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ZTE apologizes after paying disastrous price

SHENZHEN (Reuters): The chairman of ZTE Corp apologized to staff and customers on Friday after the Chinese technology firm agreed to pay a $1 billion fine to the United States to end a supplier ban that has crippled its business.

The deal allows China’s second-largest telecoms equipment firm to restart operations, reaffirm supplier relationships and rebuild trust with global clients, as it works to move on from an episode which it said threatened its very existence.

But industry experts estimate it would take at least a month for ZTE to ship phones again after the ban is lifted, while employees fear job cuts, wage reductions and a potential loss of customers, as the firm is set to reshuffle senior management.

The company agreed on Thursday to pay the fine and overhaul its leadership to lift the ban which has been in place since April. The ban, which traces back to a breach of a US embargo on trade with Iran, had prevented ZTE from buying the US components it heavily relies on to make smartphones and other devices. The case has become highly politicized and a key focus of whipsawing talks as Washington and Beijing look to avert a trade war.

In a memo sent to staff on Friday, ZTE Chairman Yin Yimin apologized to employees, clients, shareholders and business partners and said the firm would look to learn from its errors and hold those responsible accountable, a member of staff told Reuters.

“This issue reflects problems that exist with our firm’s compliance culture and at management level,” Yin wrote, according to the staffer, adding the incident was caused by the mistakes of a few ZTE leaders and employees. “The activation of the denial order has caused huge losses for the company. The firm has paid a disastrous price.” ZTE did not respond to multiple requests for comment.

“Paying the fine is no problem, the real difficulty lies ahead and getting future business, especially overseas. Market confidence is lost,” another employee told Reuters. The person added that staff feared there would be pay cuts and possible job losses. “Bonuses are bound to be affected.”

Under the deal, ZTE will change its board and management within 30 days, pay a $1 billion fine and put an additional $400 million in escrow. The deal also includes a new 10-year ban that is suspended unless there are future violations.

A third member of staff said all ZTE employees were being called to have group meetings to “deeply reflect” on the case, including attending compliance training and writing up reports.

The management shake-up would also likely create instability – at least in the short-term.

“If so many bosses are gone at the same time, what would the succession process be like? There’s going to be lots of internal power struggles to come,” the third employee said.

The employees declined to be identified because of the sensitivity of the matter.

ZTE pleaded guilty last year to conspiring to evade US embargoes by buying US components, incorporating them into ZTE equipment and illegally shipping them to Iran. The new sanction in April was because the firm breached terms of an agreement about disciplining executives responsible for the original violations.

Analysts said the fine – after a $1.2 billion settlement last year – would be a heavy burden, but not crippling for the company. “ZTE can financially handle it,” said brokerage Jefferies in a report late on Thursday.

The Shenzhen-listed firm had close to 30 billion yuan ($4.7 billion) of cash and short-term investment as at the end of March. Net profit last year was around $795 million.

“We do not believe ZTE will need to immediately raise any debt or equity financing to fund the cash penalty,” said Jefferies.

At ZTE’s headquarters in Shenzhen, most employees Reuters spoke to were reticent to comment on the US deal.

One office worker, who only gave his surname Liu, said he was not worried about the firm making major staff cuts or failing. “I’m not planning on looking for a new job.”

As a smartphone seller, ZTE was ranked the fourth-biggest in the United States in the first quarter of the year with an 11.4 percent market share, but has since seen sales of its handsets suspended.

“It will be very difficult for ZTE to keep its position as the fourth-biggest smartphone vendor in the US for 2018” considering damage to the brand, said Shanghai-based analyst Mo Jia at technology researcher Canalys.





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World stocks dip as central bank talk, trade, dull risk appetite

LONDON (Reuters): World stocks slipped on Friday as expectations that trade tensions will dominate this weekend’s summit of G7 countries and renewed talk of monetary tightening by major central banks weighed on risk sentiment. The MSCI All-Country World index.MIWD00000PUS, which tracks shares in 47 countries, was down nearly half a percent by afternoon in Europe, although it was still on track to break a three-week streak of losses. Futures indicated Wall Street was set to open lower.

Fears of a trade war, expectations of more rate hikes in the United States, and the prospect that the European Central Bank will soon signal a winding-down of its massive monetary stimulus all contributed to the risk-off tone, investors said.

The US Federal Reserve is widely expected to raise interest rates next week, its second hike this year, and may hint at four rate increases in 2018 rather than the three that have been widely anticipated.

ECB policymakers meeting on June 14 will debate whether to end bond purchases later this year, the bank’s chief economist said this week. His hawkish message sent the euro to a three-week top, hit emerging markets, and spurred demand for safe-haven bonds.

Before those meetings, however, markets will watch the fallout from the G7 summit in Quebec, where the mounting risk of a tariff war between the United States and its major trade partners will be in the spotlight.

Officials concede the mood around the summit is likely to be exceptionally tense. US President Donald Trump says tariffs are needed to protect US industry, but Canada and the European Union have denounced them as illegal and are preparing retaliatory measures.

French President Emmanuel Macron warned Trump in a rare rebuke on Thursday that the other six members of the G7 could form their own grouping if necessary, adding that “nobody is forever”.

“None of this makes investors particularly hopeful that the two ‘allies’ will reach an agreement and avoid an escalation of the trade spat that has caused so much worry for investors,” said OANDA markets analyst Craig Erlam. “They (investors) may have taken last week’s tariffs in their stride, largely because it had been lined up for months and priced in” but further escalations will hit confidence in the markets and could trigger further corrections, he added.

An unprecedented US-North Korea summit scheduled for June 12 in Singapore, with Washington seeking to pressure Pyongyang into abandoning its nuclear weapons program, is giving investors another reason for caution.

MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS fell 1.1 percent after six straight sessions of gains took it to its highest since mid-March. It was on track for a weekly gain of more than 1 percent.

Chinese shares slipped, with the blue-chip Shangai-Shenzhen index.CSI300 down 1.7 percent and Hong Kong’s Hang Seng.HSI declining 1.5 percent.

Japan’s Nikkei average.N225 and South Korea’s KOSPI.KS11 were off 0.6 percent and 0.8 percent, respectively, while Australian shares ended 0.1 percent lower. The pan-European STOXX 600 index was on track for its third weekly loss in a row, with renewed strength in the euro also weighing. It was last down 0.3 percent.

Italy’s government bonds faced renewed selling pressure, as the risk aversion in world markets and unease about Rome’s spending plans set yields on short-dated debt up for their biggest weekly rise since 2012.

“A few things are contributing to nervousness today — the trade issues are back on, then there is the Italy situation and we are not sure how the ECB will respond to that,” said Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers. “And in emerging markets there are some idiosyncratic risks (Turkey, Argentina and Brazil) which are becoming worrying.” He remained “cautious” on adding risk, as “none of these issues seem to have a clear short-term resolution.”

The dollar.DXY rebounded almost half a percent from near three-week lows against a basket of currencies, helped by the strong jobless claims numbers in the US on Thursday.

It has come under pressure this week as the euro bounced back from 10-month lows thanks to ebbing political concerns over Italy and the possible ECB moves over its bond purchases.

The dollar fell against the Japanese yen JPY= to 109.25, but remained well below a four-month top of 111.39 touched in May. The euro EUR= fell over half a percent to $1.1732 after four straight sessions of gains took it to its highest since mid-May.

In commodities, copper CMCU3 was off a 4-1/2-year high touched on Wednesday.

Oil prices fell as surging US output and signs of weakening demand in China outweighed support from supply woes in Venezuela and OPEC’s production cuts.

US crude CLc1 fell over half a percent to $65.59 a barrel, while Brent LCOc1 dropped 0.9 percent to $76.64.

Spot gold XAU= slipped 0.1 percent at $1,298.63 an ounce.




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NBP, Balochistan’s Excise, Taxation & Anti-Narcotics Deptt sign agreement

F.P. Report

QUETTA: The National Bank of Pakistan (NBP) signs an agreement with Baluchistan’s Excise, Taxation and Anti-Narcotics department for the automation of tax collection system across the province.

The agreement was signed by Muhammad Farooq, NBP’s Executive Vice President, Payment Services and Digital Banking Group and Fateh Muhammad Khajak, Director General Excise, Taxation and Anti-Narcotics Baluchistan. The NBP President, Saeed Ahmad and Baluchistan’s Secretary Excise and Taxation, Zafar Ali Shah Bukhari were also present at the occasion. The JazzCash is collaborating with NBP in the tax automation project.

Speaking at the occasion, Zafar Ali Shah Bukhari, Secretary Excise, Taxation and Anti-Narcotics, Baluchistan, said that earlier the taxes were collected manually through NBP’s branches, which had its own challenges and complications. Reconciliation of collected money was one of the biggest problem while at times transparency and timeliness were compromised in manual system, he added and said that the implementation of new automated system would make the process much easier for customers and will provide real time validation as well.

Saeed Ahmed, President NBP said that automation and digitization of all government procedures and payments & taxes collections is one of the primary objectives all federal and provincial governments to achieve complete E-governance. The NBP is assisting all the provincial governments in digitalizing their various payments, fee and taxes collection systems. He mentioned that the NBP has already inked MoUs and agreements with various provincial and federal departments for digitally colleting their fee and payments including Directorate General of Immigration & Passports, Bureau of Emigration and Overseas Employment, Public Service Commission KPK, Islamabad Traffic Police, Driving License Sindh and Dealer Vehicle Registration System (DVRS) and collection of e-Tax in Punjab.

He further stated that NBP is playing a major role in enhancing the financial inclusion by aligning with digital banking revolutions in Pakistan. NBP is in process of developing systems for digitization of all G2P & P2G payments. He highlighted that NBP is actively working to digitalize its banking services built on a collaborative model with Telcos and other stakeholders. This will help in promoting Alternate Delivery Channels and enabling the right environment for inclusive growth and achieve the goal of financial inclusion, Saeed said.

Being a public institution, he said, it is our mandate to develop a digital suite of financial services with an access to market players through any available digital channels for enhanced customer convenience with focus on enabling e-governance infrastructure. Our substantial participation in e-credit program, as well as forging links with other stakeholders including telecom service providers is expected to boost formalization of the economy. He said that Bank’s biggest projects recently, was to rapidly grow our ATM network which already grew from 376 ATMs in the year 2014 to over 1,000 ATMs in the year 2016. This exponential growth in our ATMs extended financial services to far flung areas of the country, where previously no other bank had ventured even in the remotest of areas in FATA. He said that his aim is to geographically cover the NBP’s services from the peaks of Karakoram to the Arid Zones of Baluchistan.

Regarding the agreement with Baluchistan tax department, President NBP said that the NBP has chosen JazzCash to be its official partner in branchless banking project. People could pay their due taxes and payments from the JazzCash outlets and shops across Baluchistan and they wouldn’t need to visit Excise and Taxation department. Through this service, outstanding amounts of the relevant taxes can be extracted and payment options will be available for real time collections through JazzCash. Saeed said that this facility will minimize the operational hassles of the Excise and Taxation Department and also provide convenience, comfort, transparency and fast track options to general public.

Saeed Ahmad said that initially this will be rolled out through JazzCash and gradually other partner mobile money operators as well as ADCs of the bank i.e. Mobile App. And ATMs will be added in due course.

The NBP’s Head of Central Payment Services and Digital Banking Group, Farhan Durrani, Muhammad Sultan Jaffar, Regional Head Quetta, NBP, Qazi Muhammad Ali/Director IT Excise and Taxation, Faheem Mumtaz, Head of B2G JazzCash, Muhammad Ghufran Abbassi, Regional Head, MFS JazzCash, Naveed Ejaz, Regional Head, B2G JazzCash, Shakeel Tareen, Regional Head Sales, Balochistan Jazz Cash and others attended the ceremony.


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Oil prices stable over increasing US supply 

Monitoring Desk

SINGAPORE: Oil prices were stable on Friday, supported by Venezuela’s struggles to meet its supply obligations and by ongoing output cuts led by producer cartel OPEC, although surging U.S. crude output was looming over markets.

Brent crude futures, the international benchmark for oil prices, were at $77.24 per barrel at 0317 GMT, a notch below their last close.

U.S. West Texas Intermediate (WTI) crude futures were up 9 cents at $66.04 a barrel.

Prices were pushed up by supply trouble in Venezuela, where state-owned oil firm PDVSA is struggling to clear a backlog of around 24 million barrels of crude waiting to be shipped to customers.

Despite this, oil markets are not unanimously bullish.

One of the key features of oil markets recently has been the widening discount of U.S. WTI crude versus Brent, which has almost quadrupled since February to more than $11 per barrel, its steepest discount since 2015.

Brent has been pushed up by voluntary production cuts led by the Middle East dominated producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) and by top producer Russia, which were put in place in 2017.

The group and Russia are due to meet at its headquarters in Vienna on June 22 to discuss production policy.

While the outcome of those talks is unclear, most analysts do not think that OPEC will turn on its taps all the way.

In North America, however, surging U.S. output has pressured WTI crude futures.

U.S. crude oil production hit another record last week at 10.8 million barrels per day (bpd).

That’s a 28 percent gain in two years, or an average 2.3 percent growth rate per month since mid-2016 and puts the United States close to becoming the world’s biggest crude oil producer, edging nearer to the 11 million bpd churned out by Russia.


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CPEC changed the dynamics of Pakistan’s economic landscape

Monitoring Desk

ISLAMABAD: Five years after its launch, the China-Pakistan Economic Corridor (CPEC) has achieved magnificent results that help lay a solid infrastructure foundation for Pakistan’s economic development.

Under the long-term and systematic framework of CPEC, several projects in areas of energy, transportation infrastructure and port construction have been completed.

The unprecedented CPEC projects are changing Pakistan’s business and economic landscape and facilitating them with basic requirements, which has helped the country improve its international credibility and increase its economic growth rate to 5.8 percent in fiscal 2018 from the previous year’s 3.8 percent, according to official figures.

Former Prime Minister Shahid Khaqan Abbasi, who recently concluded his tenure, said last month that CPEC and cooperation with China have helped Pakistan emerge as a rising economy in the world.

The project under CPEC would accelerate economic development and further link Pakistan with China, Central Asia and other parts of the world, said Abbasi.

A couple of years ago, Pakistan was facing severe power shortage with a power cut of up to 20 hours a day. The unsolved power crises prevailing for years was causing an unrest among the public and casting negative effects on the country’s industries and other economic activities.

Pakistan’s Ministry of Energy said that the completed CPEC power projects have brought a great change in the energy sector by bringing the power cut hours to zero form 12-14 hours a day in 70 percent of the country.

Two coal-fired power projects equipped with the latest state-of-the-art environment-friendly technology — the 1,320-megawatt Sahiwal coal-fired power project in the country’s Punjab and the Port Qasim coal-fired power plant with the same capacity in southern port city Karachi — have already started production.

The two projects are expected to generate 18 billion kWh of electricity together annually, which can cater for the needs of eight million local families.

The CPEC power projects not only have eased daily lives of Pakistanis but are also creating hundreds of thousands of jobs by helping restart the industries that were closed due to power shortage.

Besides the coal-fired power plants, CPEC also provides new energy to Pakistan so as to diversify the country’s energy sources to maintain its energy security. Part of the Quaid-e-Azam Solar Park is functional and three wind power farms are also supplying electricity in southern Sindh province, while two such projects will also start their commercial operations later this year.

Pakistan’s Ministry of Planning, Development and Reforms said that energy projects under CPEC will double the energy-thirsty country’s current capacity of electricity production after their completion.

Yasir Rehman, an anchor from the official Pakistan Television, said that the developed infrastructure under CPEC is bringing stimulus to the Pakistani economy, creating jobs and improving business by starting a constructive process.

“Uninterrupted power supply is helping industries increase production, creating an ideal atmosphere for Pakistan’s economy,” said Rehman, adding that with the functionalized Gwadar port, CPEC will benefit every common Pakistani.

Gwadar, the ending point of CPEC, which was once an ignored small sluggish fishing town located at the Arabian Sea in Pakistan’s southwest Balochistan Province, is now witnessing a wave of development projects which are creating new opportunities for employment and business.

Gwadar port, with the fully functional port terminal, regular cargo service, free zone, business centre, is a symbol of future development and prosperity of Pakistan.

According to China Overseas Ports Holding Company (COPHC), the port’s operator, some 20 companies in different businesses have already joined the Gwadar free zone with direct investment of 3 billion Chinese yuan (over 460 million U.S. dollars).

Gwadar’s local people are feeling the development impetus triggered by the rapidly developing port, construction of new roads, establishment and upgrading of educational institutions and hospitals, construction of a new international airport and installation of water purification plants.

Thousands of people, from labourers to businessmen, have migrated from across the country to Gwadar to grab emerging opportunities for business and employment since the launch of CPEC.

In the meantime, CPEC has also brought major improvements and overhauls to Pakistan’s transportation infrastructure by upgrading and reconstructing already existing roads and building new superhighways.

Several transportation projects under CPEC are forming a road network in the country to improve Pakistan’s internal connectivity as well as with the rest of the world.

On May 26, Abbasi inaugurated the first section of the 392-km Multan-Sukkur Motorway, the largest transportation infrastructure project under the CPEC in Multan of Punjab.

The motorway is expected to cut the travel time between Multan and Sukkur from 10 hours to four hours at the maximum designed speed of 120 km per hour. It will also facilitate travelling in areas located alongside it.

Mumtaz Hussain, a local farmer, told Xinhua that the CPEC motorway had given a new hope of prosperity to his family because now they can easily travel to cities to sell their vegetables at a better rate.

The motorway is a symbol of close cooperation between Pakistan and China, said Abbasi, adding that CPEC is the implementation of Chinese vision of connectivity and opening up under the Belt and Road Initiative that is bringing great economic opportunities to Pakistan and the region.

According to Chinese Ambassador to Pakistan Yao Jing, Chinese companies under CPEC projects have provided over 100,000 jobs to local people and have helped to uplift their living standards through social welfare works, including restoring and establishing schools and technical training centres, providing health facilities, and sending hundreds of youngsters to China for further study.

Former Minister for Planning, Development and Reform Ahsan Iqbal hailed CPEC as it has brought actual positive changes in the lives of millions of Pakistanis.

“CPEC is a national agenda and has been put into implementation in record time due to the solid commitment of both Pakistani and Chinese leadership,” said Iqbal. (Xinhua)


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Asian shares decrease ahead of G-7 summit

Monitoring Desk

TOKYO: Asian shares were moderately lower Friday, as investors awaited the Group of Seven leaders’ meeting, continuing into the weekend, and for European Central Bank and Federal Reserve meetings next week.

KEEPING SCORE: Japan’s benchmark Nikkei 225 shed less than 0.1 percent to 22,813.58 in early trading. Australia’s S&P/ASX 200 inched down less than 0.1 percent to 6,056.00. South Korea’s Kospi lost 0.4 percent to 2,460.14. Hong Kong’s Hang Seng slipped 0.9 percent at 31,229.01, while the Shanghai Composite index shed nearly 0.8 percent to 3,085.80.

WALL STREET: The S&P 500 index lost 1.98 points, or 0.1 percent, to 2,770.37. The Dow Jones industrial average picked up 95.02 points, or 0.4 percent, to 25,241.41, helped by big gains for McDonald’s and Chevron. The Nasdaq composite slumped 54.17 points, or 0.7 percent, to 7,635.07. The Russell 2000 index of small-company stocks slid 8.17 points, or 0.5 percent, to 1,667.77. Both of those indexes set all-time highs the last few days.

GROUP OF SEVEN: Leaders from the Group of Seven wealthy industrialized nations are meeting in Canada, where President Donald Trump’s new tariffs are expected to be a major focus. The White House is expecting a chilly reception from Canada and western European countries.

RATE WATCH: The Federal Reserve is expected to raise interest rates. That would be the second increase in rates this year, and the Fed has said it expects to raise rates three times in 2018.

ENERGY: Benchmark U.S. crude rose 7 cents to $66.02 a barrel. It rose 1.9 percent to $65.95 per barrel in New York Thursday. Brent crude, used to price international oils, fell 7 cents to $77.25 per barrel in London.

CURRENCIES: The dollar fell to 109.71 yen from 109.97-yen late Thursday in Asia. The euro slipped to $1.1804 from $1.1817.


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Euro, bond yields extend gains on ECB while risk appetite grows

LONDON (Reuters): World stocks hit a three-week high on Thursday and the euro and euro zone bond yields extended gains as investors priced in a potentially earlier-than-expected wind-down of ECB stimulus.

The selloff in safe-haven Bunds and US Treasuries drove money into riskier assets, especially financial stocks, despite investors’ anxiety over how a G7 leaders summit that kicks off on Friday will pan out in view of global trade concerns.

Bank stocks, which tend to gain from higher bond yields, drove European shares up in early trade. The pan-European banks index.SX7P jumped 0.6 percent, supporting the STOXX 600.

Banks remain the worst-performing sector in Europe year-to-date, however, having been dented by a selloff triggered by political risk in Italy.

MSCI’s index of world stocks.MIWD00000PUS rose 0.2 percent to its highest since May 14, helped by Asian shares which climbed to an 11-week high overnight.

European stocks pared gains by mid-morning, however, as the euro rose, weighing on exporting companies.

The single currency EUR= hit its highest level since May 15 at $1.1838, and traded up 0.5 percent at $1.1827 by 1033 GMT in its fourth straight session of gains. It helped drive the dollar index.DXY down 0.4 percent to 93.295.

Germany’s benchmark 10-year bond DE10YT=TWEB rose in step with the euro, breaching 0.50 percent for the first time in two weeks on signs that the European Central Bank could soon call an end to its stimulus program.

The selloff in German Bunds spread across the Atlantic as the US benchmark 10-year yield US10YT=RR hit a 2-1/2 week high of 2.9940 percent, edging closer to the 3 percent level it breached a month ago.

The ECB’s Chief Economist Peter Praet said on Wednesday that robust growth made it increasingly confident inflation was on its way back to target, raising chances it may reveal more about the end of the bond-buying program at its meeting next week.

Praet’s comments took the market by surprise, given a recent slowdown in the euro zone economy.

Data on Thursday showed German industrial orders plunged unexpectedly in April, a fourth consecutive monthly drop.

“It’s a complex backdrop where ultimately the economy is not doing badly, but the economic surprises in Europe have not been to the upside,” said Antoine Lesne, head of EMEA strategy and research at State Street’s SPDR ETF.

“Bad momentum has eased the overall backdrop the ECB is navigating – but if you’re looking at the broader macro picture it is still positive for risk assets.”

Analysts at Bank of America Merrill Lynch said Praet’s speech showed the central bank was willing to look through the recent soft patch in data.

The risk-on moves across markets coincided with a calendar of potentially destabilizing political events.

The run-up to the G7 summit has been dominated by a widening divide over trade between US President Trump and the club’s remaining six members. But gauges of investor anxiety, including stock volatility, showed little sign of strain, flummoxing some investors.

The VIX, which measures volatility on the S&P 500.VIX, was last trading at 11.79. It has fallen from more than 50 to less than 12 in just 83 days – a record decline, traders said.

“I am amazed to see everyone so bullish,” said Charles de Boissezon, deputy head of global asset allocation and equity strategy at Societe Generale. “Everyone assumes that…central banks will be behind the curve by default, but it’s not that obvious.” Commodities continued to climb thanks to a still strong global economy and tight supply.

Copper CMCU3 hit its highest level this year at $7,295 per ton, driven up 0.8 percent by supply concerns over disruption at the Escondida mine in Chile. It was on track for its sixth straight day of gains, its longest run since December.

Oil prices also rose as plunging exports from OPEC member Venezuela crimped supply in the market.

Brent crude futures LCOc1 traded up 0.8 percent at $75.93 a barrel and US West Texas Intermediate (WTI) crude CLc1 up 0.6 percent at $65.13. Gold prices edged higher, with spot gold XAU= trading at $1,298.75 per ounce, up 0.2 percent.

In emerging markets, stocks.MSCIEF climbed 0.4 percent to a three-week high, supported by the weaker dollar. UBS analysts declared “buying time” for emerging stocks, upgrading Mexico, Poland and Colombia while downgrading Brazil.


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EU economy grows by 2.4% in first quarter

Monitoring Desk

ANKARA: The EU economy grew by 2.4 percent in the first quarter of 2018 compared to the same quarter last year, according to the European statistical office on Thursday.

“Compared with the same quarter of the previous year, seasonally adjusted GDP [gross domestic product] rose by 2.5 percent in the euro area and by 2.4 percent in the EU28 in the first quarter of 2018, after +2.8 percent and +2.7 percent, respectively, in the previous quarter,” Eurostat said in a statement.

The seasonally-adjusted GDP expanded by 0.4 percent in both the eurozone and 28 EU states, compared to the previous quarter, it said.

The eurozone represents 19 EU member states that use the single currency, euro, while EU28 defines all member countries of the bloc.

Eurostat reported that both Latvia and Poland posted the highest growth compared to the previous quarter with 1.6 percent. “Slightly negative growth was observed in Estonia (-0.1 percent) while GDP in Romania was stable,” the statement added.

Eurostat also revealed that GDP in the US rose 2.8 percent on a yearly basis and 0.5 percent on a quarterly basis.

The household final consumption expenditure went up by 0.5 percent in the eurozone and by 0.4 percent in the EU28 during the first quarter of 2018.

Eurostat stated that household final consumption expenditure had a positive contribution to GDP growth in both the eurozone and the EU28 with 0.1 and 0.2 percentage points.

EU’s and Eurozone’s exports slipped by 0.4 percent and 0.3 percent, respectively during the same period.

“Imports decreased by 0.1 percent in the euro area and were stable for the EU28,” it added. AA



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Dairy prices push FAO food priceindex up in May

Monitoring Desk

ROME: Global agricultural food commodity prices rose in May, with dairy prices jumping significantly. The FAO Food Price Index averaged 176.2 points during the month, up 1.2% from April.

The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. The May increase built on a recent trend featuring rising price quotations of major cereals and dairy products and weak ones for sugar and vegetable oils.

The FAO Dairy Price Index increased 5.5 percent in May, averaging 11.5% higher than a year earlier. Tight supplies in New Zealand, the leading exporter of dairy products, are behind much of the market firmness in recent months. The FAO Cereal Price index rose 2.4 percent from April, marking a 17% increase on the year to reach its highest level since January 2015.

Wheat values increased largely on concerns over production prospects in a number of major exporting countries, while deteriorating harvest prospects in South America led coarse grain prices up. International rice prices were also firm, buoyed by sizable purchases by Southeast Asian buyers.

The FAO Vegetable Oil Price Index declined by 2.6 percent to a 27-month slow. Quoted prices for palm, soy and sunflower oils all dropped, due in part to large global inventories.

The FAO Meat Price Index fell marginally, while the FAO Sugar Price Index posted its sixth consecutive monthly drop, declining 0.5 percent from April, reflecting favourable harvesting conditions in major production areas in Brazil – the largest producer and exporter of sugar in the world.

In the Cereal Supply and Demand Brief, also released Thursday, FAO increased its forecast for the world cereal production in 2018 to 2 610 million tonnes, which if confirmed would represent a 1.5 percent annual drop from the high level of the previous year. FAO pegs this year’s world wheat production at 754.1 million tonnes, up from the previous month’s forecast on account of improved outlooks in several major producing countries, while predicting the production of coarse grains to stand at 1 345 million tonnes, down 3.2 percent from last year’s record high due in part to farmers shifting to more profitable crops and to dry weather in some countries.

Worldwide rice output is expected to rise 1.3 percent from the 2017 level to set a new record of 511.3 million tonnes, with the increase primarily reflecting improved prospects for India. The new FAO report offers the latest forecasts regarding cereal utilization and also trade – which is expected to reach a record high in the coming year.

The forecast for global cereal stocks at the close of seasons ending in 2019 was raised by 5 percent since the last report in May to 772 million tonnes, with most of the revision reflecting an upward adjustment to the historical estimates of China’s maize stockpiles.

However, despite the month-on-month increase, world cereal stocks would still be down 5.4 percent from their opening level. The new estimates point to a relatively high global cereal stock-to-use ratio of 28.5 percent, though down slightly from the 2017/18 season.



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Jordan’s acting PM vows to withdraw unpopular tax bill

Monitoring Desk

AMMAN: Jordan’s acting Prime Minister Omar al-Razzaz said Thursday that his incoming government would withdraw an unpopular income tax bill once it is officially sworn-in next week.

He made the assertion after a meeting with Parliament Speaker Atef Tarawneh in which the two men discussed the outlines of the incoming cabinet.

Later Thursday, al-Razzaz is also scheduled to hold consultations with leaders of Jordan’s Professional Associations Council.

Jordan has been rocked by protests since the government last month approved a controversial income tax bill.

Despite Monday’s resignation of Prime Minister Hani al-Mulki — and his subsequent replacement by al-Razzaz (who also serves as education minister) — demonstrations against the unpopular bill have persisted.

Amman recently raised subsidized electricity prices for the fifth time this year, leading to further popular discontent.

It also announced increases in subsidized fuel prices before swiftly reversing the move following a popular backlash.