Monday, 23 July, 2012

‘Friendlinessis the key totextile revival’ ICCI calls for adopting

investor-friendly policies

to promote textile sector

ISLAMABAD

ONlINE

Textile and garment sector is the back-bone of country’s national economythat needs to be further strengthenedby adopting investor-friendly policiesand ensuring unremitting power supplyto export oriented industries.Textile industry is the only hope for therevival of country’s economy which iscurrently jolted by the high cost of en-ergy and prolonged power outages.It was stated by Islamabad Chamber ofCommerce and Industry President Yas-sar Sakhi Butt, while commenting onthe decline of textile exports by 10.38percent in Fiscal year 2011-12.ICCI President was responding to thereleased figures of the Pakistan Bureauof Statistics which shows that textilesectors cumulative exports have de-clined to $12.35 billion against $13.78billion in the same period last year.he said that energy shortage was theprime cause of decline in exports be-cause 40 percent of production capac-ity of textile industry is dysfunctionaldue to short supply of electricityand gas. he said that Pakistan is one of thelargest cotton-producing countries ofthe world that employs the largestnumber of human resource.Government should immediately re-view the situation and provide uninter-rupted power supply to textile industryas country has already missed the ex-port target of $26 billion and hardlyreached the mark of $23.64 billion atthe end of FY2011-12, he maintained.Yassar Sakhi Butt said that the textileindustry has been facing strong compe-tition at international markets from re-gional competitors where electricitycost is lower and manufacturers arealso enjoying special exemptions. heurged the Government to direct theconcerned authorities to providesmooth electricity and gas supply to thetextile industry in the larger interest ofthe industry and textile exports.he called upon the government to takeserious steps to endure the textile in-dustry and focus should also be on thevalue addition as textile sector need toenhance quality and production capa-bilities.

LAHORE

APP

LAhOrE Chamber of Commerceand Industry here Saturdayurged the government to focuson promotion of regional trade

for being more efficient in terms of cost andlogistics. "The country needs to develop astrategy of engagement with regional coun-tries to maximise mutual economic andcommercial benefits," said LCCI PresidentIrfan Qaiser Sheikh.

Pakistan occupies a strategic locationand can play a major role in transformingthe region into a trade and manufacturinghub, he said, adding, the promotion of re-gional trade also offers very promising ben-efits to the industry as it would enable it touse raw materials from the region that re-duces the cost of production and creates

opportunities to improve economy ofscales by having easy access to neighboringmarkets on the other hand.

The LCCI president said the growth inthe South Asian Association for regionalCooperation (SAArC) region with 22 per-cent of the world population has been pro-jected to surpass 50 percent of the world'sGDP by 2030 and that calls for immediatesteps by the government to boost intra-re-gional trade.

The SAArC is the biggest trading blocin the world with lowest level of trade. Con-tribution of South Asia in the global GDP isless than two percent and its share in ex-ports in only 1.5 per cent, which does notreflect true potential the region owns, headded. Irfan Sheikh said that pace ofgrowth in SAArC region has been slowerat five percent as compared with otherblocs like European Union, ASEAN and

NAFTA where intra regional trade is esti-mated at 62 percent, 58 percent and 28percent respectively. "For greater Asia, weshould enhance cooperation with China,Iran, Afghanistan and Myanmar while afreer movement of businessmen can trans-form this region into a bloc like EuropeanUnion where the people of eight nationswill remain in peace like as a family," hemaintained. Irfan Sheikh said, "Our regionhas lost momentum but it has the ability tobounce back as we have over 50 percent ofyoung population, 12 percent of knownglobal natural resources and all prerequi-sites to become a developed nation."

he said that with markets in the USand Europe expected to experience pro-longed weaknesses, South Asian countrieshave the opportunity to rethink and pursuenew sources of growth in both domesticand external markets.

Govt urged to focus on regional trade promotion

FRANKFURT

AGENCIES

The ECB move, which analysts saidwas aimed at stepping up pressure onAthens to adhere to the commitmentsof its EU/IMF bailout, will forceGreek banks to turn to their nationalcentral bank for Emergency LiquidityAssistance (ELA) funds. Those fundswill be more expensive than fundsavailable in the ECB's regular liquid-ity operations. The ECB said the col-lateral exclusion was due to theexpiration of a temporary 35 billioneuro scheme agreed with Greece andeuro zone leaders whereby the ECBwould continue to accept Greekbonds after they went into defaultthis year. "The ECB will assess theirpotential eligibility following the con-clusion of the currently ongoing re-view, by the European Commission inliaison with the ECB and the IMF, ofthe progress made by Greece underthe second adjustment program," thecentral bank said in a statement. Eu-ropean and IMF officials are due tovisit Athens next week to decidewhether Athens merits anothertranche of aid from its latest bailoutpackage and analysts said the ECBmove was designed to step up pres-sure on Greece ahead of the visit.

Greek leaders this week pushed backtalks to hammer out nearly 12 billioneuros of austerity cuts demanded bytheir lenders until next week after adeal proved elusive. "In this way theECB could be putting pressure (onthe Greek government) to bringabout a positive review by the troika,"Alpha Finance bank analyst NikosLianeris said. "If there is a positivereview by the troika then the Greekbanks will regain direct access to ECBfunding." Greek bankers took the de-cision in their stride. "It's somethingwe were expecting," one bankerspeaking on condition of anonymitysaid. "The only difference is the bor-rowing cost for the banks."NO GUARANTEES

ECB Executive Board memberJoerg Asmussen said late lastmonth that Greece's fraught elec-tions in May and June appeared tohave pushed the country's austerityprogram off track. This is the sec-ond time this year that the ECB hasstopped accepting Greek govern-ment bonds and government-backed assets as collateral, the firstbeing in late February. The ECBsaid that Greek banks would be ableto continue to get funding from theGreek central bank.

"There has been a switch to na-

tional central banks bearing thecredit risk. This move is ... in linewith what we've seen in the past,"ABN Amro economist Nick Kounissaid. "Once there is clarity, therewould be a switch back to ECB fi-nancing." It is likely to leave thegovernment underwriting around135 billion euros of central bankloans that Greek banks have taken.Greek banks had tapped a total of 62billion euros in ELA funds from theGreek central bank by the end ofJune, in addition to 74 billion inregular ECB liquidity operations.They would almost certainly go bustif their central bank funding waswithdrawn, as their foreign peersare unwilling to lend to them asdoubts about Greece's future in theeuro zone persist. Although ELAfunds are released by the nationalcentral bank, they need to be ap-proved by the ECB, which couldlimit this program as well if Greecedoes not make progress on itsbailout program. "The bigger issueis if ELA can run forever, if the pro-gram is not on track," Kounis said.Banks in other euro zone countriesalso own large chunks of Greek debt,though they are more likely to haveother assets to use as collateral andwill thus not be hit as hard hit. TheECB requires guarantees in the formof eligible collateral from all banksthat seek central bank funds in itslending operations. In a separatestatement, the ECB said it wouldstart accepting some Greek creditclaims as collateral, but this movewas unlikely to make up for much ofthe exclusion of the country's sover-eign bonds. The ECB also said it hadagreed to extend the collateral useof credit claims by banks in strug-gling euro zone members Cyprus,Portugal and Italy. The ECB couldnot provide immediate estimates ofhow much extra collateral thechanges would provide for banks.

Spain, whose ailing lenders willreceive a bailout, said it was not onthe list because did not ask the ECBto extend the use of credit claims byits banks as collateral.

ECB adds more sorrowto the Greek tragedyThe European Central Bank turned up the heat on Greece

ahead of a review of its bailout program, saying it would stop

accepting Greek bonds and other collateral used by Greek

banks to tap ECB funding, at least until after the review

The solution lies nearby

June oil demanddrops 3 percentfrom year ago: API

WASHINGTON

AGENCIES

Petroleum consumption in June de-clined 3 percent from a year ago to18.691 million barrels per day. Demandwas down 2.6 percent for the first half ofthe year from the same period in 2011."A weakening economy requires lessfuel, and this by most measures is aweakening economy," said API chiefeconomist John Felmy. "The fall in de-mand in June is particularly notable andconsistent with other disappointingmetrics in the economy, includingfalling retail sales and contraction in themanufacturing sector."Gasoline demand was down 2.5 percentin June at 8.821 million bpd. Consump-tion of the fuel was down 1 percent forthe first six months of the year.API's oil demand figure for June islower than the U.S. Energy InformationAdministration's preliminary estimateof consumption at 19.125 million bpdfor the month. The EIA issues its re-vised June demand number at the endof August.Demand for distillate fuel, which in-cludes diesel and heating oil, fell a slight0.7 percent to 3.876 million bpd inJune. Jet fuel consumption climbed 0.7percent to 1.555 million bpd for themonth. Total imports in June accountedfor 58.5 percent of U.S. oil demand,down from 60.3 percent a year earlier.

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02Monday, 23 July, 2012

Origins and Mausumery

lawn open in Defence

LAHORE: Mausumery lawn and origins ready towear launched its flagship store in Defence. As thestore opened its doors, an influx of vanity con-scious customers dropped in to buy their favoritepret/printed suits.Origins ready to Wear introduced its eagerlyawaited new Eid collection at the launch whileMausumery lawn launched its detailed embroi-dered and print collection Chapter 2.

PSO committed to the uplift

of the people of Pakistan

KARAcHi: Pakistan State Oil (PSO) living up toits national responsibility intensified its CSr driveby pledging support through donations to variousorganizations engaged in Education, healthcare,Community building, Women empowerment, Spe-cial Children Welfare and relief Activities.

NADRA Chairman reinstates

terminated employees

KARAcHi: National Database & registration Author-ity (NADrA) Chairman Tariq Malik has reinstated 61terminated employees of NADrA who were involved instrikes, after personal hearing of each case. NADrAspokesman stated this in a statement issued here today.

Warid brings exciting Eid offer

KARAcHi: This ramadan, Warid Telecom brings anamazing offer for its prepaid subscribers (both existingand new). Upon using balance of rs 15 per day and upto rs 50 during the month, Warid subscribers will au-tomatically enter in a lucky draw to get a chance to win1 bumper prize of rs. 1 Crore, 12 Umrah packages, four1300cc cars and 26 motorcycles!

BusinessAPPLE,FACEBOOKTAKE THESPOTLIGHT

NEW YORK

AGENCIES

Apple accounts for a significantproportion of the overall earningsof Standard & Poor's 500 .SPXcomponents. S&P 500 earningsare expected to show a rise of 5.7percent in the second quarterfrom a year ago. Excluding themaker of the iPad, the rise is 4.8percent, according to Thomsonreuters data. Apple's results, dueTuesday, could help stocks buildon this week's gains and counterinvestor worries over the eurozone crisis. More signs of finan-cial stress in Spain on Fridaycaused stocks to give back someof the week's increase. The S&P500 ended 0.4 percent higher forthe week. "Apple can drive thewhole (tech) group," said DanielMorgan, who helps manage about$3.5 billion at Synovus TrustCompany in Atlanta. "There's ahuge psychological component asit relates directly to Apple. If theyjust blast numbers like they didlast quarter, then obviously theperception will be everybody elsedid pretty good and Apple didfabulous." Apple's expectedstrong performance is mainlywhy technology earnings growthhas held up better than other S&P500 sectors. The expected growthrate for the sector has gone from6.9 percent in April to 8.7 percentas of Friday, the data showed.Apple's earnings for the quarterare seen at $10.38 a share, basedon Thomson reuters I/B/E/S,which includes estimates from 43analysts. That compares with aprofit of $7.79 a share for theyear-ago quarter. Morgan saidApple's growth has largely de-pended on the success of its newproducts. "For the stock, to con-tinue its trajectory at the pace ithas, it's critical that they releasethese new products," he said.Apple's shares are up 49.2 percentfor the year so far. Apple does notgive any clues on its future prod-ucts, but the California companyis widely expected to release itsnext-generation iPhone later thisyear. Wall Street has also set itsheart on Apple launching a new"mini iPad" and the long-awaitedtelevision set in the near future.Investors are likely to be just askeen to hear from Facebook whenit reports on Thursday. Face-book's first results following itsmarket debut could give investorsanother chance to indicate howthey feel about the stock since itsdisappointing initial public offer-ing. Shares of Facebook, one ofthe most closely watched IPOsever, lost ground after technicalproblems with its market debuton Nasdaq and as investors ques-tioned its ability to rapidly in-crease advertising revenue.Analysts said an earnings miss byFacebook could be disastrous forthe stock, which closed Friday at$28.76, below its $38 offeringprice. Investors are looking forexecutives to address a litany ofconcerns about the business,such as the efficacy of its onlineads and the company's nascentefforts in mobile advertising.

CORPORATE CORNER

KARACHI: the United Arab Emirates Consul General Mr.SuhailBin Matar Al - Ketbi, handing over 13 tons of Khalas dates, onbehalf of the UAE Red Crescent to Mrs.Farzana Naik, RedCrescent Sindh Chairperson of at her residence.

KARACHI: Mrs.Fazilat Mehboob, inaugating Giorgenti,Flagship in Clifton.

CLIVE CROOK

BArrACK Obama’s allies arepraising his re-election cam-paign for the ferocity of its at-tacks on Mit rommney and his

business record, and for shaping the con-test around the theme “the rich against therest.” The U.S. president’s enemies deploreit for the same reasons. My feelings aremixed. The strategy isn’t wholly wrong, justwoefully incomplete.

Obama is right to attack his opponent,a weak candidate defending an unintelligi-ble policy platform. he’s also right to ham-mer away at romney’s elaboratetax-avoidance arrangements: That’s a legit-imate target, and romney is a fool for fail-ing to open his records at the outset. Aboveall, Obama is right to make fairness an or-ganizing principle of his campaign -- righton substance and right tactically.

he’s wrong, though, to leave it at that.While attacking romney, he should also bedefending his own record. I find his near si-lence on the Patient Protection and Afford-able Care Act inexplicable. Also, not all ofhis attacks on romney make sense. Thefuss over Bain Capital LLC and outsourcingis unworthy of an intelligent politician. TheObama campaign’s biggest mistake,though, is its fixation on restoring pre-Bushtax rates for the rich. On all these matters,the president is underestimating the coun-try. Start with taxes.TAx POLicy

Voters understand that inequality hassurged in the U.S., and polls show that mostAmericans agree that the rich should paymore tax. Voters also know that reversingthe Bush-era tax cuts for families makingmore than $250,000 -- a goal that Democ-rats have raised to a kind of sacred quest --won’t be close to enough to solve the coun-try’s fiscal problems. Obama should be of-fering a coherent program for long-termdebt reduction, combining phased tax in-creases (for the middle class as well as therich) with moderate cuts in public spending.

Would such honesty be suicidal? Onlyif you think voters are idiots (which, I grantyou, appears to be the operating assump-

tion of both campaigns). Voters might beinitially startled to be addressed as intelli-gent adults, but they would come to appre-ciate the candor, and reward it.

As things stand, Obama’s fiscal inten-tions are no clearer than romney’s. In theresulting fog, the difference between thetwo comes down to this: Obama is avid toraise some people’s taxes, whereas romneyis reluctant to raise anybody’s. I doubt thatgives Obama the edge with uncommittedvoters, receptive though they might be tothe fairness argument with all the fiscal im-plications spelled out.

The obsession with the Bush-era taxrates is mistaken in another way, too. Itopens Democrats to the charge that theirnotion of fairness is about leveling downnot leveling up. That’s still a profoundly un-American idea. You don’t improve theprospects of the unemployed, or of peoplewith limited skills in low-wage jobs, by in-creasing taxes on the rich. Where isObama’s agenda for expanding economicopportunity? Shouldn’t he have one? Andshouldn’t it have at least equal standingwith the quest to hammer the 1 percent?

The U.S. is still a country that reveresrather than resents success. It isn’t a placewhere everybody making more than$250,000 a year (or $500,000, or $1 mil-

lion) is seen as greedy or corrupt and de-serving of punishment. I’m amazed by howoften the Democrats’ rhetoric invites ex-actly that interpretation. raising taxes onthe rich isn’t a regrettable necessity, ac-cording to their worldview, but a basic re-quirement of social justice, regardless ofthe use, if any, to which the money will beput. Even if the government didn’t need therevenue, the rich have it coming. This is apolitical platform with limited appeal inEurope, let alone in the U.S.BOwLES-SimPSON

Why isn’t Obama presenting a morecomprehensive tax-reform proposal, alongthe lines suggested in the Bowles-Simpsonplan, for instance? An overhaul that broad-ened the tax base by limiting deductions,increased the rates applied to investmentincome and taxed inheritance more equi-tably would raise more revenue, and morefairly, than merely reinstating bits of thepre-Bush code.

romney’s tax plan, to be sure, is nobetter. he makes a couple of gestures in theBowles-Simpson direction, yet they’re dis-honest. he proposes to cut marginal ratesacross the board and to make good the rev-enue loss entirely by limiting deductions,without saying which deductions will becurbed or how much. That’s not good

enough. The most expensive deductions --for mortgage interest and for employer-provided health care - - are popular andwill be difficult to cut back. Curbing oreliminating the health-care deduction putshealth-care reform back on the table, an-other question romney prefers to avoid. Byfailing to present a good fiscal plan of hisown, however, Obama is letting his oppo-nent get away with this. The president’s at-tacks on romney’s record at Bain are nomore likely to impress independent voters.True, romney dealt with those attacks soincompetently he almost justified them --defending himself from the charge that heoutsourced jobs by calling Obama the “out-sourcer in chief.” But Obama’s criticismwas ill-conceived in the first place, andmost voters know it.

Outsourcing isn’t new, and it isn’t cap-italism carried to an unacceptable extreme.It’s part and parcel of the market economy.Companies strive to control costs, whichlowers prices and raises real incomes. Buy-ing goods and services from others, athome or abroad, that would cost more toproduce for yourself is a good thing. I out-source all building work and car repairs.I’m glad that Apple Inc. outsources themanufacture of its iPads and MacBooks,because it means I can afford them. Thisisn’t an excess of capitalism. It’s just capi-talism. If Bain made money by findingcompanies where costs could be squeezedand productivity increased, good for Bain.We need more firms like that.

Obama would be right to say that fair-ness matters as well. he would be right tosay that higher productivity is essential,though we also need to take care of the los-ers from market competition, widen op-portunities for the unlucky and guardagainst extremes of wealth and poverty.That isn’t what he says. he attacks out-sourcing in its own right, which is eco-nomic illiteracy of the highest order. Andto fold that attack into a main narrativeabout rich, evil, profiteering businessmenis worse than economically illiterate: In theU.S., at least, it’s a self-defeating strategy.

Courtesy: Bloomberg

Bashing capitalism is nosubstitute for an agenda

NEW YORK

AGENCIES

A slew of analysts reiterated their ratings and pricetargets on Google's stock, saying there were no realsurprises and that the positives had offset the nega-tives in the quarter. "There is still material return oninvestment upside available to advertisers fromsearch advertising, and that such upside will continueto fuel ongoing demand for search ads and revenuegrowth," Sanford C. Bernstein analyst Carlos Kirjner

said in a note. Google's advertising rates have beenpressured as consumers increasingly use smart-phones to access mobile versions of the Web, but theconcern was alleviated as overall clicks on Google'ssearch ads jumped 42 percent in the second quarter.

"While the quarterly results were somewhat unre-markable, we believe shares may form a base at ornear $600, in part because investors will soon shiftattention to back-to-school and holiday shopping sea-sonality," Stifel Nicolaus said. The brokerage has a"hold" rating on Google's stock. The success of

Google's web browser, Chrome, will offset rising traf-fic acquisition costs (TAC), Barclays Capital analystAnthony DiClemente said in a client note. TAC is themoney paid by internet search companies to onlinefirms that direct traffic to their websites.

DiClemente is a five star-rated analyst for the ac-curacy of his earnings estimates on Google, accordingto Thomson reuters StarMine data. Chrome usersnearly doubled by the second quarter to 310 million.Benchmark Co, which has a "hold" rating on Google'sstock, raised its price target by $10 to $625.

Google shares rise as strong ad business eases macro fearsShares of Google Inc rose 3 percent in premarket trade after the company posted a healthy gain at itsonline advertising business, reassuring the Wall Street that it was performing well despite a slow economy

WEEK AHEAD

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