Stocks rise as U.S. jobs gain outweighs fears over Greece

Asian shares rose on Monday as surprisingly robust U.S. jobs data bolstered investor risk appetite, overshadowing worries about a lack of progress in Greek debt restructuring talks that are vital to containing the euro zone debt crisis.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent to its highest in more than five months, after the index recorded a fifth successive weekly gain last week.

Japan’s Nikkei average opened up 1.2 percent.

Major stock indexes closed on Friday at multi-month highs, as sentiment was bolstered by U.S. job creation which far exceeded expectations last month and a surprise acceleration in the U.S. services sector to its highest in nearly a year.

In the euro zone, the private sector economy expanded in January for the first time since August, raising hopes the region could avoid a recession.

But Greece remained a drag as a number of major conditions demanded by the “Troika”, representing Greece’s European Union, European Central Bank and IMF lenders, were still outstanding.

Athens must tell the EU by Monday whether they accept the stern terms of a new bailout deal. Without the deal, Athens would head for a disorderly default.

“It’s a mixed bag really. Until Greece is resolved, it’s hard to get too unambiguously bullish on the back of better U.S. news and liquidity from Europe,” said Andrew Pease, Sydney-based chief investment strategist at Russell Investments Asia Pacific.

“It’s hard to see any solution to Greece that doesn’t involve some form of default,” he said, adding that while the uncertainty over the Greek issue remains a source of volatility, an event risk would be “a known unknown” and not a surprise.

The euro was down 0.2 percent at $1.3127.

Latest figures dated Jan. 31 showed investors reduced their short positions in the euro last week, after five weeks of selling, but the market is still significantly short of the single currency.

TECHNICALS EYED

EPFR Global data underscored investor appetite for higher returns, with flows into Emerging Market Equity Funds hitting a 43-week high in the week ended Feb. 1. EPFR Global-tracked Bond Funds saw inflows of a net $7.47 billion during the same period for the biggest weekly total since it started tracking them about 10 years ago.

“A strong U.S. employment report fueled the risk rally further, and some investors now wonder whether it is overextended. We think it is advanced, which means selectivity is warranted, but not over,” Barclays Capital said in a note.

“We see value in EM assets, including currencies. EM carry trades are supported by global central banks, growth differentials, the fading risk of a hard landing in China, clean balance sheets and positioning,” it said.

After the rally late last week, many markets were nearing key resistance, which could signal a pullback.

The CBOE Volatility index VIX, which measures expected volatility in the S&P 500 over the next 30 days, closed at a seven-month low of 17.10 on Friday, reflecting improved market sentiment and receding fears of sharp market falls.

A move to the support zone around 14-15 suggested increased volatility in coming sessions.

Spot gold inched up 0.3 percent to $1,730 an ounce after falling 1 percent on Friday when the jobs data dashed hopes for more stimulus from the Federal Reserve, which had been priced into bullion’s recent rally.

Asian credit markets firmed, with spreads on the iTraxx Asia ex-Japan investment grade index tightening sharply by about 10 basis points early on Monday.

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LPG becomes most expensive fuel in country

ISLAMABAD: As the price of Liquefied Petroleum Gas (LPG) is increased by Rs15 per kilogram to reach a new high ever, the industry players have blamed the government for imposing more than Rs11 per kg as petroleum levy on LPG.

The new highest-ever price of Rs109,702 per ton for the locally produced LPG has been notified by the producers including the oil refineries, whereas the LPG distributors have announced to observe strike on February 15 against the increase.

The notification issued by the state-owned LPG producers said the new LPG rates for February will be Rs83,000 per ton and the petroleum levy of Rs11,486 per ton will be added to this amount, whereas the other additions are excise duty of Rs85 per ton and 16 per cent GST.

“The price increase is from Rs93,856 in January to Rs109, 702 per ton for February”, said Bilal Jabbar, spokesman for the LPG Association of Pakistan. “Government is the single largest producer of the LPG in the country and is therefore the direct beneficiary of the increase in prices”, he said.

The LPG prices have also been impacted due to the imposition of petroleum levy as a result of which local prices have far exceeded its international price.

“Pakistan is the only country in the world where a tax has been imposed on local production to facilitate imports”, Jabbar said, adding “The whole exercise has been done to encourage favorites to manipulate imports”.

He said the government policies were causing serious financial loss to the consumers and the LPG industry will also bear serious implications.

On the other hand, the main body of LPG distributors have criticised the government policies which have resulted in LPG prices reaching a new high.

“The local LPG producers have shifted the burden of petroleum levy to 60 million consumers, giving an increase of Rs15,850 per ton to reach a record level of Rs109,700 per ton”, Chairman of FPCCI Standing Committee on LPG Abdul Hadi Khan said. “It was announced by the government that petroleum levy of Rs11,400 per ton was meant for producers and not consumers but now they have transferred it to the consumers”.

He said this has enhanced the price of the 11.8 kg domestic cylinder by Rs188 and the price of the 45.4 kg commercial cylinder has been jacked up by Rs726.

Whereas, chairman of his own faction of the LPG association, Irfan Khokhar has announced a strike on February 15 against passing of the petroleum levy to the consumers which has resulted record high of LPG in country.

“The cost of local LPG is between Rs13,000 and Rs14,000 per ton while it is being sold at Rs109,700 per ton”, Khokhar said adding that there has been a Rs350 billion scam in the LPG affairs during past five years. He urged the government to devise a price control mechanism to bring down the LPG price in the country.

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Indian consortium may bid for Afghan mining blocks: report

MUMBAI: State-run Steel Authority of India Ltd and government-controlled Hindustan Copper Ltd are in talks with India’s Aditya Birla Group and Jindal Steel and Power Ltd to form a consortium to bid for gold and copper deposits in Afghanistan, the Mint newspaper reported.

Afghanistan has invited expressions of interest by March 9 for gold and copper deposits in four provinces.

The consortium partners will be finalised soon, the paper quoted Hindustan Copper Chairman Shakeel Ahmed as saying.

Jindal Steel and Power is also interested in investing in other projects in Afghanistan, Chief Executive V. R. Sharma told the newspaper.

SAIL and Jindal Steel and Power were part of a consortium that won three iron ore blocks in Afghanistan’s Hajigak province in November.

India and China, two of the world’s fastest growing major economies, are vying with each other for access to Afghanistan’s oil and mineral reserves.

The companies could not be reached immediately for comment.

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Iran pipeline to supply gas by end of 2014

ISLAMABAD: The National Assembly’s Standing Committee on Petroleum and Natural Resources was informed on Tuesday that the supply of natural gas through the Iran-Pakistan (IP) pipeline would start by December 2014.

Petroleum and Natural Resources Secretary Ejaz Chaudhry said the route survey of the IP pipeline project had been completed and the process of land acquisition was under way.

The NA panel’s meeting, chaired by Sardar Talib Hassain Nakai, expressed dismay over the delay in the international pipeline projects.

The committee was informed that the tender of the project would be issued soon after completing legal formalities.

The secretary said as a long-term step to overcome the gas shortage, talks were underway to conclude an agreement for getting gas from Turkmenistan under the Turkmenistan–Afghanistan–Pakistan–India pipeline (TAPI) and supply of gas would start by 2016.

The committee was informed about the gas loadshedding, particularly in Punjab and Islamabad, and current gas production in the country that is over four billion cubic feet per day (BCFD) whereas the demand is over six BCFD.

“Gas demand during winters multiplies because of increase in consumption in the domestic sector,” the secretary said.

The contributory factors for widening gap between resources and insufficient addition of gas from existing and new sources and the shortfall for the current year is ranging from 668 to 1,061 MMCFD.

“The present gap is going to increase to around 303 BCFD by 2015, and the situation remains the same the gap will increase to 5.24 BCFD by 2020,” the committee was told.

The committee expressed concern over the energy crisis and directed the ministry to come with solid proposals in the next meeting so that it could contribute to save the country from the situation not only for the short-term basis but also long-term.

The committee directed the SNGPL and SSGCL to complete the gas developmental projects of parliamentarians on time.

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Gvot decides 10 pc surcharge on CNG

ISLAMABAD: The government has decided to impose 10 percent surcharge on CNG from February, Secretary Petroleum Aijaz Chaudhary revealed during a briefing to National Assembly’s Standing Committee on Petroleum and Natural Resources.

The Secretary Petroleum said that the decision would help to balance prices of CNG and petrol, added that, summary in regard with the issues has also been finalized.

He held OGRA responsible of distributing gas connections at the time of gas shortage despite the ministry expressed concerns over the distribution.

The committee, which met under the chair of MNA Talib Nakai, asked why were gas connections distributed during gas shortage?

The secretary defended Petroleum Minister Dr Asim for revealing price hike, saying the price formula was already on OGRA’s website.

He warned that if the situation remained unchanged, the gas crisis would also hit the country next year.

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WeBOC to help improve Sindh`s tax collection

KARACHI: The Sindh government expects to generate higher revenue during the current fiscal year upon linking collection of infrastructure cess at customs stage with newly rolled out auto-clearance system, Web-Based One Customs (WeBOC), at all the container terminals of the ports.

The infrastructure cess constitutes up to 60 per cent of total revenue collected by the province, therefore, auto system is going to bring an improvement by 10 to 15 per cent in collection, stated director-general Excise & Taxation, Sindh Mohammad Shoaib Ahmad Siddiqui here on Monday.

Talking to FTNews in his office, he said the auto collection of the cess would check defaults and other malpractices. Therefore, the department expects improvement in its collection.

He said infrastructure cess is being collected at 0.8 to 0.85 per cent of the value of import consignments and its chargeability depends upon weigh and distance the goods will move through the province.

He disclosed that the system was first rolled out in the middle of last year at Port Qasim for auto-clearance of import/export consignments and subsequently it was launched at all the three container terminals Qasim International Container Terminal (QICT), Pakistan International Container Terminal (PICT) and Karachi International Container Terminal (KICT).

As a result of this, DG Excise and Taxation Sindh said that for the last one month the entire collection of infrastructure cess at customs stage had been computerised.

This would mean that without payment of infrastructure cess at the customs stage, the Goods Declaration (DG) document will not allow clearance of consignments from port area and this would ensure full collection of the cess.

Responding to a question, he said six taxes are collected by his department, including motor vehicle tax, excise duty, professional tax, cotton fee and hotel tax and the provincial budget 2011-12 had set revenue collection target at Rs22.49 billion compared to Rs21 billion recovered last fiscal year.

However, under the 18th amendment, he said collection of property tax and entertainment duty had been devolved to provincial governments which were being collected by local governments.

Mohammad Shoaib Ahmad Siddiqui further said that on average annual revenue collection of property tax and entertainment duty comes to Rs2.5 billion.

He said that during the current fiscal year, there would be a big shortfall in collection of cotton fee because of extensive damage caused by heavy rains and floods to standing cotton crop in the province last year.

But he was still hopeful that revenue collection target of Rs22.49 billion set for current fiscal would be surpassed.

Similarly, he said that excise duty collection during first six months (July-Dec) of current fiscal was short at Rs1.035 billion over the corresponding period of last fiscal when collection stood at Rs1.278 billion.

However, Mr Siddiqui said that during next six months of current fiscal year, efforts would be made to recover the shortfall in excise duty collection. He explained that closure of Murree Brewery for last five months caused the shortfall because the department was unable to collect excise duty on sale of its products in the province.

Nevertheless, he said revenue collection on account of all other taxes and levies during first six months of current fiscal has improved.

Giving details, the director-general Excise and Taxation said that collection of motor vehicle tax increased to Rs1.379 billion from Rs1.197 billion recorded in the corresponding period last year.

He further said that collection of professional tax increased to Rs148 million from Rs141 million collected in the same period last year, hotel tax stood at Rs71 million as against Rs62 million last fiscal, property tax collected Rs929 million from Rs897 million and entertainment duty rose to Rs13 million from Rs11 million last year.

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Fertiliser, seed of poor quality being sold openly

HYDERABAD: Growers of Matiari have expressed the fear that production of oilseed, gram, cotton and other crops will drop by 50 per cent because of sale of substandard seed and fertiliser and spurious pesticides in the town.

During meetings with officials of the Research and Development for Human Resources which has launched “Grow more crops” campaign in Matiari in collaboration with Oxfam, they said that small growers would suffer losses of tens of millions of rupees this year.

They said dealers of fake fertilisers, seeds and pesticides were minting money in the district. They spend thousands of rupees on each acre on farm inputs but they do not get back even the cost of production.

They said their crops and houses were destroyed by rains but the government did not provide them any relief.

Rafique Khoso, Khan Khaskheli, Khair Mohammad Khaskheli and Faqiro Khaskheli said that labels on fertiliser bags were genuine but the contents were spurious, which had affected fertility of land.

Mohammad Khan Khoso and Mohammad Qasim Memon said a mix of genuine and fake fertilisers and substandard seed were being sold to growers. They had complained to dealers as well as officials but received no response.

They demanded that godowns of such dealers be sealed and agriculture experts be sent to Matiari to investigate the matter.

Representatives of NGOs met a large number of growers and women farm workers in 20 villages of the union councils of Matiari, Shah Alam Shah and Sekhat.

EDUCATION: The Sindh Technical Education and Vocational Training Authority and City Guild International have singed an agreement.

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