China, Taiwan to sign trade pact

BEIJING: China and Taiwan prepared Tuesday to sign a trade deal that binds their economies closer and that Beijing hopes could lead to political accommodation six decades after the rivals split amid civil war.

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China, Taiwan to sign trade pact

IMF warns Asian economies of overheating risks

SHANGHAI: The International Monetary Fund warned Thursday Asian economies were at risk of overheating as strong capital inflows fan inflationary pressures and raise the risk of damaging bubbles.

The IMF urged regional leaders to return to “more normal” monetary policies after the global financial crisis, and increase the flexibility of their exchange rates to counter speculative funds flowing into their economies.

“Brighter economic growth prospects and widening interest rate differentials with advanced economies are likely to attract more capital to the region,” the IMF said in its latest report on the regional outlook.

“This could lead to overheating in some economies and increase their vulnerability to credit and asset price booms with the risk of subsequent abrupt reversals.”

The IMF raised its growth forecasts for Asia to 7.1 percent for both 2010 and 2011, higher than its prediction last week when it estimated regional economies would expand an average 6.9 percent this year and 7.0 percent next.

But the Fund warned export-driven Asia remained vulnerable to a slower-than-expected recovery in the West, and urged governments to reduce their reliance on overseas shipments and boost domestic consumption.

The IMF said Asian policymakers need to safeguard against the build-up of imbalances in asset and housing markets caused by “excess liquidity”, and one way to do this was to adopt more flexible exchange rates.

“Letting the exchange rate appreciate can forestall short-term inflows,” the Fund said, without specifically referring to China.

“Without more currency appreciation, the pressure to sterilise the impact on money supply will continue.”

The IMF said last week a stronger yuan was “essential” for both the Chinese and world economies, heaping more pressure on Beijing to revalue the currency, which has been effectively pegged at 6.8 to the dollar since mid-2008.

Critics say the policy has given Chinese manufacturers an unfair advantage by making their exports cheaper.

Index falls below 9000 level on selling

KARACHI: Mounting selling pressure trimmed values at Karachi Stock Exchange (KSE) Friday as 100-Index plunged by 175.62 points to close at 8,936, dealers said.

KARACHI: Mounting selling pressure trimmed values at Karachi Stock Exchange (KSE) Friday as 100-Index plunged by 175.62 points to close at 8,936, dealers said.

A dealer said that market was opened on a positive note, but slipped on selling pressure in the first session.

The selling pressure continued in the second session till the close of trading, he added.

The turnover volume was the lowest at 97.120 million in the last one year as 238 scrips sustained loss and 131 advanced while 19 remained unchanged.

The market capitalization was eroded by Rs 51 billion to Rs 2.588 trillion.

Jahangir Siddiqui Co was the volume leader with a turnover of 10.274 million shares followed by Arif Habib Sec 7.297 million shares, Nishat Power 4.874 million shares, Attock Refinery 3.420 million shares and Pak PTA 3.311 million shares.

Nishat Mills closed at 59.09, Jahangir Siddiqui 29.48, Arif Habib Sec 48.43, OGDC 103.37, Attock Refinery 135.15 and Engro Chemical170.19.

Nestle Pak recorded the highest increase of Rs 24.50 to 1224.50followed by Bata Pak which moved up by 22.68 to 907.68 while Treet Corp dipped by 14.74 to 283 and Service Industries went down by Rs14.09 to 267.74.

IMF warns G20 on cutting economic support

WASHINGTON: The global economic recovery is uneven and the timing of any exit strategies should err toward supporting demand, according to an International Monetary Fund paper prepared for the G20. In the document prepared for a meeting of Group of 20 finance ministers and central bankers in Scotland, the IMF stressed the fragility of the global recovery, saying it was largely dependent on special government support. “The pace of recovery is uneven, particularly in advanced economies, with consumer confidence remaining subdued, the waning of temporary fiscal measures such as the cash for clunkers programme in the U.S.

WASHINGTON: The global economic recovery is uneven and the timing of any exit strategies should err toward supporting demand, according to an International Monetary Fund paper prepared for the G20.

In the document prepared for a meeting of Group of 20 finance ministers and central bankers in Scotland, the IMF stressed the fragility of the global recovery, saying it was largely dependent on special government support.

“The pace of recovery is uneven, particularly in advanced economies, with consumer confidence remaining subdued, the waning of temporary fiscal measures such as the cash for clunkers programme in the U.S. and similar programmes elsewhere is slowing production,” the paper said.

“This underscores the extent to which the improvement in demand is largely driven by policy stimulus, with a turn in the inventory cycle also playing a part.”

The IMF is forecasting growth of only 1.3 percent for the world’’s advanced economies in 2010. The euro zone is seen expanding by just 0.3 percent while the economies of emerging and developing nations are expected to grow by 5.1 percent.

This, it said, showed why policy stimulus was still important.

“The timing of the exit from stimulus should depend on the state of the economy and the financial system and should err on the side of further supporting demand and financial repair,” the paper said.

“One of the key lessons from the experience of similar crises (such as the Great Depression and Japan in the 1990s) is that withdrawing policy stimulus too early can be very costly, particularly if the financial system remains vulnerable and prone to adverse shocks.”

Oil Increase In Asia Trade

SINGAPORE: Oil rose in Asian trade Tuesday but gains are being capped by concerns over a glut in global crude supples and weak energy demand, analysts said.

New York’s main contract, light sweet crude for delivery in September, climbed 25 cents to 70.85 dollars a barrel. London’s Brent North Sea crude for delivery in September was up 15 cents to 73.65 dollars.

Oil prices rose to historic highs of more than 147 dollars a barrel in July last year. They plummeted to near 30 dollars in December after a financial and economic crisis in the United States escalated to affect other economies around the world and hit oil demand.

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Oil Increase In Asia Trade