Posted on

SAARC single market for agribusiness need of the hour

F.P. Report

ISLAMABAD: Vice-President SAARC Chamber of Commerce and Industry Pakistan chapter Iftikhar Ali Malik Saturday urged all eight members of the SAARC to work jointly to establish a single market and production base by integrating agricultural sector to promote equitable development, transforming South Asia into a global power besides attaining food autarky in the region.

According to a message received here, Iftikhar Ali Malik, presiding over a parallel  session on “Agribusiness-Target-Doubling Agribusiness by 2030 ” on the second day of 3-day 6th SAARC Business Leaders Conclave being held at Kathmandu, said in principal it was decided that all the SAARC member states would exchange with each other new technologies and germ plasma to ensure food security in the region which would help them improve their system of agriculture and exports.

He also urged the SAARC member states to make joint efforts to deal with challenges such as water scarcity, food insecurity and malnutrition in the region.

“The threat of water scarcity looms large in the entire region. The population is increasing, but agricultural production is diminishing,”  he said, adding post-harvest losses must be minimised to increase agricultural productivity.

He said that per capita water availability had decreased in the region over the years. “The per capita water availability is only 1,000 cubic metres per person. The figure was 5,200 cubic metres in 1947,” he added.

He said malnutrition affects 40 per cent of the children in the region. “We have to take steps to end this. We have to shift our focus from green revolution to ever-green revolution,” he added.

He said to attain the targets in agricultural sector, the member countries should resolve their all kinds of  differences and eschew violence to work towards a prosperous region.

“We seek cooperation from all neighbouring  countries for fighting against abject  poverty  so that together with SAARC countries we can create our importance and emerge as a power in the world.

It is imperative that we work together with a dream to win a fight against poverty, shoulder to shoulder,” he said.

For this purpose, Iftikhar Ali Malik suggested that a uniformed campaign should be launched in all SAARC countries to increase awareness against diseases in fruits, vegetables and other agricultural outputs that usually hinder region’s exports, especially in industrialised countries.

“We need joint programmes and being the member of SAARC we should experiment each others’ technologies and research findings in other ecologies to help develop food secure region,” he remarked.

Malik observed that the SAARC countries had had great potential to cooperate with each other for the development of agriculture sector, however there was need to cooperate and share research and technology with the member countries to help them develop their agriculture on modern lines.

He praised Pakistan for developing the state-of-the-art National Agricultural Research Centre (NARC), which he said was not only contributing for the agricultural development of Pakistan but could play an important role in regional agriculture development.

Posted on

Caterpillar’s latest restructuring move could cut 880 jobs

CHICAGO (Reuters): Caterpillar Inc (CAT.N) will close two facilities in Texas and Panama and is also considering shutting its engine manufacturing plant in Illinois as part of a strategy to boost profitability and better handle business cycles, but the move could cut 880 jobs.

The plant closures, which were announced internally over the past two months, were confirmed to Reuters by a company spokeswoman on Friday.

She said the move will affect its work tools facility in Waco, Texas, and its demonstration center in Panama.

The world’s largest heavy-duty equipment maker emerged last year from the longest downturn in its history, when sales dropped more than 40 percent between 2012 and 2016.

The struggle led not only to a leadership change, but also resulted in a credit rating downgrade by Moody’s.

Chastised by the sales slump, the Deerfield, Illinois-based company has embarked upon a restructuring strategy, looking to squeeze more production out of its existing factories, focusing on lean manufacturing, margin expansion and asset efficiency.

Separately, Caterpillar’s Progress Rail unit is contemplating the closure of its engine manufacturing facility in LaGrange, Illinois, shifting the work to Winston-Salem, North Carolina, and outside suppliers.

“If the LaGrange decision is finalized, the closure would impact approximately 600 full-time positions related directly to engine manufacturing,” Caterpillar’s spokeswoman said.

The plant closure news comes as some U.S. manufacturers are grappling with President Donald Trump’s decision to impose import duties on steel and aluminum imports, which is expected to inflate input costs for equipment makers like Caterpillar.

The company’s shares were up 1.6 percent at $156.99 on Friday afternoon.

Since 2013, Caterpillar has reduced its construction and energy and transportation assets by more than $4 billion.

The full-time workforce is smaller too. Even as a recovery in key markets is driving up production at its factories, Caterpillar is relying more on workers with flexible contracts to cater to the improving demand.

Caterpillar had 116,700 workers globally – including both fulltime and those with flexible contracts – at the end of last year.

Instead of investing in new factories, the company is spending money on expanding its services business and enhancing e-commerce capabilities.

The plan aims to eventually lift Caterpillar’s adjusted operating margin to 14-17 percent when annual sales reach $55 billion. The company had sales of $45.5 billion in 2017.

Judging from recent results, the plan seems to be working. The adjusted operating margin swelled to nearly 14 percent last year, its highest level in at least 10 years, from 7 percent in 2016, according to Thomson Reuters data.

In its focus on operating discipline, Caterpillar’s restructuring program is similar to the strategy Deere & Co (DE.N) has pursued for nearly two decades as it seeks to boost returns for shareholders.

That discipline has stood the Moline, Illinois-based company in good stead, helping it sustain returns on capital and investment through varying economic cycles.


Posted on

Wall Street’s tech love affair might end in tears

SAN FRANCISCO (Reuters): Outsized returns delivered by (AMZN.O), Netflix (NFLX.O) and other heavyweight technology stocks have made them heroes on Wall Street, but some strategists warn that investors’ reliance on them exacerbates the risk of a steep downturn.

Amazon’s 35 percent surge in 2018 has pushed its market capitalization up to $770 billion, equivalent to 3 percent of the S&P 500 and close behind Apple’s nearly 4 percent share of the index.

Apple (AAPL.O), Facebook (FB.O), Amazon, Netflix and Google-parent Alphabet (GOOGL.O) have grown their collective market value by more than 40 percent in the past year to $3 trillion, and they now account for a quarter of the Nasdaq Composite Index .IXIC.

Technology stocks have been widely viewed in recent months as a “crowded trade,” a situation where most investors have the same opinion, increasing the potential for a volatile selloff if sentiment changes.

“It’s a big momentum trade, investors don’t care if they’re paying 15 or 20 or even 50 times earnings,” said Mike O’Rourke, Chief Market Strategist at JonesTrading. “The problem is, once those names start giving up those gains, then the market starts to have problems.”

Investors have been attracted to those stocks for good reason: Amazon’s revenue ballooned 31 percent to $178 billion last year, while Netflix is expected by analysts on average to more than double its net income to $1.2 billion in 2018. An expected interest rate hike by the U.S. Federal Reserve on Wednesday may not have a strong effect on technology companies, which generally rely less than other kinds of companies on debt.

The S&P 500 information technology index .SPLRCT dipped by an average of 0.3 percent in the five-session period following the Fed’s four most recent rate hikes, in line with S&P 500, according to Thomson Reuters data.

Investors nervous about how much longer a nine-year bull market can last have favored big tech names as among the most reliable on the stock market because their business models are often viewed as disruptive and less susceptible to economic downturns, at least over the long run.

The popularity of Amazon, which is pushing beyond online retail and cloud computing into supermarkets and even healthcare, has left it trading at 167 times expected earnings, up from around 100 a year ago, according to Thomson Reuters Datastream. By comparison, the S&P 500 is trading at about 17 times expected earnings.

“If you ask anyone right now, if it’s a business owner they’ll say they’re afraid of Amazon. If they’re an investor, they’ll tell you Amazon is going up forever,” said Andrew Bodner, president of Double Diamond Investment Group in Parsippany, New Jersey.

“Overall, it creates more volatility for the market because everyone owns Amazon, and if Amazon goes down you’ll see that reflected,” Bodner said.

Investors’ increased reliance on passively managed index funds has also contributed to the rally in technology shares because the companies’ inclusion in the S&P 500 and other indexes means money will be poured into them even if they have expensive earnings multiples, O’Rourke said.

Momentum for some major technology stocks is already showing signs of moderation. Facebook has fallen 5 percent after hitting a record high at the start of February, with some investors worried that people are spending less time on the social media platform.

Posing a potential threat to the rally, the S&P 500 technology index is trading at a relatively expensive 18.8 times expected earnings, 12 percent above its 15-year average, according to Thomson Reuters Datastream.

While S&P 500 information technology earnings per share are expected to grow by a healthy 17.5 percent this year, that’s less than last year’s 20.8 percent surge and lower than the 19.5 percent earnings expansion expected for the entire S&P 500, according to Thomson Reuters I/B/E/S. Technology companies may be benefiting more modestly than others from corporate tax cuts enacted this year, according to CFRA investment strategist Lindsey Bell.

Even as the S&P 500 wavered over worries that President Donald Trump might spark a trade war, the Nasdaq on Monday closed at a record high, more than bouncing back from a deep selloff across Wall Street only a month ago.

“People are going with what works, and if tech was working before the shakeout in February, then they’re going to stay in it,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.


Posted on

Action plan regarding FATF will be ready by June, assures Miftah Ismail

ISLAMABAD (APP): Prime Minister’s Adviser on Finance, Miftah Ismail, said on Friday that the government is reviewing the recommendations of the Financial Action Task Force (FATF) regarding measures to tackle money laundering and terrorism financing.

Addressing a news conference, Ismail said an action plan in this regard would be ready by June, adding that the government is looking into what more could be done on this front.

Moreover, the finance adviser said that the imports related to power plants have increased substantially, adding that the concerns shown by the International Monetary Fund (IMF) regarding the country’s economy are correct.

Ismail warned that the current account deficit is increasing continuously and warned that in the coming years, the country’s debt will rise further.

He claimed however that whosoever is in power will not face any difficulties to return the debt.

Talking about state-run companies such as the Pakistan Steel Mills and the Pakistan International Airlines, the finance adviser said these organisations are running in huge losses.

“The steel mills could not pay its gas bills. The number of employees there are ten times higher than international practice,” said Ismail.

He recalled that the federal government offered the Sindh government to buy the PSM for one rupee but the provincial government rejected the offer.

Ismail also termed his recent statement about selling the PSM for free to whosoever settles PIA’s losses satire.

In the news conference, Ismail claimed that the country’s economy is not facing any adverse issues and will grow by six per cent in the current fiscal year.

He informed further that the country’s foreign exchange reserves stand at $12.20 billion whereas debt and interest payments amount to $3 billion.

Ismail stressed that revenue collection is showing continuous growth and that the country’s exports will grow sharply in the coming years.

The finance adviser also proposed to talk to China about a free trade agreement, saying the country’s strategy should be to protect the local industry.

He informed that the prime minister will decide about a tax amnesty scheme in a week’s time.

The adivser also said that his boss is Prime Minister Shahid Khaqan Abbasi and former premier and party chief Nawaz Sharif and not the IMF.

Posted on

Ryanair breaks into Turk market

Monitoring Desk

LONDON: Ryanair launches its first flights to Turkey starting June, the company announced on Thursday. The Irish low-cost carrier will start direct flights from Dublin, in Ireland, and Bratislava, in Slovakia, to Dalaman in southwestern Turkey starting June, according to a company statement.

“Ryanair is pleased to announce our entry into the Turkish market, initially with two routes to Dalaman from Dublin and Bratislava commencing in June. Both routes will operate once a week as part of our Summer 2018 schedule.” Ryanair’s Chief Commercial Officer David O’Brien said. AA

Posted on

Airbus warns over GKN takeover bid

Monitoring Desk

LONDON: Airbus has warned it would be “practically impossible” to give new business to engineering giant GKN if it was bought by turnaround specialist Melrose.

GKN makes wing components and other key aircraft parts for Airbus, which is its biggest customer.

However, it is fighting off a hostile bid from Melrose, saying it fundamentally undervalues the firm.

GKN employs more than 59,000 people, with 6,000 in the UK.

Tom Williams, Airbus’s chief operating officer at its commercial aircraft division, said: “The nature of our industry is one that requires a commitment to long-term investment and strategic vision.

“The industry does not lend itself to shorter term financial investment which naturally reduces R&D budgets and limits vital innovation.

“It would be practically impossible for us to give any new work to GKN under such ownership model when we don’t know who will be the long-term investor.”

Earlier this week, GKN rejected what Melrose called its “final” offer. Melrose said the bid valued the company at £8.1bn.

GKN chairman Mike Turner said: “The comments from Airbus that stress the need for long-term investment and strategic vision in our industry emphasise our firmly held belief that Melrose is not an appropriate owner of GKN.

“Its management lacks the relevant experience and its short-term business model is inappropriate for GKN’s customers and investors.”

Christopher Miller, chairman of Melrose, said his company “invests in its businesses for the long term”.

He added: “Under Melrose, shareholders and customers will be able to enjoy a considered and longer-term process of value creation, investment and business enhancement, which is clearly not an option under continued GKN ownership.”MPs’ concerns

GKN also makes parts for Boeing 737 jets and Black Hawk helicopters, as well as parts for Volkswagen and Ford cars.

Under the terms of the Melrose bid, GKN investors would receive 81p in cash and 1.69 new Melrose shares for GKN share they held. GKN shareholders would end up owning 60% of Melrose.

However, GKN says a fall in the Melrose share price has reduced the value of the cash and shares offer.

GKN has fought hard against the bid, offering to give back £2.5bn to shareholders and agreeing to merge its car unit with US company Dana.

The takeover approach has raised fears among unions and MPs that GKN, one of the UK’s largest industrial firms, will be broken up and sold to overseas owners.

The Pensions Regulator has warned that the Melrose takeover could affect the company’s ability to fund its pension scheme.

Last week, a cross-party group of MPs wrote to the Business Secretary, Greg Clark, saying the Melrose takeover should be blocked. (BBC NEWS)


Posted on

HST rates, procedure mother of all ills: FPCCI

F.P. Report

KARACHI: The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) in its proposals for the ensuing Federal Budget has urged the Government to effectively use Sales Tax Scheme to broaden the tax base provided the standard sales tax rate is brought down to 7% non-adjustable and non-refundable to be collected at single stage at import and / or at manufacturing, except high tax earning sectors for the government viz POL, Energy, Telecom, Tobacco and Liquor.

The Proposal added, “In value added chain industry it may be collected at 0.5% at each stage of value addition. However, since a Single Digit Sales Tax rate would require a lot of time for massive amendments in the Sales Tax Act, 1990 therefore, in the meantime the standard Sales Tax rate may be reduced to 15% in V.A.T. mode at first stage and thereafter reduce it gradually @ 1% annually”.

The proposal is a part of the FPCCI presentation being prepared under the Chairmanship of Syed Mazhar Ali Nasir, Senior Vice President, FPCCI and would be presented by the FPCCI to the high-upsof Ministries of Finance and Commerce and FBR for incorporation in the Federal Budget 2018-19 and to the concerned Standing Committees of National Assembly and Senate for seeking their support and recommendations.

The proposal argued that prevailing rate of Sales Tax @ 17% in Pakistan is too high out of which its major part is refunded or adjusted and net tax in the kitty of government comes to around 5% to 6%.

In Los Angeles, one of the richest state in USA, the sales tax rate is 9.25%; India, 13.68%; Indonesia 10% and in most of the Far Eastern Countries, it is between 6% to 8%.

The FPCCI proposal lamented that 17% sales tax rate and its procedure is mother of several ills and stands in the way of its full collection.

Being a consumption tax, its high rate directly impacts inflation, promotes smuggling, encourages massive tax evasion and corruption.


Posted on

Businessmen apprises CC Capital about its issues

F.P. Report

ISLAMABAD: A delegation of Islamabad Chamber of Commerce & Industry (ICCI) led by its President Sheikh Amir Waheed called on Aftab Akbar Durrani and congratulated him on being appointed as Chief Commissioner, Islamabad. Muhammad Naveed Senior Vice President ICCI, Raja Abdul Majeed, Khalid Chaudhry, Sheikh Abdul Waheed and others were in the delegation.

Sheikh Amir Waheed, President ICCI apprised the Chief Commissioner ICT of the key issues of business community. He said that business community of Islamabad was receiving notices for trade license from Director Municipal Administration CDA and Islamabad Market Committee which was not justified.

He said there should be one regulator for trade license to save business community from problems. He said Islamabad Market Committee has imposed taxes on business community without consultation with stakeholders and without determining any legal method for tax enforcement and stressed that Chief Commissioner should look into this matter.

He said property value in Islamabad was assessed at FBR rate and maximum value of stamp paper was Rs.24,000/- due to which large number of stamp papers were required for registration of property in case of sale/purchase. He said the maximum value of stamp paper should be increased to Rs.100,000/- or the method of Punjab Government should be adopted to facilitate property business.

He said Ministry of Interior in collaboration with a public sector organization was going to organize Islamabad Festival. He said ICCI was ready to partner in Islamabad Festival on public-private partnership basis so that people could get good entertainment and business activities could flourish.

He informed that ICCI was planning to organize an industrial expo “Hamara Islamabad” at Parade Ground in April this year for which ICT Administration and ISPR had given positive signals, but CDA has not issued NOC due to which the project has been postponed. Muhammad Naveed Senior Vice President ICCI invited Chief Commissioner ICT to visit Chamber for an interaction with local business community. Raja Abdul Majeed, Khalid Chaudhry, Sheikh Abdul Waheed and others also spoke at the occasion.

Addressing the delegation, Aftab Akbar Durrani, Chief Commissioner ICT said that business community was playing important role in the economic development and assured his full support for resolving their key issues.

He said ICCI suggestion for organizing Islamabad Festival on public-private partnership on regular basis would be given due consideration. He said he would discuss the NOC issue for “Hamara Islamabad” expo with CDA and assured his cooperation for such ventures.

He said ICCI should sent all highlighted issues in writing to him so that he could pursue them for redress. He assured that he would visit ICCI at a later date for an interaction with the local business community.



Posted on

JazzCash, FWO move towards digitized toll fee payments

F.P. Report

ISLAMABAD: Further expanding itself in the domain of digital payments, JazzCash has entered into an agreement with Frontier Works Organization (FWO), whereby it will be digitizing M-Tag recharge. Users can now pay their toll fees on the motorway through JazzCash.

Currently more than a hundred thousand people travel daily on M2 and those using the M-Tag facility have to wait in long queues for cash deposits. As a result of this partnership, customers will not only be able to top up their M-Tag accounts through FWO’s mobile app ‘Smart Motorways’ and the official website, but also through their JazzCash mobile accounts and through the extensive JazzCash retailer network nationwide. Moreover, a JazzCash Payment gateway will also be implemented on the official app and the website.

Speaking on the occasion, Aniqa Afzal Sandhu, Chief MFS & Digital Officer, Mobile Financial Services – Jazz, said, “Digital payment is the simplest, safest, and most convenient way to make regular or recurring payments; hence the reason being that it’s used for transactions like toll tax and utility bills. As a leading digital company, our customer’s financial needs take top priority and we continue to strive hard in providing them with the best services.”

The partnership will be pilot tested at the M2 (ISB-LHR) Motorway and will soon be available for travelers using the M1 and M3.

The Frontier Works Organization is a military engineering organization, and one of the major science and technology commands of the Pakistan Army. It builds civil and military infrastructure for the Government of Pakistan and the Pakistan Armed Forces.

JazzCash, a mobile financial service offering under Jazz’s ecosystem has over 70,000 retail outlets across Pakistan. JazzCash offers a broad portfolio of Branchless Banking services for customers including money transfer, bill payments, bank transfers, mobile accounts services, ATM cards, insurance, savings, payment gateway and payments for a variety of services.

The Frontier Works Organization (FWO) is a military engineering organization, one of the major science and technology commands of the Pakistan Army established in 1966.FWO has special focus on improving the ETTM (Electronic Toll and Traffic Management) Systems.



Posted on

Private sector loans from abroad on rise

Monitoring Desk

ANKARA: The Turkish private sector’s outstanding long-term loans received from abroad rose to $225.7 billion in January 2018, while short-term loans stood at $18.9 billion, according to an official report on Thursday.

The Central Bank of the Republic of Turkey (CBRT) announced that the private sector’s pending long-term loans from abroad rose $5 billion whereas short-term loans — excluding trade credits — increased by $506 million compared to the end of 2017.

By definition, short-term loans have an original maturity of one year or less while long-term loans have an original maturity of more than one year.

“As for the sectoral breakdown by the end of January, of the total long-term loans in the amount of $225.7 billion, 51.2 percent consist of liabilities of the financial institutions, whereas 48.8 percent consist of the liabilities of the non-financial institutions,” the CBRT said.

“In the same period, of the total short-term loans in the amount of $18.9 billion, 75.6 percent consist of liabilities of the financial institutions, whereas 24.4 percent consist of liabilities of the non-financial institutions,” the bank added.

Regarding the currency composition, 58 percent of the total long-term loans were US dollar loans, 35.5 percent are in euros, 4.8 percent were in Turkish lira and 1.7 percent from other currencies, as noted in the report.:

“And of the total short-term loans in the amount of $18.9 billion, 46.6 percent consist of US dollars, 27.7 percent consist of euros and 25.7 percent consist of Turkish lira.

“The private sector’s total outstanding loans received from abroad based on a remaining maturity basis point out to principal repayments in the amount of $71.6 billion for the next 12 months by the end of January.”

The central bank periodically releases the data for the private sector’s long and short-term loans received from abroad by gathering details from credit-based forms submitted by resident financial institutions and companies.

The bank’s next report is slated to be issued on Monday, April 16.AA