Saif Power decides to divest 12.5 per cent
LAHORE (Our staff reporter): The sponsors of Saif Power Limited have decided to divest 12.5pc of company’s paid up capital in two stepped transaction. In the first stage, 36.2 million shares (75pc of total offer size) will be offered to Institutions and High Net Worth Individuals through book building mechanism. The remaining 12.1 million shares will be offered to general public at strike price determined by the book building process. Experts said that Saif Power is another efficient and modern plant ready to join the league of listed IPPs from 2002 power policy with a strong dividend yield on the offer.
Global officials to issue communique warning of economic risk
WASHINGTON (Reuters): Finance and development ministers from around the world next week will warn of considerable downside risks to the global economy, and call for an effort to protect the world’s poor, according to the draft of a communique they plan to issue after a meeting on Saturday. With Europe flirting with deflation, Japan not far from recession and a slowing economy in China, there are worries the recovery from the deep 2007-2009 crisis is losing traction. “The global economy remains on a cautious watch and is subject to considerable downside risks that could dent global growth and confidence,” said draft of prepared by IMF-WB Development Committee.
“The path to economic growth, job creation and shared prosperity will require a sustained multilateral effort to protect the poorest and most vulnerable.”
A copy of the draft, which was obtained by Reuters, praised the World Bank for its response to the Ebola outbreak that has killed more than 3,400 people in West Africa and called for quick and coordinated support to mitigate its impact.
The statement said 20 percent of the impoverished countries receiving aid from the World Bank’s fund for the poorest have not shown per capita output growth since 2000 and are particularly in danger of being hit hard if the global recovery founders. It urged the bank and the International Monetary Fund to monitor low-income countries’ vulnerability to shocks, including the dangers their public debts might pose.
It also called for similar short- and medium-term help from the World Bank and IMF for North Africa and the Middle East, especially countries in conflict. The World Bank also was encouraged to increase private investment opportunities in nations falling into conflict.
On other topics, the communique draft called for the two leading multilateral agencies, who are holding their annual meetings in Washington in the coming week, to expand their emphasis on gender equality and climate change, while helping countries with energy supplies and infrastructure investment.
The Development Committee acts as a steering group on development issues for both the IMF and World Bank.
Pro-democracy protests hit Hong Kong’s core retail sector
HONG KONG (AFP): From bargain fakes and cheap technology to high-end designer wear, Hong Kong is a shopper’s paradise — but retailers have taken a huge hit from week-long mass protests that have brought the city to a standstill. Major shopping areas have been barricaded off by protesters who have camped out for the last seven days to pressure Beijing to revoke their decision to limit who can stand in the city’s next leadership election — a move protesters have labelled a “fake democracy”. Billboards advertising famous international brands — Louis Vuitton, Miu Miu, Burberry — now compete with protest banners demanding full democracy for Hong Kong in some of the city’s busiest shopping areas.
Many of the stores overlooking the protest sites have closed, while others have remained open but largely empty.
“The retail sector is one of the four pillars of the Hong Kong economy,” said Francis Lun, a financial analyst — the others being finance, transport and shipping, and real estate.
“The government growth rate (for the year) is already low at 2 percent... so these major disruptions happening in Hong Kong are strongly felt,” Lun added.
Hong Kong’s economy has weakened as China’s economy has slowed and the mainland’s anti-corruption drive has also dampened luxury spending.
GDP slowed to a mere 1.8 percent in the second quarter of this year, down from 2.6 percent growth in the previous three months.
A contraction in the third quarter would push the city’s economy into recession.
For the first eight months of this year, total retail sales decreased by 1.0 percent in value over the same period in 2013, official data shows.
According to figures collected by the Hong Kong Retail Management Association, a trade group, if weak retail sales persist, it could lead to the industry’s first full-year contraction since 2003.
Finance secretary John Tsang warned Friday that the protests threatened to damage Hong Kong’s reputation as one of the world’s premier financial hubs.
“Particularly, our concern is about our reputational risk as well as the confidence in the market system in Hong Kong,” he said.
- Profits plummet -
Shop workers told AFP of a major drop-off in business as both locals and tourists stay away.
“I’ve seen a 70 percent drop in profit every day this week,” said Chicken Chan, 30, manager of a dispensary in the commercial district of Mongkok, one of the major protest sites which saw violent attacks by opposition groups on Friday.
“I feel a little conflicted because I support Occupy Central and the students but I’m losing money,” added Chan, whose shop sells western medicine, dried seafood and milk powder.
“99 percent of our income is from mainland tourists,” he said.
Hong Kong’s retail sector is heavily reliant on mainland Chinese visitors, who contributed about a third of the city’s retail sales in 2013, according to Credit Suisse.
The protests have coincided with the Golden Week national holiday that brings large numbers of mainland shoppers to the city, with October the second-biggest retail period after December.
“It really affected business. There have only been two to three customers today,” said Merry Djong, who works at the Mongkok branch of jewellery and accessories shop Folli Follie that looks over one of the protest sites.
Travel agents on the mainland are reported to have been barred from booking any more group tours to Hong Kong in the wake of the protests, leaving some shop owners angry with the demonstrators.
“It has been an 80 percent decrease (in business). This (the protest) is a 100 percent illegal occupation,” said Jimmy Luk who owns a traditional medicine shop in Causeway Bay, one of the protest sites.
Carrie Chan, who works at Baleno clothing shop, said that they have experienced a 50 percent decline in sales since the start of the protest.
“We never expected Occupy Central to last this long,” she told AFP.
Hong Kong shares have lost around 10 percent since a year high in early September, though ended 0.64 percent higher Friday.
Retails shares in particular have slid since demonstrators took over parts of the city.
But some analysts say that the initial market reaction to the protests may have been overblown.
“It is still a powerful financial centre,” said Michael Kugelman, an Asia expert with the Woodrow Wilson International Center for Scholars.
Some businesses have seen protest-driven rises in sales of particular items.
“I think I’ve sold at least 60 umbrellas in the last few days,” said market stallholder Yip Man-fong, 75, — a small glimmer as his general sales had dropped 40 percent.
Umbrellas have become a symbol of the protest movement after protesters used them to shield themselves from pepper spray fired by police.
Sports shop owner Salina Tsang also reported high sales of swimming goggles — also being used to shield protesters eyes from tear gas — again a drop in the ocean of a general downturn.
“Our customers are mainland tourists. There are barely any here,” she said.
Colombia’s oil sector rejects proposed tax reform
BOGOTA (Reuters): Colombia’s oil sector on Saturday hit out at a proposed tax reform that the government has presented to Congress, arguing that higher duties on corporate earnings would damage the already troubled driver of the economy. A bill was presented to Congress that seeks to raise an additional 53 trillion pesos ($26.2 billion) over the next four years, including a tax on earnings above 1 billion pesos at 12 percent, up from 9 percent currently. The government also extended a bank transaction tax through 2018 and will ask Congress to approve a charge on individual assets above 1 billion pesos.
“Changing the tax structure will affect the push made over the last five years that the sector has made to the economy,” the Colombian Oil Association said in a statement.
Congress is expected to approve the tax reform by year end.
The oil industry, the nation’s biggest exporter, is one of the main drivers of growth in the $370 billion economy, but it has been hit hard in the last year by attacks by Marxist rebels on its pipelines and infrastructure, bringing less revenue for budgeted government investments.
Also, the government has been slow to award environmental licenses for drilling.
Colombia, the fourth biggest producer of crude in Latin America, pumps less than 1 million barrels a day and has reserves of about 2.4 billion barrels, equivalent to 6.6 years consumption.
Serbia gets $300 million from World Bank to aid floods recovery
BELGRADE (Reuters): The World Bank has approved a $300 million 30-year loan to help Serbia recover from floods in May that killed 57 people and devastated its energy sector, the lender said in a statement on Saturday. The heaviest rainfall in living memory caused rivers to burst their banks and sweep away roads, bridges and homes, causing damage estimated at 1.5 billion euros ($1.88 billion). The cost means the Serbian economy is expected to contract in 2014, further complicating government efforts to rein in a budget deficit seen at more than 8 percent of national output.
The loan, which was approved on Friday and has a grace period of 18 years, will help meet domestic energy demand, protect farmers and assets in areas affected by flooding, and improve the Balkan country’s capacity to respond to disasters.
“The project will support imports of electro power worth 120 million euros ($150.18 million) to improve power supplies and avert a ... energy crisis, especially during winter,” the World Bank said it its statement.