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Thursday, 12 July, 2012
PIBC are the levellers Removal of negative list, non-trade barriers to give level playing field to Pak-India traders g
MISSED BY A LIGHT YEAR
Oops we did it again! Pakistan misses fiscal trade deficit target by a mammoth $7b g Oil price hike, more urea imports, low textile exports and power crises widen trade gap to $21.3b in FY12 g
KARACHI
LAHORE APP
Removal of negative list for trade with India and removal of non-tariff barriers (NTF) by India for trade with Pakistan would have far reaching effects on economies of the two countries and people would be benefit. Chairman,Pak-India Business Council (PIBC) Noor M Kasuri while talking to APP here Wednesday appreciated the steps announced by the two governments and expressed hope that they would implement these as per schedule i.e December 2012. he said that removal of NTF and negative list would provide level playing filed to exporters and importers of the two countries and it would open new vistas of business relations between the neighbouring states having several common features. Quoting a senate standing committee briefing on last Monday which told that a meeting to import power from India would be held in Lahore soon, Kasuri said that it would be a very positive step as Pakistan is in dire need of power and India can help the country in the regard.
Where’s the formal application? Bangladesh asked to send formal request to join TAPI project
STAFF REPORT
T
hE details of trade account for the just-concluded FY12 stood quite disappointing as during the year totally missed the budgetary targets breaching to $ 21.3bn deficit or 9.7% of GDP compared to the target of $ 14.5bn. The trade deficit widened up by 36%YoY against FY11 deficit of $15.6bn. The exports for FY12 went down by 4.7%YoY to $23.6bn compared to $24.8bn witnessed last year. Whereas, a considerable growth of 11%YoY was witnessed in imports which stood at $44.9bn during the year against $40.4bn witnessed a year earlier. “These high figures for trade deficit are primarily due to the enormous surge in international oil prices (Arab Light) by 19%YoY during FY12 resulting in swelling of imports as oil imports contains 34% weightage in the total import bill, huge fertilizer imports amounting $1.1bn (up 112%YoY) during Jul-May 2012, the massive decline in the textile export as cotton prices went down by 35%YoY during FY12 which reduce the export value in USD term of the country and electricity and gas load shedding also denting the export of the country,” viewed a report issued by the InvestCap Research Wednes-
day. On monthly basis, the report said, the country’s total exports declined by 0.83%MoM to $2.1bn during Jun-12 while imports of the country surged by 2.3%MoM resulting to widen the trade deficit to USD1.8bn, up by 6.12%MoM during the same period. Similarly, during Jun-12 trade deficit increased by 27.6%YoY as compared to June-11deficit of USD1.4bn. Whereas export has got down by 11.6%YoY stood at USD2.1bn
while imports increased by 3%YoY to USD3.98bn. Yet another remarkable year for worker's remittances as overseas Pakistanis sent $13bn to Pakistan during FY12 compared to the remittances of last year’s $11.2bn, registering a phenomenal growth of 18%YoY. During the month of June-12, the remittances stood at $1.11bn, down by 6.3%MoM while up 1%YoY, workers re-
siding in GCC countries contributed the highest chunk of 60.8% during June-12 (60.9% during FY12), remittances from USA contributed 18.5% during the month (17.5% during FY12) while remittances form European countries contributed 14.1% during the month (14.3% during FY12). however, comparing the monthly averages except for the months of Sept11 (US$890.42mn) and Nov-11 (US$924.92mn), the remittances remained above $1bn each month during remaining 10 months of the year, compared to monthly average of $933mn registered during FY11. Going forward, the report said, the declining trend of international oil and commodity prices could potentially result in trade numbers delivering some relief in 1QFY13. Also improvement in Pak-US relationship could be a key positive development for re-initiation of CSF program and other civilian and military aid foreign flows which will decrease the pressure on country's external account. “Given our major dependency for remittances over GCC economies, we expect this impressive growth in workers' remittances will also continue to embark for FY13 as oil based GCC economies are expected to remain strong,” it concluded.
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MANILA OnLinE
Bangladesh has moved closer to joining Turkmenistan, Afghanistan, Pakistan and India (TAPI) gas pipeline project as Asian Development Bank (ADB) has asked the economic relations division of Bangladesh’s finance ministry to submit a formal request. The TAPI steering committee, at its meeting on May 23, had discussed Bangladesh’s request for inclusion into the pipeline project. The ADB has requested Bangladesh to submit the request by July 15. Bangladesh is facing severe energy shortage which has affected power generation, pushing the government to take up costly rental power plant projects as quick solutions. TAPI would be more feasible for Bangladesh if it is ascertained that the gas imported from Turkmenistan is cheaper than the LNG import from Middle East. In May, Turkmenistan on signed an agreement for the sale and purchase of natural gas as part of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project. Country’s state gas company Turkmengaz signed gas sales and purchase agreements with Pakistan's Inter State Gas Systems and Indian state-run utility GAIL.
InfoTech musters acclaim Pakistani IT company to implement market surveillance at Capital Markets Authority Kenya ISLAMABAD STAFF REPORT
A Pakistan IT company, InfoTech, has won laurels in Kenya by implementing its market surveillance software Capizar at the Capital Markets Authority (CMA) Kenya which is already deployed successfully in Pakistan, Ghana and Bhutan. A statement issued by the company said it has won the bid to deploy an advanced market surveillance system, Capizar Capital Market Suite, in Kenya as part of its mandate to maintain an orderly, transparent and efficient market, and thus protect investor interests across Kenya. This win at CMA Kenya followed a stringent public procurement process that commenced in June 2011 with the release of an Expression of Interest (EOI) collected from around the globe. This followed a round of Request for Proposal (RFP) from the contending parties and finally a competitive bidder that
was the best market fit, was identified. Earlier the CMA had embarked on a program to automate their Depository and Settlement (DSS) Operations in November 2004, implement the Automated Trading System (ATS) in September 2006, their Wide Area Network (WAN) in December 2007 and had successfully installed the Broker Back Office (BBO) in early-2012. Collectively these have helped transform Kenya’s capital market to globally accepted financial market standards and competitively positioned it as a safe and preferred investment destination. Speaking during the contract signing ceremony, CMA Kenya Stella Kilonzo noted, ‘The Authority has stepped up its oversight role to ensure real time surveillance and any irregularities in trading are identified and curbed early enough through the successful implementation of an enhanced surveillance system called Capizar Market Surveillance.’ CEO InfoTech Naseer Akhtar
lauded the role of CMA in maintaining and regulating the capital markets of Kenya. “The implementation of the Capizar Market Surveillance will ensure that trading remains the foremost priority and that it is conducted in a transparent manner”, he said. The new market surveillance system deployed at the CMA envisaged to “go live” by September 2012 and will enhance the monitoring of trading activities. It will help towards identifying unusual trading patterns and market conditions that indicate violations of the Capital Markets Act and Regulations. Mrs. Kilonzo further observed, ‘The Authority reaffirms its commitment to create, maintain and regulate a market in which securities can be traded in an orderly, fair and efficient manner. The new surveillance system will enable us to monitor trading activities in the market on real time basis by providing early warning signs through the use of alerts.’
Petroleum Ministry digs in g
Makes another attempt to bring OGRA under its control ISLAMABAD STAFF REPORT
With the change of premiership, Petroleum Ministry makes another attempt to bring the Oil and Gas Regulatory Authority under its administrative control as the Prime Minister Raja Pervez Ashraf will be chairing a meeting in this regard on Thursday. An official source said that with the new Prime Minister taking charge, the Petroleum Ministry has again moved a summary to bring OGRA under its administrative control which was rejected by the former Prime Minister Syed Yusuf Raza Gillani earlier this year. The move is
expected to be strongly opposed by the Ministry of Law and Cabinet Division, under which administrative control of all regulatory agencies falls. The objective of placing all the regulatory agencies under the Cabinet Division is to curtail interference of their line ministries to empower them to operate independently. The National Assembly Standing Committee on Petroleum and Natural Resources had unanimously resolved that OGRA and Department of Explosives, which fall under the administrative control of Ministry of Industries, should be given under the control of the Petroleum Ministry to end anomalies in implementing policies to overcome en-
ergy shortages. The source said the move was aimed at to curtail the interference of OGRA in the implementation of policies formulated by the Petroleum Ministry. OGRA’s decision to demand guarantee worth $ 1 million for LNG import from three private sector parties had annoyed the ministry as there was no such condition in the original policy. The parties were granted permission to import LNG and market it themselves to the private sector. OGRA has opposed the LPG Air mix project of the Petroleum Ministry on the grounds that it would lead to massively increasing the natural gas tariff for the consumers. It is also opposed to grant-
ing permission to import LNG to two private companies for which the sovereign guarantee would be provided by the government. Expressing of concerns by OGRA was termed as interference in the policy domain which is the prerogative of the Petroleum Ministry. The ministry is of the opinion that the administrative control of Cabinet Division over OGRA often leads to inadequate decision, as it could not possibly evaluate the regulatory and decision making business of the regulatory agency. This administrative structure of OGRA has seriously impaired the efficiency, capacity and accountability of the organization.
Profit warnings sink Wall Street NEW YORK AgEnciES
U.S. stocks fell for a fourth day on Tuesday as more pessimism from U.S. companies compounded worries the sluggish world economy is taking a toll on U.S. profit growth. A sales warning from engine maker Cummins Inc came on top of earlier weak forecasts from chipmakers Applied Materials Inc and Advanced Micro Devices, extending losses in afternoon trading. The news sent the S&P 500 lower for a fourth consecutive day, with shares of industrials falling the most at 1.6 percent. Cummins was among the biggest losers, declining 8.9 percent to $86.91. "It seems like the first signs indicate that earnings are going to be mediocre, and so there's not a whole lot to rely on in terms of propping up the market," said Bryant Evans, investment adviser and portfolio manager at Cozad Asset Management in Champaign, Illinois. Recent data showing slower growth in Europe, China and the United States has weighed on the stock market, while U.S. companies have warned about overseas weakness and a stronger dollar hurting companies that rely heavily on exports. Alcoa Inc, which kicked off the earnings period, fell 4.1 percent to $8.40 a day after it reported a quarterly loss and lower sales. Bank stocks also declined, with the euro hitting a two-year against the dollar amid uncertainty about progress in tackling the euro zone crisis. The KBW Bank index fell 0.9 percent. The Dow Jones industrial average was down 83.17 points, or 0.65 percent, at 12,653.12. The Standard & Poor's 500 Index was down 10.99 points, or 0.81 percent, at 1,341.47. The Nasdaq Composite Index was down 29.44 points, or 1.00 percent, at 2,902.33. Cummins cut its fullyear sales forecast, citing weakness overseas and a stronger dollar. Advanced Micro Devices tumbled 11.2 percent to $4.99 after the chipmaker slashed its outlook for second-quarter revenue following disappointing sales in China and Europe.