new York Friday. The euro bought 97.20 yen compared with 97.30 yen in new York, although well up from the 95.18 yen in Tokyo on Friday. The dollar bought 78.40 yen, from 78.59 yen. also providing some support to markets were comments from Greece’s international creditors sunday that the country was committed to hammering out further spending cuts to secure a new batch of aid.