Govt urged to rid lavish expenditures
NEW YORK: Merrill Lynch, the New York-based global investment bank said the government of Pakistan would have to take stock of its method relating payments of local and foreign loans to strike balance in its economy.
Also, the extravagant government expenses should be done away with to get rid of new borrowings, it was urged.
According to Merrill Lynch, of the Rs703 billion fiscal deficit, approximately Rs521 billion (74% of the total) is to be financed through domestic sources. This includes Rs155 billion through domestic banks. The remaining Rs366 billion is through non-banking sources, which Merrill Lynch sees as the problem.
Merrill Lynch expects the government to remove its exemptions from sales tax and the federal excise duty (FED) once it implements the Value Added Tax Ordinance, 2010. Analysts at JS Global Capital concur with that view.
Analysts at Merrill Lynch’s Pakistani affiliate, KASB Securities, say they also see the imposition of regular corporate income taxes on the export sector as a distinct possibility.
“[It is] a structural benchmark required by the IMF,” said Farah Marwat, analyst at KASB Securities. Ms Marwat, however, did note that a similar measure was withdrawn within one day of being proposed last year owing to stiff opposition from the exporters’ lobby.
The government has been pinning much of its hopes for increasing revenues on levying the value added tax (VAT). Government analysts expect the levy to raise as much as Rs70 billion in additional revenue. But most analysts seem to be skeptical of the achievability of that target.
Merrill Lynch identifies the sourcing of the government’s deficit financing, whether domestic or foreign, as a critical factor in determining the strength of the economic recovery.
“Government borrowing would contribute a major portion of potential monetary expansion of M3,” says Hamza Marath, analyst at KASB Securities, Merrill’s Pakistan affiliate.
M3, which is one of the broadest measures of money supply and is commonly used in Europe, is seen as a leading indicator of inflation. If the government borrows money from the State Bank – a euphemism for printing money – it will artificially increase the supply of money in the economy and increase inflation. Harmful even in the best of times, this would have a crippling effect on the nascent economic recovery.
It would also run counter to the central bank’s stated goal of seeking to reduce inflation.
Higher inflation leads to higher interest rates, which makes the cost of capital too high for many businesses to invest in growth. The central bank has acknowledged this as a problem but seems to lack the courage of its convictions to tell the government to stop monetizing the fiscal deficit.
soul cycle
May 28, 2010 by Trend PK
Filed under World News
soul Cycle is America’s biggest name when it comes to anything related to bicycles. The brand name is associated with manufacturing all kinds of bicycles and partnering in cycle manufacturing as well. Under the Soul Cycle’s shadow there are numerous models and types of bicycles that would make any cycler highly tempted.
The kinds of bicycles that Soul Cycle manufactures and helps other subsidiaries produce range from typical road bikes to mountain bikes, BMXs and stunt bikes. The most impressive range of cycles in Soul Cycle is their road bike series. If the customer is considering economy then a typical road bike could be the choice, but if one wants sheer quality, then Soul Cycle won’t disappoint you. The road bike manufactures by Soul Cycle is not just a road bike with thin tires and a good gear changing assembly, it’s a lot more than that. It gives you unparalleled material strength and a beautiful design, along with sooth and quality moving parts like chain and axles. The wheel wires of the road bikes by Soul Cycle are made of the toughest material, in fact so tough that it may keep the wheel from bending even after an accident.
fitch
May 28, 2010 by Trend PK
Filed under World News
Fitch downgrades Spain Wall Street falls
Stocks closed out their worst month in more than a year by sliding again on more unsettling news about Europe.
The Dow Jones industrials dropped 122 points Friday after Fitch Ratings gave Spain the second downgrade of its credit rating in a month. The rating agency’s action was another reminder to traders of the long-term economic problems still facing several European countries, and pehaps the rest of the continent and the global economy as well.
May was difficult as persistent and intensifying worries about Europe’s debt problems sent the Dow down 7.9 percent and the broader Standard & Poor’s 500 index down 8.2 percent. Both indexes had their worst monthly performance since February 2009, the month before stocks began their recovery from 12-year lows. The Dow had its biggest May drop since 1962.
The Dow Jones industrial average dropped 141.25 points, or 1.38 percent, to 10,117.74. The S& P 500 Index fell 16.17 points, or 1.47 percent, to 1,086.89. The Nasdaq Composite Index lost 30.63 points, or 1.34 percent, to 2,247.05.
Fitch Ratings linked the downgrade to AA+ from AAA to the record levels of household and corporate debt in Spain, as well as mounting public debt, which it said would act as a drag on economic growth. Fitch report says the country’s economic recovery will be more muted than the government forecast due to its austerity measures.
Energy shares ranked among the biggest losers on Friday, a day after the S&P energy index racked up its largest gain in 14 months. The S&P energy index was down 2.4 percent. Halliburton tumbled 8.1 percent to $24.80 and Schlumberger fell 6.5 percent to $55.93.
Apple Inc was among the few bright spots, rising 0.5 percent at $254.75 after the iPad tablet computer debuted outside the United States and Bank of America-Merrill Lynch raised its price target on the stock by $25 to $325.
Because the Spanish economy is far bigger than Greece’s, a crisis there would have far more serious implications for the 16-nation euro zone and global growth.
The Spanish government said on Friday that talks with unions to agree an overhaul of labour market rules were not going well and that if necessary it would push a reform of workplace laws through parliament.
Unions have threatened a general strike if Socialist Prime Minister Jose Luis Rodriguez Zapatero’s government pushes ahead with a reform to cut the cost of hiring and firing without their consent.
In order to reassure markets about the country’s long-term solvency, the government was set to make a last-ditch attempt to clinch a deal in three-way talks at the weekend that will also include employers.
The prospect of industrial strife piles further pressure on Zapatero, whose government averted a bullet on Thursday by winning passage of a 15 billion euro ($18.4 billion) austerity package by a single vote in parliament.
A week after cutting its 2011 growth forecast to 1.3 percent from 1.8 percent, the government on Friday revised down its growth estimates for 2012 and 2013 to 2.5 percent and 2.7 percent, respectively.
Nancy Kissel
February 11, 2010 by Trend PK
Filed under World News
HONG KONG : Nancy Kissel, Hong Kong’s highest court on Thursday quashed the conviction of housewife Nancy Kissel, jailed for life for murdering her banker husband by feeding him a spiked milkshake and clubbing him to death, and ordered a retrial.
The appeal court verdict marks a dramatic reprieve for the American, whose 2005 trial riveted the territory with tales of rough sex, marital violence and adultery.
“The court unanimously allows the appeal, quashes the conviction and orders a retrial,” said Chief Justice Andrew Li at the Court of Final Appeal.
Kissel, dressed in black, broke down in tears after the judgment was read out in the wood-panelled courtroom, while her lawyers pumped their fists in celebration.
Kissel had admitted killing her husband Robert, a high-flying banker at Merrill Lynch, on Nov. 2, 2003, but pleaded not guilty to murder, a charge that requires premeditation.
After several years in prison and a failed appeal in a lower court, Kissel arrived in a wheelchair and appeared downcast as a large press contingent scrimmaged around her.
“Nancy is very frail, emotionally and physically,” said her defence lawyer Simon Clarke after the judgment was given by the five-member panel of judges. “She is obviously very delighted.”
REMANDED IN CUSTODY
The court remanded Kissel in custody pending the retrial, though several of her supporters said they would help her post bail if an application was granted by the retrial judge.
“We hope to see her tomorrow,” said Nancy Nassberg, a long-time friend. “Her body is weak, but she continues to fight and support victims of abuse.”
The so-called “milkshake murder” case engrossed Hong Kong, offering a rare glimpse into the high-living lifestyle that some foreign professionals enjoy in the former British colony.
Prosecutors said Kissel gave Robert, 40, a milkshake spiked with a “cocktail of drugs” before cracking his skull several times with a heavy statuette. Kissel tried to dispose of his body by rolling it up in a carpet and putting it into a storage room.
They said Robert had been planning to divorce Nancy and wanted custody of their children after discovering she had an affair with a TV repairman in the United States.
In quashing Kissel’s conviction, the judges described the lengthy trial as complex and riven with conflicting evidence. Kissel had argued that she was protecting herself after her husband tried to attack her with a baseball bat.
“Mrs. Kissel killed Mr. Kissel. That much is not in dispute,” the judgment said. “But was the killing certainly murder or might it have been in self-defence?”
The judges also questioned whether the seven-person jury that convicted Kissel in the original trial may have been misdirected, given Kissel’s argument that she had laced a drink to simply try to calm her husband, rather than as part of a plan to kill him.
“The miasma of those impermissible points was left to hang over the jury’s deliberations,” the judgment added.
Kissel’s lawyers maintain she was provoked into the killing and acted in self-defence after suffering years of domestic abuse.
Nancy Kissel was first posted on February 11, 2010 at 12:19 pm.
British Airways Strike
December 15, 2009 by Trend PK
Filed under World News
British Airways Strike updates :- QANTAS will take advantage of its alliance partner’s woes by filling seats during the peak Christmas period with passengers left stranded by a 12-day British Airways strike.
Although the strike throws into chaos the holiday plans of BA passengers during the busiest time of the year for travelling, industry insiders say it will be a boost for Qantas because it will enable the Australian airline to fill its aircraft during the highest-yielding period.
The challenge for Qantas, however, will be to find sufficient room on its aircraft.
”I can’t see it being a negative because they are pretty full anyway, so anything made to help BA is going to be icing on the cake,” an insider said.
Qantas dismissed speculation yesterday that it would pull long-haul aircraft off either the Pacific route between Australia and the United States, or from services to South Africa, in response to the greater demand on the kangaroo route to Europe.
Shares in Qantas rose 2c to $2.69 yesterday in its third straight day of gains, spurred on by Merrill Lynch analysts raising their recommendation on the stock from “neutral” to a ”buy” due to improving passenger yields.
”If Qantas has the capacity to carry all of the people on BA who cancel we will be more than happy,” the divisional secretary of the Flight Attendants Association of Australia, Michael Mijatov, said yesterday. ”It provides extra revenue to the company.”
Yesterday Qantas sought to allay fears the strike from December 22 to January 2 will pose problems for Qantas passengers who are due to board BA connecting flights in London bound for other destinations in Europe.
The airline said it would provide ”alternative options, where possible, for other customers, such as those booked on BA services into Europe out of London”.
Source smh.com.au
British Airways Strike was first posted on December 15, 2009 at 8:27 pm.
