Business

KARACHI: The rupee plunged by 3.29 percent to a record low against the dollar on Wednesday in what appeared to be currency devaluation by the central bank ahead of the IMF bailout package approval due next month.

Gold price has also soared and business at the stock exchange also witnessed a decline. The government has also decided to increase gas and electricity tariffs substantially. The rupee closed at 162.16 to a dollar, compared with previous close of 156.98 in the interbank market. The rupee weakened Rs5.18 to a dollar during the day. The currency was trading as low as 162.25 to the dollar in an intraday trade. The rupee weakened Rs6.1 to close at Rs163 to a dollar in the open market.

Dealers said the rupee came under renewed pressure and the State Bank of Pakistan (SBP)’s reticence also fueledspeculative onslaught on the battered currency. “It was another volatile trading day despite a lack of payment pressure,” a dealer said. He said, “The market expects rupee will face more pressure in coming days as the government is about to get IMF approval on $6 billion loan package.” The IMF’s board is due to meet on July 3.

The economy is going through a familiar boom-and-bust cycle; debt is soaring, inflation is rocketing, and reserves are falling after a deficit blowout. The IMF has long advocated Pakistan to loosen its grip on the rupee, and estimated the real exchange rate was overvalued by as much as 20 percent in 2017. The market participants said there are also reports that government has already signed letter of intent and memorandum of economic and financial policies for securing approval of $6 billion loan from the IMF’s board. “The rupee is likely to weaken further, trading at 180 to a dollar in the next few months,” said another dealer.

Samiullah Tariq, director research at brokerage Arif Habib, said dollar recorded increase on back of importers demand and some of the oil payments. “Moreover, due to year end closing some of the multinational companies might have been purchasing dollars to repatriate their earnings to their principles.” The rupee has lost more than 50 percent of its value since December 2017, stoking inflation and becoming the worst performance Asian currency.

Reuters, quoting SBP, reported that the central bank said it is watching the foreign exchange market closely and would act in the case of “unwarranted” volatility. It said the recent slide “reflects the continuing resolution of accumulated imbalances of the past and some role of supply and demand factors”. The SBP governor, earlier this month, defended the market-based exchange rate system that he said staved off external finance risks in the past couple of months.

Governor Reza Baqir, in his first press briefing, reiterated the central bank’s resolve to intervene in the market to check ‘excessive 

 and ‘disorderly conditions’. He said currently market-based system is implemented in Pakistan, which protects exchange rate from manipulation and simultaneously follows demand and supply mechanism. Neither fixed not free-float regime of exchange rate is good for Pakistan, as the former can lead to external imbalances and the latter can lead to manipulation, governor viewed.

Meanwhile, the Economic Coordination Committee (ECC) of the Cabinet extended conditional approval for hiking the gas tariff up to 191 percent and average power rates by Rs1.49 per unit for consumers using over 300 units. With second increase in the power tariff in the last six months, the government will generate Rs190 billion from the consumers. The government hiked the electricity tariff by Rs1.27 per unit in January 2019.

The ECC granted its approval and now the final approval would be sought from the federal cabinet before implementing this decision. The ECC also decided to withdraw Rs3 per unit for export-oriented sectors with the condition that the subsidy will continue for peak hours. The government has accomplished almost all prior 

Pakistan will have to fulfill all conditions before tabling Pakistan’s request in front of IMF’s Executive Board scheduled to meet at Washington DC on July 3 for approving $6 billion under 39 months Extended Fund Facility (EFF). A new wave of inflation is going to hit the country with start of next fiscal year during which the administrative hike in utility prices such as gas and electricity, devaluation of rupee against dollar that had touched from Rs157 to Rs163 in a single day, increased taxation rates and possibility of surge in POL prices with effect from July 1 will push price hike making lives of common man of the country more miserable.

A top official of Finance Division confirmed that the electricity tariff will be increased by Rs1.49 per unit while the government protected power consumers using 300 units on monthly basis. The government allocated Rs216 billion subsidy for protecting the vulnerable segments from hike in power tariff in fiscal year 2019-20 starting from July 1.The government claims that there would be no increase for 40 percent consumers for initial slabs.

According to official statement issued by Finance Ministry after ECC meeting, Adviser to Prime Minister on Finance, Revenue and Economic Affairs Dr Abdul Hafeez Shaikh chaired the meeting to review the demands of various ministries/divisions. In order to promote Maritime Sector and strengthen the shipping industry in the country, the Committee approved the proposal of Ministry of Maritime Affairs to extend the existing tax incentives to the shipping sector from 2020-2030, subject to vetting by Law Division.

The Power Division briefed the Committee about the cash and non-cash settlement for power sector. The ECC decided that Industrial Support Package (ISP) and AJK power sector subsidy would be adjusted against the outstanding loan of government of Pakistan from power sector entity.

It also approved the proposal of Power Division to provide additional power supply for three hours to the tube-wells, domestic and commercial consumers of Balochistan province for initial period of three months. In this regard, an amount of Rs9 billion was approved for three months which is to be provided in three tranches. The Committee would review the performance of the Qesco on monthly basis to find whether the recovery drive against the power sector defaulters is producing the desired results.

The ECC decided to give a deadline of three months to Power Division to resolve the issue of recovery from around thirty thousand and eight tube-wells of Balochistan. The Committee directed Power Division to accelerate the recovery campaign against the defaulters and submit a report to ECC on monthly basis. The Committee acceded to the proposal of Petroleum Division to allow import of petroleum products by PSO under Saudi Fund for Development. It also reviewed various slabs of gas tariff. The ECC approved supplementary and technical supplementary grants of various ministries/divisions.

The summary tabled before the ECC on hike in gas tariff stated that in order to meet the projected revenue shortfall of Rs563 billion, Ogra has also recommended category wise prescribed prices to be made effective from July 1, 2019 and recommended 31 percent and 20 percent across the board increase in gas sale prices. Up to 0.5 cubic hecto meters there will be no increase in prices for consumers. Up to 1 hm3, the monthly bill will go up from Rs572 to Rs933, up to 2 hm3 consumers the monthly bill be increased from Rs2305 to Rs3872, for users up to 3 hm3 the monthly bill will go up from Rs3589 to Rs7995, up to 4 hm3, the bill will be increased from Rs13508 to Rs14373, above 4 hm3, the bill will be decreased from Rs31573 to Rs25534.

For fertilizer sector, the price went by 62 percent from Rs185 per MMBTU to Rs300 per MMBTU, fertilizer fuel by 31 percent from Rs780 per MMBTU to Rs1021 per MMBTU, power sector by 31 percent from 629 per MMBTU to Rs824 per MMBTU, cement by 31 percent from Rs975 per MMBTU to Rs1277 per MMBTU, general industry by 31 percent from Rs780 to Rs1021 per MMBTU, zero rated industry by 31 percent up from Rs600 to Rs786 per MMBTU, CNG up by 31 percent from Rs980 to Rs1283 per MMBTU and commercial from Rs980 to Rs1283 per MMBTU.

According to summary Ministry of Energy (Petroleum Division) approved by the Economic Coordination Committee (ECC) of the Cabinet under chairmanship of Adviser to PM on Finance Dr Abdul Hafeez Shaikh here on Wednesday approved gas prices up to 191 percent after protecting lifeline consumers.

The summary states that the natural gas price hike will become effective from July 1, 2019. The two gas utility companies, viz Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) are engaged in gas purchase from Exploration and Production (E&P) Companies and transmission, distribution and sale thereof to various categories of consumers. They are operating on Cost plus Return on Assets formulae under licences from Oil and Gas Regulatory Authority (Ogra).

Under this regime and in accordance with Section (1) of Ogra Ordinance 2002, revenue requirements of the two companies are determined by Ogra which mainly comprise (i) well head gas price (ii) transmission & distribution cost and (iii) profit margin (presently 17.43 percent return on assets before financial charges and taxes).

The per unit Revenue Requirement (Rupees per million BTU) is defined as prescribed price. Based on Revenue Requirements, Ogra pursuant to section 8(1) of the Ogra Ordinance, 2002 advises category wise prescribed prices for various categories of consumers, which forms the basis for the federal government in determining the category wise Gas Sale Price for each category of consumer, pursuant to section 8(3) of the Ogra Ordinance, 2002.

Ogra in its latest decision dated May 17, 2019 has determined the estimated Revenue Requirement of SNGPL Rs 293.305 billion and SSGCL Rs270.776 billion for the FY 2019-20. Accordingly a Net Revenue Requirement after adjusting other income regarding SNGPL is Rs277.913 billion and SSGCL Rs263.247 billion.

Current Gas Sale Prices would result in a Net Revenue Shortfall of Rs87.630 billion and Rs56.803 billion respectively. To meet the projected revenue shortfall, Ogra has also recommended category wise prescribed prices to be made effective from July 1, 2019 and recommended 31 percent and 20 percent across the board increase in gas sale prices for all categories of consumers of SNGPL and SSGC respectively, except domestic sector, where the suggested increase illustrates an approach towards rationalisation of domestic tariff based on indexation of each slab tariff with weighted average Prescribed Price (Cost of Supply).

Business

KARACHI: Local gold prices touched an all-time high of Rs77,300 and Rs66,272 per tola and 10-gram, respectively, after international rates soared to five-year peak on Thursday.

The yellow metal surged to $1,386.42 per ounce before settling at $1,383.04 gaining $28 per ounce in the intraday trade — the highest since March 2014 triggered by a sharp decline in the dollar.

The dealers also justified the increase in local gold prices pointing to the bullish rally in international prices which have risen from $1,283 per ounce on Jan 1 to $1,386.42.

All Sindh Sarafa Jewellers Association (ASSJA) increased prices of per tola and 10-gram by Rs1,800 and Rs1,152 after a massive jump of $28 per ounce on the world markets.

Consumers have also decreased their spending on gold jewellery and moved towards artificial and silver jewellery for marriage and other festivities in the ongoing wedding season as prices continue to rise.

Chairman All Pakistan Jewellers Association Mohammad Arshad said “there is hardly 20 per cent sales of jewellery [compared to the previous season] despite booming marriage season after Eid.”

In addition to the rising international prices, persistent depreciation of the local currency coupled with rising inflation have discouraged gold buying.

ASSJA spokesman said local gold rates are determined keeping in view the demand and supply situation, impact of rupee-dollar parity and prevailing rates in Dubai gold markets.

He also said that normally, during the wedding season, consumers bring their old jewellery ornaments to be replaced with new ones but the situation is not the same this time around.

“In case, jewellery sales remain subdued on rising prices based on climbing world rates and rupee-dollar parity, our jewellery processing factories at the risk of closing down, rendering thousands of workers jobless,” he feared.

Pakistan’s gold imports have surged by 31pc to 300 kilograms in the 10 months of the ongoing fiscal year. On the other hand, jewellery exports plunged by 22pc to $4.25 during the same period.

The government has also been gold assets in its amnesty scheme and urged the traders to declare their gold stocks or risk penalties.

Business

SAN FRANCISCO: Apple on Tuesday introduced its first new iPod model in four years, highlighting music and games as it continued to make a priority of serving up digital content.

The new-generation iPod touch, essentially an iPhone without the phone calls, was available in more than two dozen countries at Apple’s online shop starting at $199.

“We’re making the most affordable iOS device even better with performance that is twice as fast as before, Group FaceTime and augmented reality,” said Apple vice president of product marketing Greg Joswiak.

“The ultra-thin and lightweight design of iPod touch has always made it ideal for enjoying games, music and so much more wherever you go.”

The iPod touch evolved from the original iPod digital music player first launched by Apple in 2001.

The iPod touch became popular with people, particularly parents of internet-coveting children, who wanted mobile devices for getting online without the cost of telecommunications services.

The mobile devices can connect to the internet using Wi-Fi hotspots.

Apple earlier this year unveiled streaming video plans along with news and game subscription offerings as part of an effort to shift its focus to digital content and services to break free of its reliance on iPhone sales.

An Apple TV+ service, an on-demand, ad-free subscription service, will launch this year in 100 countries, the company said.

Apple News+ was launched in the US and Canada in English and French and will be available later this year in Britain and Australia, the company said.

Separately, the company said it was launching a new game subscription service called Apple Arcade later this year with at least 100 titles at launch.

“iOS is the world’s largest gaming platform, and with three times faster graphics, games on the new iPod touch run even smoother and look even more beautiful,” Apple said in a release.

The first new iPod since the year 2015 comes as Apple shifts to emphasize digital content and other services to offset a pullback in the once-sizzling smartphone market, and with many news organizations struggling to monetize their online services.

Business

WASHINGTON: The US auto safety agency is probing reports of potential unintended braking in 675,000 2017-2018 Nissan Motor Co Ltd Rogue vehicles, it said on Friday.

The National Highway Traffic Safety Administration (NHTSA) said it is opening a defect petition review in response to a request by the Center for Auto Safety.

The agency will look at reports of the vehicles’ automatic emergency braking system engaging with no apparent obstruction in the vehicle’s path. There are no reports of injuries or deaths associated with the petition.

Nissan said it had investigated the issue extensively and after talks with NHTSA, as well as its Canadian counterpart, Transport Canada, it had notified all affected Rogue vehicle customers in the United States and Canada of a software update.

“As always, Nissan will continue to work collaboratively with NHTSA and Transport Canada on all matters of product safety,” Nissan said in a statement.

Nissan faces a class-action lawsuit over unintended braking issues in US District Court in California covering Nissan and Infiniti vehicles sold since 2015. The suit says a defect can trigger the brakes and cause vehicles “to abruptly slow down or come to a complete stop in the middle of traffic.”

Business

PARIS: US ride-hailing group Uber said Wednesday that it would start deploying electric bikes and scooters for rent on Paris streets as soon as this week, joining a crowded market which city officials have vowed to rein in.

Initially 500 of its Jump bikes and 500 scooters will be rolled out, before Uber extends the programme to Paris suburbs and other French cities.

They will be so-called “dockless” rentals that can be picked up and left anywhere, a system that has proved a headache for residents who often find them blocking pavements or strewn across the city’s picturesque squares.

An estimated 15,000 scooters operated by several companies have flooded the French capital since their introduction last year, a number projected to surge to 40,000 by the end of this year.

This month Paris said it would start imposing fines of 135 euros ($150) for riding scooters on pavements, and 35 euros for improper parking.

Like the other nine scooter operators in the city, Uber will also have to pay an annual licensing fee of 50 to 65 euros per scooter, depending on the size of its fleet.

And Uber said it had already signed the code of good conduct unveiled by Paris officials last week.

Rental prices for both the bikes and scooters will be the same: a one-euro unlocking fee and then 15 cents per minute.

The bikes will have a top speed of 25 km/h (15 mph), while the scooters can reach 20 km/h.

Uber bought Jump, a fellow San Francisco-based start-up, last year. Its bright-red bikes are already present in several US cities as well as in Lisbon and Berlin.

Uber had already announced Tuesday its plans to develop scooter offerings across Europe, beginning with Madrid.

Business

Business

TOKYO: Sony chairman Kazuo Hirai, who led a major and successful overhaul at the Japanese electronics giant, announced Thursday he would be leaving the firm after 35 years.

The company said that Hirai would retire as chairman but would continue to provide “counsel as requested by Sony’s management team.”

The 58-year-old had already stepped down from the key chief executive role last April after spending the previous six years pulling the firm out of deep financial trouble.

The company veteran was tapped in April 2012 to revive the once-iconic manufacturer of the Walkman, which was then suffering from huge losses largely tied to a hard-hit consumer electronics business.

Hirai led an aggressive restructuring drive at Sony, cutting thousands of jobs while selling business units and assets.

“I have decided to depart from Sony, which has been a part of my life for the past 35 years,” said Hirai.

He had handed over last year as CEO to Kenichiro Yoshida, whom he praised for his “strong leadership” that was to lead to an “even brighter future for Sony”.

Last month, Sony reported that its nine-month net profits had jumped 63 percent year-on-year, led by its games and music divisions.

However, it lowered its annual sales forecast, citing slower-than-expected sales in a range of fields including the key semiconductor unit.

In recent years, smartphone components and the top-selling PlayStation 4 games console have boosted its bottom line.

During his tenure, Hirai repeatedly shrugged off pleas to abandon Sony’s television unit, which he insisted was central to the firm’s core business.

He also tried to capture the youth market, notably with moves such as reviving the firm’s robot dog “Aibo”, to great fanfare

Business

Model Customs Collectorate (MCC) Quetta has foiled a major attempt to smuggle foreign origin items under the garb of Zaireen buses coming from Iran through Taftan. Sources told Business Recorder here on Monday that the MCC Quetta has launched a massive crackdown against Zaireen Buses loaded with smuggling goods.

In pursuance of credible information the anti smuggling squad of collectorate of Customs Quetta foiled a bid of smuggling of foreign origin goods in the grab of Zaireen returning from Iran via Taftan. Accordingly on 19.8.2018 at around 01:00 am, 8 mobile squads of this Collectorate assisted by local police raided buses after disembarkation of Zaireen at Marriabad Quetta and after three hours long operation, seized 10 buses recovering miscellaneous smuggled goods including tyres, carpets crockery cumin (zeera), garments, PP bags, cooking oil and other edible items. The market value of the smuggled goods is more than Rs 20 million and value of seized buses is around Rs 2.35 million. Collector appreciated team for this activity since it is called one of the hardest assignments.

These elements are since long busy to take the shelter of Zaireen buses and continuous their heinous work in the garb of zaireen buses. The team headed by Collector MCC Quetta Ashraf Ali, Additional Collector Zubair Shah, Deputy Collector Maqbool Baloch, Superintendents Aslam Khan, Inspectors, Shahzad Akhtar, Naseer Shaheen, Ghulam Hussain Khoso, Muhammad Shabir Khan, Essa Khan, Ahmed Nawaz Zehri, Jameel Kakar, and Staff hawaldars and sepoyes participated.

Business

Customs Intelligence, Karachi has foiled a major attempt of fraudulent clearance of imported goods including old/used machinery imported from Korea/UAE through mis-declaration and violations of import conditions. Sources in the Customs Intelligence has confirmed that in pursuance of the said received information regarding mis-declaration of description and clearance of undeclared goods from Karachi port, the Customs Intelligence Karachi, blocked four consignments comprising of old/used machinery imported from Korea/UAE by M/s Fatima Traders, M/s M A Impex, M/s Sinco Steel Re-Rolling Mills & M/s Toheed Brothers respectively.

Customs Intelligence officials, on a specific information of its Director General, Shaukat Ali, has foiled a major attempt of fraudulent clearance of imported goods, by way of mis-declaration and breach of the import restrictions in vogue, at Karachi. The consignments were cleared through the red channel (after examination) from MCC, Appraisement (West), Karachi vide GDs filed through clearing agent.

The staff of Customs Intelligence had to face stiff resistance from the terminal operator vis-à-vis grounding / examination of the containers despite the fact that they were blocked at ‘gate out’ stage after completion of all codal formalities by the clearance Collectorate, including even issuance of the gate passes. The terminal operator repeatedly obstructed the re-examination process and also attempted to get the grounded containers re-stuffed and closed on the purported instructions of the clearance Collectorate. Re-examinations were eventually carried out by the Customs Intelligence to ascertain the factual position. As a result, huge differences have been unearthed resulting in evasion/short levy of duty/taxes besides clearance of used items in violation of Appendix-C of the Import Policy Order, 2016. Total assessable value of four consignments comes to Rs 27.01 million as against declared value of Rs 19.345 million, involving evasion of duty / taxes to the tune of Rs 4.492 million, sources said.

The consignments have been accordingly seized under the relevant provisions of the Customs Act, 1969. Criminal proceedings have also been initiated against the importers, clearing agent and the relevant Customs staff and further investigation is in progress, the sources added.

Business

Directorate General Customs Valuation (DGCV) has revised the customs values of AC asynchronous moving motor under section 25(7) of the Customs Act, 1969. According to DGCV, a large number of representations were received that AC asynchronous moving motor (up to 07 watt) were being declared and assessed at lower values. Therefore, an exercise was initiated to determine the customs values of subject goods under section 25A of the Customs Act, 1969.

The meetings with stakeholders were held in March and August in which participants stated that AC/DC motors ranging up to 37 watt had different specifications, weight and values.

Some of the stakeholders argued that value of AC asynchronous moving motor (up to 7 watt) are being assessed at much lower values hence the same may be determined as per international prices. Therefore, all available information and documents were examined for determination of customs values.

The valuation methods given in section 25 of the Customs Act, 1969 were followed sequentially. Transaction value method provided in section 25 (1) was found inapplicable because the requisite information was not available as per law.

However, Identical goods value methods provided in sub-section (5) & (6) of section 25 of the Customs Act, 1969 provided some reference values but due to wide variations in the declarations the same could not be relied upon exclusively.

Thereafter, market enquiry as envisaged under section 25(7) of the Customs Act, 1969, was conducted. Online prices were also obtained. Consequently, reliance was placed upon sub-section (7) of section 25 of the Customs Act, 1969, and customs values of AC asynchronous moving motor (up to 7 watt) are determined under section 25(7) of the Customs Act, 1969.