profitepaper pakistantoday 09th December, 2012

PRO 09-12-2012_Layout 1 12/9/2012 12:18 AM Page 1

Sunday, 9 December, 2012

‘We’re focusing on improving sales tax system’

F

Global stocks, dollar up modestly after strong jobs data Global shares rose modestly after a surprisingly strong US jobs report for November was tempered by a drop in American consumer sentiment amid a lack of progress in talks to avert the ‘fiscal cliff’ NEW YORK

LAHORE

AGENCIES

APP

The dollar edged up, though the currency was off its highs as investors parsed the details of the labor market report, one of the most closely watched economic indicators.

U.S. non-farm payrolls added 146,000 jobs last month, data showed, defying expectations of a sharp pullback related to superstorm Sandy that hit the U.S. Northeast in late October. Uncertainty over whether U.S. lawmakers will agree on a deal to avert spending cuts and tax increases continued to keep investors on edge. Any signs of how the talks are progressing could cause more fluctuations in the markets.

“We’re not as concerned as we were a few months ago because of improvement like you can see in the employment number, but there’s such a wild card over the “(fiscal) cliff,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio. “There are such concerns about what could happen that markets will be overhung until a resolution is more certain.”

Republican House Speaker John Boehner accused President Barack Obama of pushing the country toward the “fiscal cliff” and wasting another week without progress in talks.

“There’s total uncertainty with what’s going to transpire here and abroad. Too many questions,” said Warren West, principal at Greentree Brokerage Services in Philadelphia.

Wall Street ended mostly higher, with gains capped after data showed anxiety over pending higher taxes likely soured consumers’ attitudes in early December.

The Nasdaq fared worse than the other major indexes, weighed down again by shares of Apple (AAPL.O), off 2.6 percent to $533.25. It was the worst week for the stock since May

E D E R A L Finance Minister Dr Abdul Hafeez Shaikh has said the government was focusing on improving sales tax system and broadening tax net. Talking to the media here on Saturday, he said less than one million people gave income tax which should be increased.

He said from the last January till present, the stock market sector in the country was one of the best markets in the world and it that had increased 35 percent.

Hafeez Shaikh said the country had been in a financial crisis in 2008 but now, he added, in spite of all problems like flood, security, etc the growth rate would cross 4 percent, something that had been extremely low in the past.

The minister said inflation had reached 25 percent in the past, and the current government had reduced it to 8.5 percent.

He said tax collection was Rs 1000 billion in 2008 and now it was Rs 2000 billion and this year it would reach to Rs 2,300 billion.

“The provincial governments were given more money than the federal for improvement and betterment of the people,” he added.

“Our export is good and remittances

would cross $ 15 billion,” the minister said. He said the aim behind the recent visit to the US had been to review relations with the U.S besides looking strategic relations and to increase Pakistan’s trade and investment. He said Bhasha Dam was a project of 8 to 10 years and the US government had made commitment to give $200 million for it.

Pakistan demands preferential status for trade with EU ISLAMABAD: Pakistan has demanded preferential status for exports to European Union member states. According to a private news channel, head of European Union delegation in Pakistan Lars-Gunnar has assured that European Union would review the demand for giving Pakistan an access to European Union Market. According to officials statements the Foreign Minister of Pakistan Ms. Hina Rabbani Khar held a meeting with the head of European Union of External Affairs in Brussels last week which aimed at to get GSP plus status for Pakistan. APP

2010. The Dow Jones industrial average .DJI gained 81.09 points, or 0.62 percent, to 13,155.13. The Standard & Poor’s 500 Index .SPX added 4.13 points, or 0.29 percent, to 1,418.07.

The Nasdaq Composite Index .IXIC dropped 11.23 points, or 0.38 percent, to 2,978.04.

The FTSEurofirst 300 index .FTEU3 of top European shares ended up 0.07 percent at 1,132.69. The MSCI world equity index .MIWD00000PUS inched up 0.14 percent to 334.52.

The dollar soared to session peaks immediately following the jobs data, but the momentum faded through the day. The dollar index .DXY was up 0.2 percent. The euro fell to a session low of $1.2878 on Reuters data, matching the low set on November 28. It was last down at $1.2925, having trimmed early losses, with traders citing a news report that senior European Central Bank Executive Board members opposed a rate cut backed by the majority at the ECB’s policy meeting earlier in the week.

“Whether this reduces the likelihood of a cut going forward, the forex market perceives a more hawkish than

dovish stance and created significant short covering,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co LLC in New York.

But the euro remained under pressure after Germany’s central bank cut its growth outlook and pointed to risks of a recession as the three-yearold debt crisis takes its toll on the region’s largest economy.

The benchmark 10-year U.S. Treasury note fell 11/32 in price to yield 1.63 percent.

Oil futures prices slipped as investors worried about Europe’s economic problems and the uncertainty over U.S. budget wrangling to avert the $600 billion in tax hikes and spending cuts. Brent crude futures dipped 1 cent to settle at $107.02 a barrel. U.S. January crude oil futures fell 33 cents to settle at $85.93 a barrel. But gold prices rose from a onemonth low after the healthy U.S. jobs data did not change the view that the Federal Reserve will keep using economic stimulus to bolster growth.

Spot gold inched up 0.2 percent to $1,702 an ounce, bouncing back from a one-month low of $1,683.79.

Investment opportunities in Pakistan woo leading entrepreneurs WASHINGTON APP

Pakistan’s vast economic potential anchored on the entrepreneurial spirit of its people, expanding market and promising investment climate make it an attractive place for business ventures, American and Pakistani business experts and leaders noted at a roundtable discussion.

The discussion was organised by Partners for a New Beginning (PNB) Secretariat at the Aspen Institute in New York on the subject of Entrepreneurship and Investment in Pakistan, in collaboration with Morgan Stanley and Abraaj Capital.

Over 75 representatives from the US Government, the Embassy of Pakistan in Washington, Consulate General of Pakistan in New York, USAID, OPIC, OPEN, APF, banking and financial institutions, hedge funds and entrepreneurs from the private sector and the NGO community convened to discuss opportunities for entrepreneurship and investment in Pakistan.

There was a clear agreement among participants that while news reports from Pakistan often focus on violence and governance issues, Pakistan has quietly become a potential investment location due to its strong middle class – the fourth largest in Asia – and its energetic entrepre-

neurial environment.

The conversation highlighted leaders from the private sector, the US and Pakistani governments, and the impact investment community to share success stories and lessons learned for investing in this growing market.

PNB Steering Committee member, Morgan Stanley spoke of the company’s commitment to PNB and its model of engagement.

They gave special emphasis to their Global Sustainable Finance unit, which includes Investing with Impact, an initiative that was launched earlier this year at a US State Department event.

“This event exemplifies how PNB is bringing together the public and private sector to implement the vision of supporting economic development in countries with Muslim-majorities, and creating new connections between these countries and the United States,” said Mahmoud Mamdani, Vice Chairman for the Middle East and North Africa and Managing Director at Morgan Stanley.

“Capital markets can and should play a critical role in helping strengthen communities and providing sustainable economic opportunity,” said Morgan Stanley’s Head of Global Sustainable Finance Audrey Choi.

Focusing on opportunities in the small and medium enterprise sector, Abraaj Capi-

tal’s Tom Speechley spoke of why his firm is so bullish on the market in Pakistan. Mr. Speechley, who is the CEO of Abraaj’s small and midcap investment arm – Aureos Capital, highlighted Pakistan’s competitive ICT labor market, its encouraging investor protection track record, and its favorable comparability with other BRIC countries. He also discussed successful projects undertaken so far by Abraaj in Pakistan such as KESC, MSF, and Biogas. Representing the views of the private sector, CEO of NTELX the Hon. Rob Quartel, MIT Sloan professor and founder of the MIT Enterprise Forum Imran Sayeed, and CEO of ConstellationCK/Sofizar Carlos Cashman shared their experiences in Pakistan.

“A business like mine would have been very difficult in the US, but we can do it in Pakistan because the cost is so much lower,” said Mr. Cashman. The people of Pakistan are “natural capitalists,” added Mr. Quartel. Deputy Chief of Mission Asad Majeed Khan from the Embassy of Pakistan remarked at the

outset of the event that “the government of Pakistan realizes that the way to our economic growth lies in capitalizing on the entrepreneurial ability and the unflinching resolve of our strong middle class.” From the US government, the State Department’s Deputy Special Representative for Afghanistan/Pakistan Dan Feldman told the audience about the recent economic cooperation between the two governments and how they are excited to encourage private investment in Pakistan. The US government is more focused on energy, economic growth and developing infrastructure in border areas. “The Department sees business leaders as change agents,” Mr. Feldman remarked. Alex Thier, Assistant to the Administrator for the Office of Afghanistan and Pakistan Affairs at USAID, spoke about thePakistan Private Investment Initiative, a public-private partnership aimed at generating investments in Pakistani companies in partnership with the private sector. Theirs informed about USAID’s Pakistan Private Investment Initiative whereby they have created a fund of $24 million for encouraging investment on one-to-one basis.

PRO 09-12-2012_Layout 1 12/9/2012 12:18 AM Page 2

Business 02

Open sesame!

Businessmen favour opening Khokrapar-Monabao border to boost trade numbers

SAARC chamber demands visa on arrival LAHORE APP

KARACHI

P

STAFF REPORT

RESIDENT, Karachi Chamber of Commerce & Industry Harron Agar has voiced to expedite execution to open Indo-Pak cross-border trade Khokrapar- Monabao Border on the pattern of Wagah-Attari.

Harron Agar exchanging view points in a meeting held here with High Commissioner of India Sharat Sabharwal, reiterated that fostering the process of regional trade and economic cooperation between Pakistan and India would bring peace and prosperity in the region, said a statement issued here on Saturday. He hoped that

negative list would be removed before the end of the year 2012 and that Pakistan would accord Most Favourite Nation (MFN) status to India as well.

Both countries would have to demonstrate similar greater political will to foster relations as shown in negotiations during last two years, he added, further saying that KCCI recently organised India Single Country Textiles Exhibition with Synthetic & Rayon Textiles Export Organisations (FIEO).

One complete hall for Indian and International Pavilion is also planned in KCCI’s 10th My-Karachi Exhibition to be organised set to kick off on July 5, 2013.

He proposed the introduction of Mediation/Arbitration Committees in Mumbai

and Karachi to address the grievance of importers of the two countries comprising of the presidents of Karachi and Mumbai chambers or their nominees, retired judges, and retired customs officials of Commissioner Level.

Haroon Agar hoped that Pakistan would get GSP Plus in EU by 2014 which would also benefit India as next door neighbour. High Commissioner of India Sharat Sabharwal informed that Prime Minister Manmohan Singh’s vision was to transform South Asia with the cooperation of all neighbour countries of India, including Pakistan, the region moves from poverty to prosperity and from ignorance to a knowledgeable society.

PEORA-FOSFA trade seminar on 11th KARACHI STAFF REPORT

Pakistan Edible Oil Refiners Association (PEROA) in collaboration with Federation of Oils, Seeds and Fats Association Limited (FOSFA) is organising a two-day seminar on PEORA–FOSFA TRADE in Karachi on 11th and 12th December 2012.

The Federation of Oils, Seeds and Fats Associations (FOSFA) is a professional international contract issuing and arbitral body concerned exclusively with the world trade in oilseeds, oils and fats with 975 members in 79 countries. These members include producers and processors, shippers and dealers, traders, brokers and agents, superintendents, analysts, shipowners, and others providing services to traders.

FOSFA has an extensive range of standard forms of contracts covering

goods shipped either CIF, C&F or FOB, for soybeans, sunflower seeds, rapeseed, and others, vegetable and marine oils and fats, refined oils and fats, from all origins worldwide, for different methods of transportation and different terms of trade. Internationally, 85% of the global trade in oils and fats is traded under FOSFA contracts.

The federation’s contracts incorporate a dispute procedure involving arbitration by experienced individuals from within the trade. The Chief Executive Officer of FOSFA, the immediate Past President and Speakers are arriving to address the Seminar.

Pakistan is the third largest importer of Palm Oil and other Soft Oils.

In addition to that Pakistan imports one million tons of Oil Seeds. All these contracts are governed by FOSFA terms and conditions. This Seminar would give immense opportunities to the Edible Oil Industry to understand the FOSFA terms which are acceptable globally.

SAARC Chamber of Commerce and Industry, an apex body of chambers in the region, Saturday strongly demanded the facility of visa on arrival in SAARC countries to boost socio economic prosperity in the South Asian countries which possess 12 per cent of global natural resources.

In his key note address, at a seminar on “ Trade and Investment: New Dawn in South Asian Integration” in the federal capital, SAARC CCI Vice President, Pak chapter and veteran trade leader, Iftikhar Ali Malik said that for promotion of economic co-operation in South Asia, free movement of businesspersons in the region was crucial and India-Pakistan agreement on flexible visa policy would allow multiple-entry on reciprocal basis.

He said that India and Pakistan, the two most powerful members of the SAARC region, had come to enter a suitable trade regime. He said we had all seen that times have changed and the concept of economic prosperity among member countries had taken the lead.

This was much needed so that we could reap full benefits of the regional power to eliminate the poverty and bring self reliance and prosperity in the region like other global blocs of the world, he added.

He stressed the urgent need to thoroughly exploit indigenous natural resources and untapped mineral resources not only to improve but to strengthen the socio economic conditions in the region on the pattern of trade blocs like NAFTA, EU, ASEAN and COMESA. He acknowledged the celebration of 28th SAARC Charter Day which demands firm resolve to

work towards making it more meaningful for our people, sincere efforts to end political confrontation and act for socio economic prosperity work in unison in order to safeguard rich heritage and also to rise to face future challanges.

He said that while socio-economic demography of the world was changing, 21st century was touted as the century of Asia and in prevailing global scenario, SAARC countries needed to work together and share vision and stronger economic linkage within the region for the welfare of the people.

Iftikhar Ali Malik said that it is the need of the hour that all eight nations in the South Asia must work to meet common challenges especially that threaten security, peaceful co-existence and progress in the region.

He said that SAARC was home to more than 1/5th of the world population making it the largest entity in the globe.

He said that 45% of SAARC’s population consisted of youth and it possessed 12% of the global natural resources and untapped resources in more or less, the same quantity. He said that every SAARC country had its unique characteristics as India was the 4th largest economy, Pakistan, the hub of textiles, Bangladesh, the centre of garment industry, while Nepal, Maldives and Sri Lanka were emerging destinations of tourists from all over the world.

Iftikhar Ali Malik said that it was unfortunate that the world development indicators presented a bleak picture of the region on global economic fronts despite having enormous potential, the contribution of SAARC countries in global GDP is less than 2 % and its share in export is only 1.5 % which does not reflect our potential.

Dollar climbs vs euro on US jobs data; Fed eyed The US dollar gained against the euro for the third straight day after the release of better-than-expected US jobs data, but less-encouraging details within the report should limit the currency’s gains ahead of a Federal Reserve policy meeting next week NEW YORK AGENCIES

The dollar had soared immediately after the headline data for November stoked speculation that the U.S. central bank may opt for a smaller stimulus program.

But it pared gains against the euro and turned slightly lower against the yen as traders scrutinized the components of the report.

While nonfarm employment increased by 146,000 jobs last month, showing little apparent impact from superstorm Sandy, job growth for previous months was revised downward and a drop in the jobless rate to a near fouryear low was due to job seekers giving up the search for work.

“There’s a lot of speculation on how much impact Sandy has on the data. The number just feels wrong,” said Ronald Simpson, managing director of global currency analysis at Action Economics in Tampa, Florida. “That’s why we’ve seen things come unwound back to pre-data levels because everybody is going to look ahead and wait for the revisions.”

The euro fell to a session low of $1.2878 according to Reuters data, matching the low set on November 28. It was last trading down 0.3 percent on the

day at $1.2924, bringing the weekly decline to 0.5 percent.

Some $5.6 billion of euros changed hands, according to Reuters Dealing.

The common currency pared losses in trade before midday, with traders citing a news report that said senior European Central Bank Executive Board members - including President Mario Draghi and Bundesbank President Jens Weidmann - opposed a rate cut supported by the majority at the ECB’s most recent policy meeting on Thursday.

“Whether this reduces the likelihood of a cut going forward, the forex market perceives a more hawkish than dovish stance and created significant short covering,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co LLC in New York.

Weakness in the euro came as Germany’s central bank said it expected Eu-

rope’s largest economy to grow just 0.4 percent in 2013, and pointed to risks of a recession as the euro zone debt crisis

takes its toll. The euro lost 0.8 percent against the dollar on Thursday after ECB President Mario Draghi said policymakers had discussed cutting borrowing costs and slashed growth and inflation forecasts for the euro zone.

ECB policymaker Jozef Makuch also said the bank may cut interest rates next year if the euro zone economy does not improve.

“The euro is still pricing in the earlier-than-expected rate cut talk that came out of yesterday’s ECB press conference,” said Marc Principato, director of SMB Forex Trading and Education in New York. “If 1.2985 cannot be broken to the upside in the next day or two, I believe a test of the 1.2850 support is more likely in the coming week.”

Attention now turns to the Federal Reserve, which begins a two-day meeting on Tuesday. Policymakers are expected to maintain support for the tentative U.S. re-

covery by ramping up one bond-buying program to offset the expiration of another.

“The real question is whether (the November jobs data) changes the Fed’s attitude toward more stimulus. It doesn’t remove the need for stimulus but might convince the Fed to opt for a smaller program,” said Kathy Lien, managing director of BK Asset Management in New York. Fed stimulus is viewed as negative for the dollar because it equates to printing money, which lowers U.S. bond yields and diminishes the appeal of holding dollar-denominated assets.

The dollar rallied as high as 82.82 yen on Reuters data, matching a near eight-month high set on November 22.

It was last trading at 82.42 yen, near flat on the day. The yen briefly rose against the euro and dollar after news of an earthquake in Japan. A far more powerful earthquake in March 2011 led to a sharp rise in the yen on expectations Japanese investors would repatriate funds held abroad. Investors also closely watched developments on the U.S. “fiscal cliff” debate.

Republican House Speaker John Boehner accused President Barack Obama of pushing the country toward the “fiscal cliff” on Friday and of wasting another week without progress in the talks.

Sunday, 9 December, 2012