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US stocks bounce back after trade war swoon

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NEW YORK: Wall Street stocks bounced early Thursday, recovering some of the prior session’s declines that were stoked by trade war worries.

About 15 minutes into trading, the Dow Jones Industrial Average stood at 24,840.58, up 0.6 percent. The broad-based S&P 500 gained 0.4 percent to 2,784.05, while the tech-rich Nasdaq Composite Index advanced 0.5 percent to 7,753.76. US stocks snapped a four-day winning streak on Wednesday after President Donald Trump’s administration announced it would push ahead with new tariffs on China, prompting a sharp response from Beijing.  But stocks pushed back higher again on Thursday, with some analysts pointing to a more conciliatory stance by Trump at a NATO summit in Brussels. Trump had on Wednesday lambasted Germany and other allies for not contributing enough funds for defense. But Trump said Thursday he supported NATO and claimed to win concessions for more funds from allies.

Among data releases, the annual measure of US consumer inflation stayed at a six-year high in June, the Labor Department reported. For the last 12 months the consumer price index, which tracks prices for household goods and services, was 2.9 percent higher, the same as in May which was the highest rate since February 2012. Software and services firm CA Technologies surged 17.9 percent after agreeing to be acquired by semiconductor giant Broadcom for $18.9 billion. Broadcom slumped 17.9 percent. Delta Air Lines gained 2.1 percent after reporting better-than-expected second quarter profits. However, the US carrier projected annual earnings between $5.35 to $5.70 per share, below the $5.74 expected by analysts. Delta cited the drag from higher fuel costs as a factor.

A relevant piece published earlier: 

The EU on Thursday slashed its growth forecast for the eurozone in 2018, warning that the rising trade tensions with the United States were hitting the economy.

The European Commission, the EU’s executive arm, said the 19-country single currency bloc would expand by 2.1 percent in 2018, lower than the 2.3 percent forecast just weeks ago in early May. “Our forecast is for a continued expansion in 2018 and 2019, although a further escalation of protectionist measures is a clear downside risk,” said EU Economic Affairs Commissioner Pierre Moscovici in a statement. “Trade wars produce no winners, only casualties,” he added.

The commission added that the economy in the eurozone would expand by 2.0 percent in 2019, the same forecast as in May. The worry about the European economy stems from the ongoing trade dispute with the administration of US President Donald Trump, which has now threatened to impose tariffs on European auto imports, with German auto giants the intended target.

If confirmed, the policy would be one of the most aggressive transatlantic blows since the Great Depression and risks bitterly splitting the allies amid divisions over the Iran nuclear deal and the Paris climate accord. The threat by Trump comes after the mercurial leader already slapped 25 percent tariffs on steel and 10 percent on aluminum on imports from Europe and other key allies.

“First and foremost, if trade tensions with the US were to escalate further, this could dampen confidence more permanently, … likely disrupting the current global (economic recovery),” the commission said in its forecast report. The commission also pointed to “political and policy uncertainty in a number of EU countries” as an important downside risk to the forecast, which included the fallout of stalled Brexit talks.

This also included heavily-indebted Italy, after a far-right/populist coalition formed a government on the promise to break EU budget and spending rules. The commission said higher oil prices, which have spiked partly due to growing tensions over Iran, were also a negative factor. (Published on 12th July 2018) 

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Imran assures KCCI members of making business-friendly policies!

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KARACHI: Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan today assured the business community that he would formulate short and long-term business-friendly policies with institutional reforms, if voted to power on July 25.
He said he was there to convey a message that after the success of PTI in the election, he and his team would make serious efforts to strengthen the economy and extend maximum support to the private sector. Addressing members of Karachi Chamber of Commerce and Industry here, Imran claimed that the PTI government would work on the national agenda of social and economic uplift of the country, not like the other parties, whose leadership pursued their personal agenda and interests.
He referred to the success stories of Dr. Mahatir Muhammad of Malaysia, Erdogan of Turkey and Nelson Mandela of Africa. He alleged that the Pakistan Muslim League-Nawaz and the Pakistan Peoples’ Party leadership used their party governments for promoting their businesses and increasing their wealth. On the other hand, after forming the government he and his cabinet members would not be involved in any business or other activity which was aimed at earning money, he claimed. He said Pakistan was rich in resources and only their exploitation and better management was required. The PTI government would transform the country into a progressive, modern and welfare state, he added.
The PTI chief said unemployment was the number one issue of the country, which could be resolved through better economic planning and policies with a focus on rapid growth of the industry by the private sector. He said it was dire need to bring reforms in national institutions, especially in the Federal Board of Revenue which had failed to deliver. It had generated revenue by squeezing the business community instead of providing incentives to trade and industry for economic prosperity in the country.
Imran said the country would not forward unless there was a good governance and merit prevailed. He said the PTI government would construct five million low-cost houses in the country with the help of private sector. It would also give a boost to 50 other industries. ” We will encourage setting up of small construction companies to accomplish this task,” he said.
He recounted his party’s achievements in Khyber Pakhtunkhwa especially in education, health sectors and reforming the police. Imran Khan said he was aware of Karachi’s social and economic issues. The city lacked ownership from major political parties in Sindh. However, his party would not only provide it ownership but would turn it into the best international city on the pattern of main cities of advanced countries. Like London, Karachi should have a directly elected mayor, he added. Karachi, he said, had big potential and had been contributing a lot towards the country’s prosperity.
The PTI chief urged the business community to be vocal against wrong policies or actions harming the country’s economy and interests. He assured full support to them on their genuine issues. The KCCI leadership apprised the PTI chief of the issues confronting the trade and industry.

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Food exports surge 29.28pc to over $4.797 billion

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ISLAMABAD: The food exports from the country surged by 29.28 percent during the outgoing fiscal year 2017-18 against the exports of the same period of last year.
The food exports from the country were recorded at $4797.936 million during July-June (2017-18) against the exports of $3711.159 million during July-June (2016-17), showing growth of 29.28 percent, according to the latest data of Pakistan Bureau of Statistics(PBS).
Among the food products, the exports of rice increased by 26.78 percent by growing from $1606.834 million last year to $2037.075 million. Among the rice varieties, exports of basmati rice increased by 19.14 percent while the exports of other rice commodities increased by 29.78 percent.
Meanwhile, the exports of fish and fish preparations from the country increased by 14.57 percent by growing from $393.662 million to $451.026 million while the exports of fruits increased by 5.08 percent by going up from $184.016 million to $241.426 million.
Likewise, the exports of vegetables increased by 30.56 percent, from $184.916 million to $241.426 million whereas the exports of tobacco increased by 76.01 percent, from $14.813 million to $26.073 million.
Sugar exports from the country increased by 215 percent, from $161.039 million to $508.333 million while the wheat exports went up from $1.038 million to $236.339 million, showing growth of 22668 percent.
Exports of meat and meat preparation increased by 2.26 percent by growing from $220.662 million last year to $225.646 million during July-June (2017-18), the PBS data revealed.
The food products that witnessed negative growth in exports included leguminous vegetables, exports of which declined by cent percent. The exports of oilseeds, nuts, and kernels also decreased by 21.35 percent.
It is pertinent to mention here that the overall merchandise exports from the country surged by 13.74 percent during the fiscal year 2017-18 as compared to the previous fiscal year (2016-17).
The exports from the country during July-June (2017-18) were recorded at $23.228 billion against the exports of $20.422 billion in July-June (2016-17), showing growth of 13.74 percent, according to the latest data of Pakistan Bureau of Statistics (PBS).
Imports into the country during the period also increased by 15.10 percent by going up from $52.910 billion in FY 2016-17 to $60.898 billion during FY 2017-18.
Based on the figures, the external trade deficit during the outgoing fiscal year 2017-18 increased by 15.95 compared to last year.
The trade deficit during FY 2017-18 was recorded at $ 37.670 billion against the deficit of $32.488 billion in FY 2016-17.

 

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Pakistan Business Council delegation meets Finance Minister

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ISLAMABAD: A delegation of the Pakistan Business Council (PBC) led by Ehsan Malik and Bashir Ali Mohammad met Finance Minister, Dr. Shamshad Akhtar here on Thursday.
The meeting was attended by Secretaries of the Ministry of Finance, Ministry of Planning, Development, and Reform, Ministry of Energy and Chairperson Federal Board of Revenue and additional secretary of the Ministry of Commerce.PBC made a comprehensive presentation of the issues facing the corporate sector and shared proposals for strengthening the overall business environment and steps that could help boost different sectors of the economy.
Concern was expressed regarding the trend towards de-industrialization in the country as Pakistan industry lacked competitiveness given the high cost of power and gas and faces difficult business environment because of distortions in incentive framework and inconsistencies of policy regime.
The PBC delegation advocated for the provision of energy at competitive costs and addressing in a more holistic manner, the inefficiencies of DISCOs including their eventual privatization that has resulted in high cost of power to industry.
At the same time, PBC emphasized broadening of tax base, reduction in indirect taxes and cascading duty structure.
The delegates called for reduction and simplification and reduction in the number of taxes through the unification of multiple taxes and reduction in tax rates to strengthen tax compliance.
The delegation also laid emphasis on the provision of the level playing field with the informal sector, with focus on steps for ease of doing business that would ultimately revitalize growth of industry and thus generate jobs, exports, and revenues for the national exchequer to invest in social development.
The delegation observed that there was a need to effectively tap the potential in the country’s housing sector as it could help generate a large number of job opportunities annually.
PBC called for the establishment of a High-level Council including political leadership as well as independent and corporate experts tasked to develop deeper structural reforms and achieve broader acceptability and consensus from various quarters concerned.
Finance Minister appreciated the proposals put forth by the delegation, saying these would be valuable for the future elected government and PBC should send their detail tax and other proposals to the government so work can be launched by relevant ministries for consideration of the new government.
The Minister also stressed on lifting the quality standards of local products at par with international standards, saying this was necessary to discourage imports.
The minister agreed on the need for a more effective stakeholder consultation mechanism as it is critical that effective proposals offered to get adopted and implemented by the government.
Pakistan industry needs to examine all options of managing their competitiveness and she agreed on the need for dealing with root causes of the energy liabilities such as transmission and distribution losses that have aggravated the circular debt problem.
The Minister underscored private sector explores options for boosting exports and availing of the opportunity offered by the establishment of Special Economic Zones.
There was an agreement that in few areas PBC will send more detailed proposals, meanwhile, the Secretaries will work towards taking up the suggested reforms with new Government.

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