Pakistan can earn handsomely through 3G, 4G auction

ISLAMABAD (APP): Senior journalist Afzal Bajwa has said that policy announcement by Finance Minister about 3G and 4G is an important development. Talking to Radio Pakistan, he said that such policy was being waited for since long. According to him, there is close relationship between technology and economic development.  Pakistan is one of the countries that soon adapt new technologies, analyst added. He said that Pakistan will get good revenue from the auction of this technology. Pakistan also has the choice to skip the middle technologies and opt for 3G,4G, and 5G. If there will be transparency in the auction then the people’s confidence can be restored, he added.

Petroleum policy attracts investment for exploration

ISLAMABAD (APP): The ministry of petroleum and natural resources is pursuing investment-friendly policy, attracting foreign investment to the tune of about $ 2.02 billion for the oil and gas exploration activities in the country during the last three years. As part of such efforts, the ministry has provisionally awarded 50 exploration licenses after extensive consultation with the provinces to effectively explore hydrocarbon resources in the four provinces. “The government has promulgated investor-friendly Petroleum Policy 2012 to attract further foreign investment to cope with the domestic demand of oil and gas,” says an official source.

Incentives offered in this regard includes better gas price, windfall levy reduced from 50% to 40%, base price for crude oil and condensate increased from $30 per barrel to $40 pre barrel, “Ceiling of $100 per barrel is replaced with $110 per barrel, while renewal of lease will also be ensured, after expiry of lease term for another five years subject to payment of amount of 15% of the well head value.” the source added.

Similarly the sale of 90% share of pipeline specification gas to Government of Pakistan and 10% by E&P companies to any buyer with prior consent of the government is another step to encourage foreign investment.

The official said a bonanza of $1 per MMBTU shall be given for first three discoveries in offshore area.

The Policy 2012 gas price will also be extended to the lease for additional 10% production over and above the commitment of development plan approved by the government, the source said.

For the purpose of pricing and delivery obligations for natural gas, the source said, the gas will be delivered at outlet flange (Field Gate/Delivery Point).

While for offshore, the gas will be delivered at the nearest access point to an existing regulated transmission system or at the shore within coastal locations.

In order to exploit shale gas reserves of the country, USAID is providing technical assistance to Ministry of Petroleum and Natural Resources via appointment of experts in the Shale Gas policy formulation and technology support for exploitation of unconventional gas resources.

Approval to commence project has been granted in October 2013 and it will take 9 months to complete.

The government has also introduced Tight Gas Policy 2011 to extract gas from tight gas reservoir by offering additional gas price, the source added.

Harsh weather, tight supply sink US home sales

WASHINGTON (Reuters): Severe cold weather and a shortage of houses on the market pushed US home resales to an 18-month low in January, the latest indication economic activity has hit a soft patch. The National Association of Realtors said on Friday that home sales dropped 5.1 per cent last month to an annual rate of 4.62 million units, the lowest level since July 2012. The Realtors group said unseasonably cold weather was partly to blame, but it also acknowledged some fundamental weakness, with fewer homes on the market to choose from and higher mortgage rates and prices reducing affordability.

“Some housing activity will be delayed until spring,” said Lawrence Yun, NAR chief economist. “At the same time, we cannot ignore the ongoing headwinds of tight credit, limited inventory, higher prices and higher mortgage interest rates.”

The 30-year fixed mortgage rate is about a full per centage point higher than it was a year ago, even though rates have come down a bit since hitting a two-year high in September.

Sales tumbled in the Northeast, South and Midwest, which were hit by snow storms and ice last month. But they were down 7.3 per cent in the West, an indication that other factors apart from the weather also weighed on sales.

Home resales, which peaked in July, have declined in five of the last six months, and in January were down 5.1 per cent from a year-ago.

Economists had expected sales to fall to a 4.68-million pace last month and some were not convinced that the weather had played a major role in the January slump.

“The weakness in existing home sales has been going on for some time now and needs to be acknowledged, particularly by the Federal Reserve,” said Diane Swonk, chief economist at Mesirow Financial in Chicago.

“The few hawks on the Fed could be quickly silenced if housing doesn’t turn around in a more definite and fundamental fashion soon.”

The US central bank has been reducing the amount of money it pumps into the economy through monthly bond purchases, and minutes of the Fed’s last meeting in January showed some officials thought it might be appropriate to raise interest rates “relatively soon.”

ROOM FOR OPTIMISM

Freezing temperatures have hurt home building, manufacturing and hiring in December and January.

While most analysts see the weather-driven slowdown in economic activity as temporary and expect growth to rebound in the second quarter, there are growing concerns that there may be some underlying weakness in the economy, particularly given that growth was already slowing towards the end of 2013.

Some economists are optimistic home resales will pick-up once the weather starts warming up.

“Although higher mortgage rates and prices have reduced affordability somewhat, it is still much better than it was at the height of the housing boom,” said Gus Faucher, a senior economist at PNC Financial in Pittsburgh.

“Many potential buyers, concerned about their financial situation, have put off purchases, but are now looking to buy a home as the recovery has proceeded.”

In January, the inventory of unsold homes on the market rose 2.2 per cent from December, pushing the months’ supply to 4.9.

While that was up from December’s 4.6 months, it remained below the 6.0 months that is normally considered as a healthy balance between supply and demand.

With inventory still tight, the median price for a previously owned home rose 10.7 per cent from a year ago.

Higher house prices and lack of stock were slowing sales in the lower end of the market. First-time buyers accounted for 26 per cent of the transactions, the smallest share since the Realtors group started tracking the series in October 2008.

A market share of 40 per cent to 45 per cent is considered by economists and real estate professionals as ideal.

The NAR, however, believes the worst of the supply squeeze is over, noting that the stock of unsold homes increased 7.3 per cent from a year ago.

Bundesbank chief sceptical on cbank coordination, G20 growth targets

SYDNEY (Reuters): Germany’s central bank chief said he sees limits on the degree of coordination possible among the world’s major central banks and expressed scepticism about the Group of 20 economies setting specific growth targets. The world’s top 20 economies may agree to set an ambitious target for faster global growth at a weekend meeting in Sydney, where major central banks are also being urged to coordinate policies to avoid “surprises” that could roil emerging markets. “I am sceptical about coordination in monetary policy within the G20,” Jens Weidman, President of the Deutsche Bundesbank, told Reuters on Saturday.

Such coordination was difficult because every central bank has to act according to their own mandate, though that did not mean that central banks were not watching the consequences of their actions on other countries.

The Bundesbank President welcomed initiatives by the G20 to improve global growth and employment prospects but said setting quantitative growth targets at the G20 level was “problematic in my view”. Such targets are often very ambitious, but for the countries not binding or workable, he said.

He also urged emerging nations to undertake structural reforms to counter recent market volatility.

PAJCCI team to attend joint economic commission meeting

Lahore (Staff Reporter):  Zubair Motiwala, Co-President PAJCCI along with Engr. Daroo Khan Achakzai, VP and Faiza Nasir, Secretary General has departed for Kabul today to attend 9th Joint Economic Commission Meeting as a part of delegation. The delegation is led by Finance Minister Ishaq Dar. The meeting will be held on Sunday (today).  PAJCCI has also submitted stakeholders’ feedback and reservation draft to ministry for discussion and necessary resolution in the meeting. Mr. Motiwala would be representing the voice of traders and business community across the border with the motive to strengthen both transit and bilateral relations further.