DAILY BRIEF NEWS UPDATE:01.11.2011

Pakistan loss suffered $70bn in terror war: Zardari

ISTANBUL: President Asif Ali Zardari has said Pakistan has lost over 36,000 innocent men, women and children and suffered a direct economic loss of over $70 billion in the fight against terrorism.
In an interview with leading Turkish newspaper Hurriyet, Mr Zardari, who is in Istanbul to attend a trilateral summit on Afghanistan, said: “No country has made greater contributions and sacrifices in fighting terrorism than Pakistan. We have lost our great leader and my wife Benazir Bhutto at the hands of terrorists. No-one should question our commitment or intentions in fighting the war.”
President Abdullah Gul will host the sixth Turkey-Afghanistan-Pakistan summit here on Tuesday and President Zardari will meet his Afghan counterpart Hamid Karzai for the first time since the assassination on Sept 20 of former Afghan president and peace council head Burhanuddin Rabbani and evolve a new strategy on the war against terrorism.
President Zardari said the Osama Bin Laden issue was now `history` and Pakistan was looking forward to a new chapter of relations with the United States. He said the source of the greatest evil of the new millennium had met his eventual fate.
“We should look into the future and ensure that the militant mindset is defeated. The sooner we stop public criticism and finger-pointing at each other and coordinate our resources, the better it will serve the cause of peace and stability and in the fight against extremism and militancy,” he said.
“Our relations should be based on respect for sovereignty and mutual trust.”
He said after the Soviet defeat in Afghanistan, the international community abandoned the region, leaving “us at the mercy of so-called Jihadis. Today, our innocent citizens are killed mercilessly by these terrorists. This is a historical fact. The international community owes it to Pakistan to support it in the fight against militant mindset”. Mr Zardari said Pakistan was grateful to the Turkish nation for their deep compassion and sublime generosity towards the millions of Pakistanis affected by the floods and the 2005 earthquake.
He said under the present arrangement, visa was no more required for holders of diplomatic and official passports and the eventual goal was a visa-free regime for all citizens and a currency swap agreement to increase bilateral trade.—APP

Pakistan ratings affirmed at `B-`, outlook stable

SINGAPORE, Oct 31: Standard & Poor`s Ratings Services on Monday affirmed its `B-` long-term and `C` short-term foreign and local currency sovereign credit ratings on Pakistan. The outlook on the long-term rating remains stable.

Standard & Poor`s also affirmed its `B-` issue rating on Pakistan`s senior unsecured local-currency debt and its `B-` transfer and convertibility assessment.
“In addition, we affirmed the `B-` issue rating on the sovereign`s senior unsecured foreign-currency debt, as well as its recovery rating of `3`, which denotes the expectation of a meaningful recovery of 50-70pc in the event of a distressed debt exchange or payment default”.
“The ratings affirmation takes into account Pakistan`s low income level, high public and external leverage, political and security risks, and fiscal inflexibility due to an exceedingly narrow tax base,” said Standard & Poor`s credit analyst Agost Benard. “These constraints are balanced against an adequate external liquidity position–largely due to the earlier IMF standby loan agreement and donor support.”
Pakistan`s high public and external indebtedness is a rating constraint. Standard & Poor`s estimates Pakistan`s net general government debt at 50 per cent of GDP in 2011, and about 40 per cent of it is external debt.
Although the debt-to-GDP ratio has fallen from 74 per cent a decade ago, this was mostly due to debt forgiveness and high nominal GDP growth due to double-digit inflation in the past four years, Mr Benard said.
The country`s fiscal inflexibility–particularly its narrow revenue base–has been a key reason behind fiscal slippages, including missing agreed targets under the IMF standby loan agreement.
The inability to implement structural revenue reforms continues to undermine public finances, and has resulted in the suspension of the IMF loan agreement well ahead of its expiry in September this year.

Business News

   Mon, 31 Oct 2011

·      Pak-Iran gas project consortium formed: Dr... Asim

Addressing traders at the o 

·      Bulls contribute 307 points to KSE

The KSE benchmark 100-share index ended 2...66 percent, or 307...21 points, higher at 11,868...88... Volume jumped to 101...13million shares compared with 81...08 million

·      One year extension for Rs500 note exchange

The deadline for exchanging the old currency notes was extended till September 30, 2012... According to the PM office, the extension was made on the recommendation of the Ministry of Finance to facil 

·      CNG supply suspended in Multan region

The CNG supply was halted at 6 am today following the gas load management program... Areas affected by the closure include Multan, Dera G 

·      Oil higher in Asian trade

Brent North Sea crude for December delivery rose 21 cents t 

·      Asia stocks down after rally, Tokyo up on yen move

While dealers were on a high last week after Thursday"s agreement to tackle the European debt crisis the focus has 

·      Oil, diesel movement to Afghanistan banned

?The trade of petroleum and petrol is banned to Afghanistan to prevent dumping in the local market that is causing huge revenue losses, b 

·      KSE witnesses range-bound activity

·      Edibles, LPG prices register further hike

The price of tomatoes climbed 66 percent expensive, powdered milk 22 percent and edible oil ros

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-'Pak-Iran gas project consortium formed'

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MOHAMMED  SALEEM  MANSOORI

DAILY BRIEFNEWS UPDATE:31.10.2011

Imran’s Lahore rally stuns opponents LAHORE: Imran Khan surprised his detractors on Sunday by holding a massive public meeting, described by political observers as one of the biggest rallies held in Lahore over the past two decades. And in a hard-hitting speech he asked the rulers to declare their assets and threatened a civil disobedience movement and a countrywide blockade if they did not do so. “Declare your assets or face the wrath of people,” the Pakistan Tehrik-i-Insaaf chief roared. He said declaration of politicians’ assets was necessary for a transparent governance. If politicians did not do so, the PTI would set up a commission to prepare a list of politicians and their assets and take it to court, he said. Mr Khan laid out his “plan to save the country’ as his supporters, including a large number of youths and women, raised enthusiastic slogans. Caravans of youths from Khyber Pakhtunkhwa also attended the meeting in the vast Minar-i-Pakistan ground. Imran Khan said the PTI would never use the army against its own people nor would ever beg for aid. “Jinnah would have never begged and Imran will rather die than beg,” he said. Though there was nothing new in the speech or the plan, the large meeting helped his party to maintain the momentum it had built with a series of rallies in Punjab and other areas. Mr Khan said the PTI would end corruption, declare an education emergency, improve tax collection, pursue an independent foreign policy, bring Balochistan into the mainstream national politics, end the war on terror and protect rights of minorities and women. He said most of the crises in the country were a result of corruption of the ruling elite. Once it is taken up by an independent election commission and judiciary, the rest will be easy. “Pakistan is losing over Rs3,000 billion a year in tax corruption. If it can be tapped, the country does not need foreign aid. Once the government wins the confidence of people, economic woes would simply go away.” Mr Khan said a country that had “over 180 billion tons of coal reserves could not in any way be called an energy starved state”. There is an equally great potential in hydro-electric resources. “If the PTI can run thermal units even at 70 per cent of their installed capacity, currently running at 25 to 30 per cent, the country will have no energy crisis,” he said. On foreign policy, he said the focus should be on “independence, not slavery: the PTI will want friendship with everyone, including the Americans, but on the basis of equality. The Americans will be told that Pakistan cannot fight their war and Pakistan Army cannot do its bidding. “Ties with China will form the cornerstone of PTI’s foreign policy. I am leaving tonight for China at the invitation of the Chinese government and friendship with them will be pursued to the fullest.” In a bid to dispel a perception of belonging to the ‘ultra right wing’ he said the PTI would “declare an education emergency for women; they will be educated and their right to property will be ensured as enshrined in Islamic laws. The minorities should rest assured that the PTI will stand for them once in power”. He said drone attacks were part of the problem rather than a solution. “They are feeding terrorism. The PTI believes that they are pushing over one million armed Pakhtuns to the other side of the divide. Once Pakistan quits the US-sponsored war on terror, these one million armed tribal people will take care of militancy and terrorism in their areas. It is simply a matter of making the right choices.” He said: “The Lahorites are slow to wake up, but once they do, as they are now, they are unstoppable.” He urged the people to “mobilise themselves to save the country”. He concluded his speech by warning both President Asif Ali Zardari and Pakistan Muslim League-N chief Nawaz Sharif that “change is not only imminent but already under way and the corrupt will not find a place now to hide”. Market anomalies in urea pricing With the supply side jumbled up, the urea market is operating on four different prices, marked by erratic behaviour. There are four officially-declared prices — Engro, Fauji and Fatima Fertilisers selling at Rs1,600 per bag, Dawood Hercules at Rs1,750, Agri-Tech at Rs1,800 and National Fertiliser Marketing Ltd. at Rs1,300 per bag. It was only last week that Fauji and Fatima increased their product price to Engro level. The reason for this increase and differential is the varying impact of gas shortage. While gas shortage has impacted various manufacturers differently given the condition of their plants, calculations about financial impact due to shortages is purely their own, and so is their decision to increase price. How did the impact vary so much to create a difference up to Rs500 per bag, the industry needs to explain. However, the government has much more to explain for what is happening. Who has rigged the gas distribution policy? Why has it not heeded the calls for early import of urea to meet the domestic shortage? Why is it watching price spiral as an uninterested spectator? Has it checked the calculations made by the industry before increasing urea price? Why it has left the farmers completely at the mercy of so-called market forces (read market manipulators), and that too for wheat season that could threaten food security? All these questions beg for official answers. As far as urea supply is concerned, there does not seem to be much hue and cry either on the supply side or on its price because of agronomical realities. The month of October is considered to be “thirteenth month” because no urea is needed this month as there is no major crop on the field. Thus, the farmers are neither purchasing it nor raising hue and cry. But, every fertiliser market watcher and farmer knows that it is just a lull before the storm. Of the entire Rabi demand, December alone needs around one million tons of urea, and a stock of around 200,000 tons, making the total demand at 1.2 million tons. Huge shortage of urea would not only make it disappear but provide dealers and other stakeholders an opportunity to make extraordinary profits. According to market speculations, the price may go up to Rs2,500 per bag. At that price, the situation would simply spin out of everyone’s hand. A committee has been set up last week to assess urea demand in the country. It would re-invent the wheel: re-calculate the urea need for the month of December. But the formation of the committee may delay imports and encourage hoarding by market manipulator. Instead the government should have activated the Trading Corporation of Pakistan to place order, prepare shipping and inland distribution and create an impression in the market that it is there to help stabilise supply and prices of urea. The federal government also needs to work with the provinces to firm up administrative plans to keep check on prices, especially at the dealers’ level. All manufacturers must be made to share their data (deliveries to dealers) with the provincial governments, agriculture departments and the district coordination officers (DCOs). The district level set-ups, on their part, must monitor dealers’ sales to make sure that the entire deliveries go to farmers at the officially declared rates. This could be the only possible way to keep some kind of check on the prices. It is now more of a common knowledge that market forces tend to cartelise for profit in case of shortage of any commodity. On the second plank, the government must ensure maximum gas to the fertiliser sector during the next two months. The cost of urea import is simply horrendous for the economy. Imports would cost around $600 million excluding Rs30 to Rs40 billion in subsidies to sell high-priced imported urea at local price. The economy is hardly in a position to absorb that kind of financial burden. The government must come up with import plan for the next two months, ensure maximum supply to of gas to the fertiliser sector and prepare an administrative plan to keep prices in control. Any failure on this front could threaten food security and raise the level of poverty. Business News

Mon, 31 Oct 2011 ·      Oil higher in Asian trade Brent North Sea crude for December delivery rose 21 cents t  ·      Asia stocks down after rally, Tokyo up on yen move While dealers were on a high last week after Thursday"s agreement to tackle the European debt crisis the focus has  ·      Oil, diesel movement to Afghanistan banned ?The trade of petroleum and petrol is banned to Afghanistan to prevent dumping in the local market that is causing huge revenue losses, b  ·      KSE witnesses range-bound activity ·      Edibles, LPG prices register further hike The price of tomatoes climbed 66 percent expensive, powdered milk 22 percent and edible oil ros  ·      SBP to demonetize Rs5 banknote by Dec 31 The banknote of the lowest denomination in circulation will not be a  ·      Rupee on the rise; o/n rates fall The rupee firmed in the previous trading session on healthy remittances from Pakistanis living abroad, but dealers cautioned a widening current account deficit means that the lo  ·      Bluechips bring KSE back in business KSE benchmark 100-share index rose 2...47 percent, or 278...18 points, to end at 11  ·      Five firms licensed to import LNG Sabir Hussian revealed this to the journalists during a briefing he  ·      Asian shares extend rally on Europe deal, US data Adding to the relief was data from the United States showing the world"s biggest economy grew at a strong pace in the three months to S

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Mohammed Saleem Mansoori