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GM’s Maven assembling building blocks for ride, delivery services

General Motors Co’s Maven car sharing and rental unit is expanding its partnerships in ride and delivery services as parent GM considers whether to enter the on-demand mobility business now dominated by Uber Technologies and Lyft Inc.

The trick will be not to alienate the two ride services startups, whose drivers are leasing thousands of GM vehicles.

Maven already has begun to pull away from Lyft, in which GM holds a 9 percent stake, with its own Gig leasing business, officials said. Through Gig, Maven can provide GM vehicles directly to ride-sharing drivers who previously leased them through Lyft Express Drive and Uber Vehicle Solutions.

While executives say its future role has yet to be fully defined, Maven also has been assembling knowledge and expertise. This could enable GM to eventually offer on-demand mobility services, similar to those provided by Uber and Lyft, to a new generation of consumers who buy access to transportation by the hour.

Like other automakers keen to address the sharing economy, GM through Maven is testing a variety of on-demand services, from peer-to-peer car sharing to fractional ownership. So far, opinion is divided on whether and how much such on-demand services will supplant the industry’s traditional vehicle ownership model.

Asked if GM aims to create its own ride and delivery service, Maven boss Julia Steyn says, “You’re on the right track. We are building this out step by step.”

Maven focused initially on car sharing at its launch in early 2016, then quickly added third-party leasing services through Uber and Lyft. Now it has partnered with on-demand delivery services GrubHub (meals), Instacart (groceries) and Roadie (packages), as well as HopSkipDrive, an on-demand ride share service aimed at children of working parents.

The alliances are providing valuable experience and data, according to Peter Kosak, GM’s executive director of urban mobility, helping Maven “to accelerate our deployment (and) learning” of new services.

Maven executives said they expect to bolster the Gig fleet next year with the addition of 2,000-3,000 Chevrolet Bolt EVs as more cities outside California add charging stations.

Maven is still relatively small compared with Uber, whose market value exceeds GM’s. Still, Maven has mushroomed in the past 18 months. Its fleet of nearly 10,000 vehicles has accumulated 170 million miles and provided 17.5 million rides to Lyft and Uber customers, officials said.

Courtesy: Reuters

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Independence Day: Karachittes spent Rs15 billion

F.P. Report

KARACHI: The 70th Independence Day was celebrated in the country with zeal and enthusiasm in the whole country and especially in the Karachi where Karachittes spent more than Rs 15 billion to celebrate the Independence Day.

The Frontier Post learnt that the dwellers Karachi city bought more Rs 50 million flags and other items related to Independence Day and continued their shopping for two weeks.

Atiq Mir, Chairman All Pakistan Traders Union told media that the last year the figure was Rs 10 billion which raised to Rs 15 billion this year for the same event of Independence.

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Buffett divests stake in General Electric

NEW YORK (AFP): Warren Buffett’s Berkshire Hathaway has sold off its stake in General Electric, according to US regulatory papers filed Monday.

Berkshire had previously held 10.4 million shares in the US industrial giant, according to earlier securities filings.

But GE was no longer listed among the 20 or so Berkshire stakes, according to the company’s filing with the Securities and Exchange Commission.

Shares of General Electric are down nearly 20 percent thus far in 2017, a stark underperformance compared with the index, which has risen more than 11 percent.

GE has been hurt by weakness in its oil and gas business.

The company in June announced that longtime chief executive Jeff Immelt was retiring and would be replaced by GE veteran John Flannery. But a disappointing outlook during the company’s July earnings conference call further pressured shares.

As Berkshire Hathaway exited GE, it added a 17.5 million share stake in Synchrony Financial, a credit card company spun out of GE in 2015.

Shares in GE dipped 0.4 percent in after-hours trading to $25.27, while Synchrony rose 4.4 percent to $30.95.

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Saudi budget deficit halves after reforms, oil rebound

JEDDAH (AFP): The ultra-conservative kingdom has moved to diversify its traditionally oil-dependent economy following a sharp fall in crude prices.

The budget deficit dropped by 51 percent to 72 billion riyals ($19.2 billion, 16.2 billion euros) in the first half of 2017, the finance ministry announced.

“This result reflects an improvement in the management of public finances as a result of economic reform introduced through Vision 2030,” said Saad al-Shahrani, a high-ranking ministry official.

The Vision 2030 plan, announced by the kingdom last year, aims to develop Saudi Arabia’s industrial and investment base and boost small- and medium-sized businesses to create local jobs and reduce reliance on oil revenue.

It is the second budget report released by Riyadh since the authorities announced in May they would begin issuing the figures on a quarterly basis to boost transparency.

The kingdom has regularly posted budget deficits since 2014, following a slump in oil prices.

Saudi Arabia, the world’s largest crude exporter, in December projected a budget deficit of $53 billion for this year.December projected a budget deficit of $53 billion for this year.

Revenues for the first half of the fiscal year were up 29 percent to 308 billion riyals ($82.1 billion, 69.4 billion euros) from the same period last year.

Spending in the first six months dropped 2.0 percent to 380.7 billion riyals.

As part of its reforms, Saudi Arabia is due to introduce value-added tax (VAT) in early 2018 along with the UAE and Qatar.

Three other Gulf states — Bahrain, Kuwait and Oman — plan to follow at a later date.

Riyadh announced in June it had begun taxing foreigners working in the private sector as part of its fiscal reforms.

The country is also preparing to sell just under five percent of energy giant Aramco next year.

Saudi Arabia raised $17.5 billion in its first international bond offering in October 2016.

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North Korea factories humming with ‘Made in China’ clothes, traders say

DANDONG (REUTERS): Chinese textile firms are increasingly using North Korean factories to take advantage of cheaper labour across the border, traders and businesses in the border city of Dandong told Reuters.

The clothes made in North Korea are labeled ‘Made in China’ and exported across the world, they said.

Using North Korea to produce cheap clothes for sale around the globe shows that for every door that is closed by ever-tightening UN sanctions another one may open. The UN sanctions, introduced to punish North Korea for its missile and nuclear programs, do not include any bans on textile exports.

“We take orders from all over the world,” said one Korean-Chinese businessman in Dandong, the Chinese border city where the majority of North Korea trade passes through. Like many people Reuters interviewed for this story, he spoke on condition of anonymity because of the sensitivity of the issue.

Dozens of clothing agents operate in Dandong, acting as go-betweens for Chinese clothing suppliers and buyers from the United States, Europe, Japan, South Korea, Canada and Russia, the businessman said.

“We will ask the Chinese suppliers who work with us if they plan on being open with their client – sometimes the final buyer won’t realize their clothes are being made in North Korea. It’s extremely sensitive,” he said.

Textiles were North Korea’s second-biggest export after coal and other minerals in 2016, totaling $752 million, according to data from the Korea Trade-Investment Promotion Agency (KOTRA). Total exports from North Korea in 2016 rose 4.6% to $2.82 billion.

The latest UN sanctions, agreed earlier this month, have completely banned coal exports now.

Its flourishing textiles industry shows how impoverished North Korea has adapted, with a limited embrace of market reforms, to sanctions since 2006 when it first tested a nuclear device. The industry also shows the extent to which North Korea relies on China as an economic lifeline, even as US President Donald Trump piles pressure on Beijing to do more to rein in its neighbour’s weapons programmes.

Chinese exports to North Korea rose almost 30% to $1.67 billion in the first half of the year, largely driven by textile materials and other traditional labour-intensive goods not included on the United Nations embargo list, Chinese Customs spokesperson Huang Songping told reporters.

Chinese suppliers send fabrics and other raw materials required for manufacturing clothing to North Korean factories across the border where garments are assembled and exported.

Factories humming

Australian sportswear brand Rip Curl publicly apologized last year when it was discovered that some of its ski gear, labeled ‘Made in China’, had been made in one of North Korea’s garment factories. Rip Curl blamed a rogue supplier for outsourcing to ‘an unauthorized subcontractor’.

But traders and agents in Dandong say it’s a widespread practice.

Manufacturers can save up to 75% by making their clothes in North Korea, said a Chinese trader who has lived in Pyongyang.

Some of the North Korean factories are located in Siniuju city just across the border from Dandong. Other factories are located outside Pyongyang. Finished clothing is often directly shipped from North Korea to Chinese ports before being sent onto the rest of the world, the Chinese traders and businesses said.

North Korea has about 15 large garment exporting enterprises, each operating several factories spread around the country, and dozens of medium sized companies, according to GPI Consultancy of the Netherlands, which helps foreign companies do business in North Korea.

All factories in North Korea are state-owned. And the textile ones appear to be humming, traders and agents say.

“We’ve been trying to get some of our clothes made in North Korea but the factories are fully booked at the moment,” said a Korean-Chinese businesswoman at a factory in Dalian, a Chinese port city two hours away from Dandong by train.

“North Korean workers can produce 30% more clothes each day than a Chinese worker,” said the Korean-Chinese businessman.

“In North Korea, factory workers can’t just go to the toilet whenever they feel like, otherwise they think it slows down the whole assembly line.”

“They aren’t like Chinese factory workers who just work for the money. North Koreans have a different attitude – they believe they are working for their country, for their leader.”

And they are paid wages significantly below many other Asian countries. North Korean workers at the now shuttered Kaesong industrial zone just across the border from South Korea received wages ranging from a minimum of around $75 a month to an average of around $160, compared to average factory wages of $450-$750 a month in China. Kaesong was run jointly with South Korea and the wage structure – much higher than in the rest of North Korea – was negotiated with Seoul.

Workers in China

Chinese clothing manufacturers have been increasingly using North Korean textile factories even as they relocate their own factories offshore, including to Bangladesh, Vietnam and Cambodia.

“Wages are too high in China now. It’s no wonder so many orders are being sent to North Korea,” said a Korean-Chinese businesswoman who works in the textiles industry in Dandong.

Chinese textile companies are also employing thousands of cheaper North Korean workers in China.

North Korea relies on overseas workers to earn hard currency, especially since UN sanctions have choked off some other sources of export earnings. Much of their wages are remitted back to the state and help fund Pyongyang’s ambitious nuclear and missile programmes, the UN says.

The new UN sanctions imposed on North Korea this month ban countries from increasing the current numbers of North Korean labourers working abroad.

China does not disclose official figures for the number of North Koreans working in factories and restaurants in China, although numbers are down from a peak period two to three years ago, according to Cheng Xiaohe, a North Korea specialist at Beijing’s Renmin University.

“It’s a hassle to hire North Korean workers though,” the Korean-Chinese businesswoman from Dalian said. “You need to have the right set-up. Their living space has to be completely closed off, you have to provide a classroom where they can take classes every day. They bring their own doctor, nurse, cook and teachers who teach them North Korean ideology every day.”

One clothing factory that Reuters visited in Dandong employs 40 North Korean workers. They fill smaller orders for clients who are more stringent about their supply chains and expressly request no production inside North Korea.

North Korean factory workers in China earn about 2,000 yuan ($300.25), about half of the average for Chinese workers, the factory owner said.

They are allowed to keep around a third of their wages, with the rest going to their North Korean government handlers, he said. A typical shift at the factory runs from 7:30am to around 10pm.

The workers – all women dressed in pink and black uniforms – sat close together behind four rows of sewing machines, working on a consignment of dark-coloured winter jackets. The Chinese characters for ‘clean’ and ‘tidy’ were emblazoned in bold blue lettering above their heads and the main factory floor was silent but for the tapping and whirring of sewing machines

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Finance Minister lauded for clearing refund claims of Rs 23 bln

ISLAMABAD (APP): The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) lauded Finance Minister Ishaq Dar for clearing pending refunds of Rs 23 billion, terming is a step which will encourage exporters and taxpayers.

“The government has fulfilled its promise to the business community for clearing their refunds dues where Refund Payment Orders were issued until April 30, 2017, said Atif Ikram Sheikh, Chairman FPCCI Regional Committee on Industries.

He said the business friendly PML-N government has always remained sensitive to the issues faced by the business community arising from stuck up refunds which is encouraging.

He said that exports have shown growth in the first month of the current fiscal by 10.6 percent while the payment of pending refund claims will boost external trade in the months to come.

Atif Ikram Sheikh said that tax collection has increased from Rs 1946 billion to Rs 3362 billion in last four years which indicates the hard work of the FBR team led by Ishaq Dar.

The government has taken some bold steps to eliminating tax exemptions and brought Rs 323 billion into the system but a lot is yet to be done as tax potential is not less than Rs 6000 billion, he added.

The business leader said that efforts were needed to reduce the size of the undocumented economy and increase the tax to GDP ratio up to 15 percent as the size of the GDP has crossed $300 billion dollar mark.

The liquidity problem of the taxpayers has been resolved to some extent and the government should to clear all the refund claims as soon as possible and also look into the matter of increased cost of doing business which is making our exports uncompetitive in the international market, he said.

He called upon increased warmth in relations between tax authorities and taxpayers which is vital for improving revenue generation without which economic growth cannot be achieved.

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Britain says will not stay in EU via ‘back door’

Web Desk

LONDON: After weeks of feuding, two key figures in Britain’s cabinet came together Sunday to say any post-Brexit transition would not be a “back door” to continued European Union membership.

Finance Minister Philip Hammond, who favours a softer, pro-business Brexit, and International Trade Secretary Liam Fox, a hardline supporter of Britain leaving the EU, have clashed over the UK’s future outside the bloc.

But in a joint article for The Sunday Telegraph newspaper, they agreed there should not be a “cliff-edge” when Britain leaves in March 2019.

They said any transition period would be “time-limited” and that Brexit would mean Britain pulling out of both the European single market and the customs union.

“We want our economy to remain strong and vibrant through this period of change. That means businesses need to have confidence that there will not be a cliff-edge when we leave the EU in just over 20 months’ time,” they

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Trade deficit widens by 55 percent in July 2017

F.P. Report

KARACHI: Trade deficit in the first month of the new fiscal year widened by 55 percent whereas exports registered an increase of 10.58 percent.

According to the figures released by the Pakistan Bureau of Statistics the July trade deficit widened by 55 percent to 3.204 billion dollars as against 2 billion dollars of the same period of 2016.

Exports in July suffered a fall of 14.71 percent to 1.631 billion dollars compared with June 2017 amounting to 1.912 billion dollars of last year. However, when compared to July 2016, exports recorded a growth of 10.58 percent from the level of 1.475 billion dollars.

The pace of imports showed an upward trajectory and recorded a growth 36.74 percent to 4.835 billion dollars from 3.536 billion of July 2016 level, the data said.

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Pakistan Stock Exchange loses 1500 points this week

Web Desk

KARACHI:  The dark shadows of political fallout rule the Pakistan Stock Exchange during the outgoing week where the index lost more than 1500 points where volume also dipped sharply because of lack interest of seasoned investors and financial institutions.

The week started off on a bearish note with index declining by 3.4 percent on week on week basis to close at 45,288pts. Anxiety over domestic politics heightened as ousted Prime Minister Nawaz Sharif kicked off a populist march while another prominent leader announced to hold sit in and rallies. The activity in local bourse remained dull amidst political noise as evident from a decrease of 46 percent on week on week basis.

Selling witnessed in the oil and exploration stocks as U.S crude futures for September delivery were down 0.76 percent at $48.20 a barrel, the lowest since July 26. Political situation is expected to keep market under pressure for as long as it doesn’t settle, which is why high net worth individuals, some of the mutual funds and banks adopted a cautious approach.

An analyst from BMAA capital said “we do not expect market to pick up its pace in the coming week and anticipate investors to remain cautious as foreign investors have been net sellers throughout the week”.

He added some local players have been net buyers but their quantum has not been able to pull the market in the green zone.

“We believe development on political front and earnings announcement will be the key trigger for market direction, where any positive surprise in earnings announcement will likely cause bulls to provide the much needed support to the index” he elaborated.

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Political tensions depress world stocks

The world’s stock markets slid again Thursday with investors seeking safe havens as President Donald Trump doubled down on his warnings to North Korea over its nuclear program.

Trump, whose threat this week to bring “fire and fury” was dismissed by North Korea, said Thursday his statement might not have been “tough enough.”

European equities indexes were a sea of red at the close, while Wall Street indices suffered their biggest losses in near three months, deepening their fall after Trump’s mid-afternoon remarks further stoked fears of a miscalculation that could lead to catastrophic consequences on the Korean peninsula and beyond.

“Risk aversion is once again the name of the game… as geopolitical tensions mount and investors head for cover in the traditional safe havens,” said Oanda analyst Craig Erlam.

But for now it seems that “traders still believe the prospect of military action is very small but precautions are still being taken nonetheless, as this still has the potential to escalate very quickly and unexpectedly,” he said.

London’s benchmark FTSE 100 index was down 1.4 percent at the closing bell, also driven lower by losses in the commodity sector.

In the eurozone, the Paris CAC 40 lost 0.6 percent and Frankfurt’s DAX 30 shed some 1.2 percent.

All three US indices fell sharply, with the broad-based S&P 500 tumbling 1.5 percent.

But safe havens benefited from the move away from stocks with gold rising by just under one percent after surging 1.3 percent Wednesday.

Potentially catastrophic

The European and American dips followed similar trading in Asia, where equities also were back in the red, snuffing out a nascent recovery.

Markets had taken heart earlier in the day after US Secretary of State Rex Tillerson sought to play down the escalating war of words between Washington and Pyongyang.

But losses soon resumed, with Tokyo edging down as the Nikkei again came under pressure from the strength of the safe-haven yen, which hit eight-week highs Wednesday against the dollar.

Hong Kong shed more than one percent and Shanghai also closed lower, while Seoul shares continued their sell-off after slumping Wednesday, with the won again softening.

On commodities markets, oil advanced initially after figures from the American Petroleum Institute showed a sharp decrease in stockpiles.

But then oil prices succumbed to the overall selling pressure for risky assets, aided by an OPEC report showing crude production by cartel members increased slightly in July, including Saudi Arabia, which had championed efforts by the organization and its allies to extend an output freeze.

In earnings news, retailers were under pressure after Macy’s and Kohl’s each reported lower second-quarter sales, reviving worries about consumer discretionary stocks. Macy’s sank 10.3 percent and Kohl’s lost 5.8 percent.

Key figures around 2045 GMT

New York – Dow: DOWN 0.9 percent at 21,844.01 (close)

New York – S&P 500: DOWN 1.5 percent at 2,438.21 (close)

New York – Nasdaq: DOWN 2.1 percent at 6,216.87 (close)

London – FTSE 100: DOWN 1.4 percent at 7,389.94 points (close)

Frankfurt – DAX 30: DOWN 1.2 percent at 12,014.30 (close)

Paris – CAC 40: DOWN 0.6 percent at 5,115.23 (close)

EURO STOXX 50: DOWN 1.0 percent at 3,433.54

Tokyo – Nikkei 225: DOWN 0.1 percent at 19,729.74 (close)

Hong Kong – Hang Seng: DOWN 1.1 percent at 27,444.0 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,261.75 (close)

Euro/dollar: UP at $1.1777 from $1.1758

Pound/dollar: DOWN at $1.2979 from $1.3003

Dollar/yen: DOWN at 109.21 yen from 110.02 yen

Oil – West Texas Intermediate: DOWN 97 cents at $48.59 per barrel

Oil – Brent North Sea: DOWN 80 cents at $51.90 per barrel

Courtesy: REUTERS