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OPEC, allies to seek response to coronavirus pandemic
April 04, 2020: OPEC and its allies are due to discuss oil production cuts next week following US President Donald Trump's claim that leading producers Russia and Saudi Arabia will slash output to boost tumbling prices.
The meeting was originally expected to be held via video conference on Monday, but now looks likely to be pushed back to "take place later in the week," said a source close to OPEC, who asked not to be named.
On Thursday, kingpin exporter Saudi Arabia called for an urgent meeting of OPEC and other countries to "stabilise the oil market" following a phone call between Trump and Saudi Crown Prince and de facto leader Mohammed bin Salman.
Oil prices have tumbled since the beginning of the year due the fallout from the coronavirus pandemic -- which has weighed heavily on economies and demand -- and a price war between OPEC kingpin Saudi Arabia and Russia, the key player in OPEC+.
The two countries failed to agree further output cuts at a meeting at the Vienna-based Organization of the Petroleum Exporting Countries (OPEC) last month, leading Riyadh to open the oil taps to flood the market.
OPEC+ member Azerbaijan's Energy Ministry said in a press release that next week's meeting would aim to discuss the adoption of a "new declaration of cooperation".
Russian President Vladimir Putin said Friday that Moscow was prepared to discuss "a reduction in the volume of about 10 million barrels a day, a little less, maybe a little more."
"I believe that it is necessary to combine efforts in order to balance the market and reduce production," Putin said.
According to a Russian source cited by the TASS news agency Friday, US officials have been invited to take part in the meeting.
- 'Poker game' -
Trump surprised investors on Thursday by tweeting: "I expect & hope" Riyadh and Moscow will be cutting back "approximately 10 Million Barrels, and maybe substantially more".
"Could be as high as 15 Million Barrels," he added in a subsequent post.
Oil prices -- which hit 18-year lows earlier this week -- rallied sharply following Trump's statements, marking a record rise in a day's trading on Thursday.
On Friday, Brent stood at $34.11, up 14 percent, and WTI at $28.34, up 12 percent.
However, a deal "at this stage seems more like speculation than something likely to happen quickly," warned Carlo Alberto De Casa of ActivTrades.
Rystad Energy analyst Per Magnus Nysveen, who described next week's meeting as a "poker game", also warned that "the sticking point is how much each producer is willing to cut".
In February, Russia put out some 10.7 mbd, while Saudi Arabia produced 9.8 mbd, according to the last monthly OPEC report.
The US is the world's biggest producer with 13 mbd but its shale oil has a high production cost and is no longer profitable at current prices.
The figures cited for the possible output reduction would represent "a massive 10 percent cut to global output," calculated LCG analyst Jasper Lawler.
"The question is how much has demand dropped because the coronavirus lockdown?" he said, referring to strict containment measures put in place around the world to stem the coronavirus pandemic.
"Ten million barrels is probably still not enough," he added.
Josh Mahony of IG warned that with the chances for a deal "fairly low", the market was "setting itself up for painful disappointment, which could see the gains of the past 48 hours quickly erased."
AFP/APP
Privatization of two power plants is being carried out on priority basis: PC
April 04, 2020: Despite COVID-19 situation, Privatisation Commission (PC) team, under the leadership of Federal Minister /Chairman Muhammadmian Soomro continue to keep foreign investors engaged in the Privatisation plan of the Government of Pakistan.
Federal Minister Muhammadmian Soomro along with the Advisor to PM on Energy, Mr. Nadeem Baber held a series of video-conferences/meetings during the current week with the pre-qualified investment parties for the privatization of two power plants (Haveli Bahadursha and Balloki) of National Power Plant Management Company Limited (NPPMCL). Mr. Nadeem Baber replied to questions and queries raised by the investors. Chairman NEPRA also joined the discussion.
The privatization of two power plants is being carried out on priority basis. Under the supervision of the Federal Minister, the impending legal and technical issues have been sorted out amicably with the provincial governments and line Ministries.
These include True-up tariff by NEPRA, amendment in land conversion rules and water use agreement for power plants by Government of Punjab and alignment of gas supply and power purchase agreements by Power Division and Petroleum Division in the context of RLNG agreements, prevalent till 2025. The relevant information has been uploaded on Virtual Data Room (VDR) for due diligence by the Pre-qualified bidders. Presently investors’ due diligence is in progress, but physical site visits of the pre-qualified bidders could not be scheduled due to the current national and international lock-down situation and travel restrictions.
In the wake of Corona Pandemic, the pre-qualified bidders have asked for extension in the timelines. Federal Minister has indicated to review/reconsider the timelines based on facts/situational analysis and rapidly changing national and international market scenarios.
Federal Minister also reiterated that the revival of PSMC is one of the most important objectives of the Ministry of Privatization. Financial Advisors’ Services Agreement (FASA) was signed in January this year with Pak-China Investment Company and Bank of China (BoC). The progress towards that end started on steady pace. In spite of travel advisories and other issues, and at the insistence of PC, Sinosteel team from China has recently been on visit to Pakistan. All matters regarding legal, financial and land issues of PSM have been discussed with concerned stakeholders. The first draft of HR, financial and tax due diligence has been shared by the financial advisors on April 1, 2020. The draft DDs on HR Financial and Tax have been shared with Ministry of Industries & Production and Management of Pakistan Steel Mills on 2nd April, 2020 for their review and inputs before placing the DDs and proposed transaction structures for approval of competent forum.
Likewise SME Bank Privatisation is also at conclusion stage. Prequalification of Five investors who have submitted their SOQs is likely to be completed by next week and Buyers side due diligence to be completed by end of May provided current pandemic situation improves to some extent. Furthermore, transaction structures of Services International Hotel and divestment of Pak re insurance shares have been finalized. However, strategy is being devised in consultation with Financial Advisors (FAs) to market both these transactions in due course of time depending on the prevailing market conditions and economic situation.
Press Release
Oil price barrels ahead as OPEC flags meeting
April 04, 2020: The price of crude oil surged again Saturday after OPEC said it would talk to non-members, notably Russia, giving investors hope for an end to a price war which has created market chaos along with crushed demand because of the coronavirus.
OPEC oil producers and their allies will meet Monday via video conference, a source close to the cartel said. And Russian President Vladimir Putin said his country was ready to cooperate with Saudi Arabia and the United States on a production cut.
"There's certainly a lot of optimism that a deal is going to be done," OANDA analyst Craig Erlam told AFP.
Despite the happy talk in the oil sector, global stock markets fell following another set of devastating American employment numbers, gloomy eurozone services data and news that the number of declared COVID-19 infections passed one million worldwide.
The US economy shed 701,000 jobs in March amid the damage inflicted by the coronavirus shutdowns -- several times the market's consensus forecast -- while the unemployment rate surged to 4.4 percent, the Labor Department reported.
That sent Wall Street to a sputtering finish, with the Dow losing 1.7 percent and the S&P 500 and Nasdaq posting similar falls.
- 'Likely to worsen' -
"The markets are digesting a larger-than-expected drop in March employment, which is likely to worsen on the heels of the past two weeks of spikes in jobless claims that approached the 10 million mark," analysts at the Charles Schwab brokerage said.
OPEC's move meanwhile sparked fresh speculation of an oil production cut, one day after US President Donald Trump ignited a record crude price rally by hinting that Riyadh and Moscow planned to end their price war with a sharp reduction in output.
According to a Russian source cited by the TASS agency, US officials also have been invited to take part in the meeting.
"It is in all parties' interests to agree to a significant cut," said Michael Hewson, an analyst at CMC Markets.
But even reducing output by 10 million barrels per day "is unlikely to be enough to push prices up much higher from here with demand on the floor," Hewson cautioned.
Oil prices had plunged this year as the market reeled from the effects of the new coronavirus pandemic, which depressed demand amid a worldwide economic shutdown with WTI shedding around 65 percent of its value in the first quarter.
A price war, triggered last month by Saudi after Moscow refused to tighten oil supply to counteract the sharp drop in demand, added to the bloodbath.
- 'Recession knocking' -
Equity investors remain hostage to uncertainty as they try to gauge the long-term economic impact of the pandemic, which International Monetary Fund chief Kristalina Georgieva said already has plunge the planet into recession.
Swissquote Bank analyst Ipek Ozkardeskaya told AFP the "complete shutdown of businesses worldwide is taking a heavy toll on the global economy."
"The coronavirus outbreak hits all layers of the population, has had an impact on each and every single business regardless of their size and paralyzed each and every household regardless of their wealth," she said.
"You do not need to be an economist or an expert to predict a meaningful recession knocking on the door."
- Key figures around 2030 GMT -
- Brent North Sea crude: UP 16.4 percent at $34.84 per barrel
- West Texas Intermediate: UP 14.1 percent at $28.99
- New York - Dow: DOWN 1.7 percent at 21,052.53 (close)
- New York - S&P 500: DOWN 1.5 percent at 2,488.65 (close)
- New York - Nasdaq: DOWN 1.5 percent at 7,373.08 (close)
- London - FTSE 100: DOWN 1.4 percent at 5,406.17 points (close)
- Frankfurt - DAX 30: DOWN 0.5 percent at 9,525.77 (close)
- Paris - CAC 40: DOWN 1.6 percent at 4,154.58 (close)
- EURO STOXX 50: DOWN 1.0 percent at 2,662.99 (close)
- Tokyo - Nikkei 225: FLAT at 17,820.19 (close)
- Hong Kong - Hang Seng: DOWN 0.2 percent at 23,236.11 (close)
- Shanghai - Composite: DOWN 0.6 percent at 2,763.99 (close)
- Euro/dollar: DOWN at $1.0807 from $1.0964 at 2100 GMT
- Dollar/yen: UP at 108.42 yen from 107.17
- Pound/dollar: DOWN at $1.2273 from $1.2371
- Euro/pound: DOWN at 88.04 pence from 88.62 pence
AFP/APP
Weekly SPI Decreases by 2.01 Percent
April 03, 2020 (MLN): The Weekly Sensitive Price Indicator (SPI) for the Combined Group decreased by 2.01% during the week ended Apr 02, 2020 while the SPI increased by 9.27% compared to the corresponding period from last year.
According to data released by the Pakistan Bureau of Statistics (PBS) the Combined Index was at 125.52 compared to 128.1 on Mar 26, 2020 while the index was recorded at 114.87 a year ago, on Apr 04, 2019
Out of the 51 monitored items, the average price of 13 items increased, 14 items decreased whereas 24 items registered no change during the week.
The weekly SPI percentage change by income groups showed that SPI decreased across all quantiles ranging between 2.1% and 1.77%.
The Lowest Income Group witnessed a weekly decrease of 1.77% while the highest income group recorded a decrease of 2%.
On an yearly basis, analysis of SPI change across different income segments showed that SPI increased across all quantiles ranging between 8.27% and 12.66%.
Yearly SPI for the Lowest Income Group increased by 10.44% while the highest income group recorded an increase of 8.27%.
The average price of Sona urea stood at Rs.1684 per 50 kg bag which is 0% lower than last week’s price and 7.32% lower when compared to last year.
Meanwhile, average Cement price was recorded at Rs.541 per 50 kg bag, which is 0.19% higher than the previous week and 9.83% lower than prices last year.
Copyright Mettis Link News
SBP extends its relief package to borrowers availing loans under Refinance Schemes
April 03, 2020: State Bank of Pakistan has continuously been reviewing the challenges arising out of COVID-19 pandemic situation with particular reference to the financial sector and taking measures. Expanding the scope of its recently announced relief package for households and businesses, SBP has taken another major step today.
State Bank has allowed similar relaxations, as provided under the relief package, on its concessional refinance schemes. Under various refinance schemes loans are provided with preferential terms and conditions to promote growth in priority sectors of the economy.
Now the relaxation allowed for deferment in repayment of principal amount for one year for corporate, consumer, agriculture, SMEs and microfinance sectors, will now be available on financing of banks/ DFIs under SBP’s refinance schemes as well. With this deferment of principal, the complete repayment schedule/tenor of the loan will be extended by one year.
The borrowers will, however, continue servicing their mark up during the period of principal deferment. In case borrowers are not able to service mark-up payment, banks/DFIs may reschedule/restructure the loan in such a manner that tenor of the loan can go up to one year beyond the existing maximum tenor of the respective scheme.
Borrowers of SBP’s following refinance schemes and their Shariah alternatives would benefit from this relaxation:
• Long Term Financing Facility (LTFF)
• Financing Facility for Storage of Agricultural Produce (FFSAP)
• Refinance Facility for Modernization of SMEs
• Refinance and Credit Guarantee Scheme for Women Entrepreneurs
• Refinance Scheme for Working Capital Financing of Small Enterprises and Low-End Medium Enterprises
• Small Enterprise (SE) Financing and Credit Guarantee Scheme for Special Persons
Press Release
PM announces package for construction industry
April 03, 2020: Prime Minister Imran Khan has announced an incentivized package for the construction industry in order to increase employment opportunities in the country in the wake of coronavirus outbreak.
Announcing the package in Islamabad on Friday, he said those who invest in the sector will not be asked questions about their source of income.
The Prime Minister said fixed tax will be introduced in construction sector now.
He said if the investor invests in construction projects under Naya Pakistan Housing Authority, ninety percent fixed tax will be removed and he will have to pay only ten percent tax. He said withholding tax on construction will be lifted from all sectors, except steel and cement.
Imran Khan said sales tax is also being brought down in coordination with the provinces. The Prime Minister said there will be no capital gains tax for a family that sells its house.
He said a Construction Industry Development Board is also being set up to promote the construction industry.
Radio Pakistan
Oil resumes surge as OPEC calls Monday meeting
Apr 03, 2020: Crude resumed its surge Friday with Saudi-led OPEC set to hold a video conference with non-cartel members, notably Russia, that could stop a price war that along with crushed demand because of the coronavirus has plunged the market into chaos.
Global stock markets, meanwhile, mostly fell Friday on news that the total number of COVID-19 infections had hit one million worldwide, while investors fretted over gloomy eurozone services data and awaited key US non-farm payrolls figures.
The dollar was higher against main rivals ahead of the key data.
OPEC's move meanwhile sparked fresh speculation of an oil production cut, one day after US President Donald Trump sparked a record crude price rally by hinting that Russia and Saudi Arabia planned to end their price war with a sharp reduction in output.
In Friday trading, Brent North Sea oil leapt more than ten percent to $33.37 per barrel. West Texas Intermediate rallied more than five percent to $27.00.
On Thursday, Brent had hit an intra-day high of $36.29 per barrel, up almost 46 percent, and WTI soared around 35 percent to $27.39.
"There's certainly a lot of optimism that a deal is going to be done" on the price war, said OANDA analyst Craig Erlam told AFP.
According to a Russian source cited by the TASS agency, US officials have also been invited to take part in the meeting.
Prior to Thursday's surge, oil prices had plunged this year as the market reeled from the effects of the new coronavirus pandemic, with WTI shedding around 65 percent of its value in the first quarter.
The market has crashed also owing to the price war, triggered last month by Saudi after Moscow refused to tighten oil supply to counteract the sharp drop in demand.
- Equities struggle -
Equities struggled after another thunderous rise in US jobless claims highlighted the economic devastation caused by the coronavirus.
As the number of people with COVID-19 tops a million and the death toll continues to climb, investors remain hostage to uncertainty as they try to gauge the long-term economic impact of the pandemic, which is widely expected to plunge the planet into recession.
"The short-term impact of the coronavirus tragedy is straightforward: a complete shutdown of businesses worldwide is taking a heavy toll on the global economy
"The coronavirus outbreak hits all layers of the population, has had an impact on each and every single business regardless of their size, and paralyzed each and every household regardless of their wealth," Swissquote Bank analyst Ipek Ozkardeskaya told AFP.
"You do not need to be an economist or an expert to predict a meaningful recession knocking on the door."
But with trillions of dollars pledged in government support, the wild volatility that characterised markets at the start of the crisis has given way to some form of stability.
Markets were choppy after data showed 6.7 million US workers applied for unemployment benefits last week, on top of the 3.3 million the week before as the coronavirus forced businesses nationwide to close their doors.
- Key figures around 1050 GMT -
Brent North Sea crude: UP 10.1 percent at $32.97 per barrel
West Texas Intermediate: UP 5.0 percent at $26.59 per barrel
London - FTSE 100: DOWN 1.2 percent at 5,414.29 points
Frankfurt - DAX 30: DOWN 0.7 percent at 9,506.00
Paris - CAC 40: DOWN 1.2 percent at 4,171.29
Milan - FTSE MIB: DOWN 1.7 percent at 16,552.01
Madrid - IBEX 35: DOWN 0.4 percent at 6,550.90
EURO STOXX 50: DOWN 1.0 percent at 2,661.96
Tokyo - Nikkei 225: FLAT at 17,820.19 (close)
Hong Kong - Hang Seng: DOWN 0.2 percent at 23,236.11 (close)
Shanghai - Composite: DOWN 0.6 percent at 2,763.99 (close)
New York - Dow: UP 2.2 percent at 21,413.44 (close)
Euro/dollar: DOWN at $1.0799 from $1.0964 at 2100 GMT
Dollar/yen: UP at 108.25 yen from 107.17
Pound/dollar: DOWN at $1.2303 from $1.2371
Euro/pound: DOWN at 87.84 pence from 88.62 pence
AFP/APP
Govt offers Rs 100 billion to uplift industry: Dawood
Apr 03, 2020: Adviser to Prime Minister for Commerce and Textile, Abdul Razak Dawood on Friday said that the government had offered up to Rs100 billion packages to the industrial sector as a support following current challenging situation, created due to COVID- 19 pandemic.
“We are continuously in contact with all major industrial sectors, including textiles and construction. With consultation of all stakeholders, the government would give incentive to the priority areas of industrial sector for revival in current critical situation,” Razaq Dawood told APP here on Friday.
The government wanted to resolve the liquidity issue of industrial sector, he said adding that Drawback of Local Taxes and Levies (DLTL) payments would be made, which were pending since 2009.
The adviser said the government would pay Technology upgradation fund worth Rs30 billion to the industrial sector to help it come out from the current challenge of COVID- 19 Coronavirus pandemic.
He informed that total Rs 47 billion would be paid to the textiles sector in coming 100 days to support the major export sector of the country.
Replying to a question, he said the government would pay all the refunds including in Rs200 billion packages to compensate the industrial sector in coming Budget 2020-21.
He said that this package would be paid at faster pace to the industries, adding that all the stakeholders were on board with the government to evolve joint strategy to resolve all the issues of industrial sector in current situation.
He said that promoting industries and giving incentives to the business community was an important step to leading the country forward.The government would support the industrial sector and provide Incentives.
The commerce ministry has also prepared a list of industries which could be reopened in the current situation, he said.
The adviser said the refund of Rs100 billion for the business community is a part of that process and the government was committed to ensure timely refunds to the business community in this challenging situation.
Razak Dawood said that his ministry was in constant contact with the business community to figure out how the challenge posed by the epidemic can be resolved in country’s industrial sector.
He hoped the government and business community including all industrial was one page, with joint plan of action with consensus of all stake holders “we would overcome on economic challenges after the COVID-19 pandemic Coronavirus.
President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Mian Anjum Nisar while talking to APP hailed the Rs 100 billion package offered by the government.
He said the government would take preventive measures and develop strategy to protect the pace of economic and trade progress and effects of world economic slowdown as apprehended by leading research organization after evolving the situation in COVID-19 pandemic.
Mian Anjum Nisar while talking to APP said that the whole world including the potential market of Europe Union (EU) was effected by the coronavirus, which was the second biggest trade destination for Pakistan after the Generalized Schemes of Preferences (GSP-Plus) offered by EU in 2013.
In this regard, the government must to go for conducting studies for mitigating the economic changes after Coronavirus.
Renowned industrialist from Baluchistan, Ex-President FPCCI , Eng. Daroo Khan welcomed the package announced by the government and said that proper mechanism was required to disburse this package according the needs for different industries.
He suggested that the government engage all stakeholder to resolve the current evolving challenge.
On the occasion, President Islamabad Chamber of Commerce and Industries (ICCI) Muhammad Ahmed Waheed said that his chamber was fully engage in consultation with government in current challenging situation.
Business community of the twin’s city welcomed the Rs100 billion package offered by the government for industrial sector.
President, Karachi Chamber of Commerce and Industries, Agha Shahab Ahmed Khan appreciated the government efforts for mitigating the current challenge.
He said that his chamber and business community from all over the country was committed to support the government in current evolving situation.
President, Peshawar Chamber of Commerce and Industry Engr. Maqsood Anwar Pervaiz said that business community of Khyber Puktunkwa (KPK in cooperation with government and stand with the government and lauded Rs 100 billion package announced by the government.
APP
Sensitive price indicator increase falls to 9.27%: Asad Umar
April 3, 2020 (MLN): Minister for Planning and Development, Asad Umar has said that the Sensitive price indicator increase has fallen to 9.27%.
‘This is the first time in more than a year that it has fallen into single digit and is the lowest increase in 14 months’ he said via his Twitter handle on Friday
The sensitive price indicator is the most accurate measure for calculating the price increase of essential items, he added.
Copyright Mettis Link News
PM thanks Facebook COO for support, working together for common cause during COVID-19
April 2, 2020: Prime Minister Imran Khan Friday thanked Facebook Chief Operating Officer (COO) Sheryl Sandberg for the support and working together for a common cause to improve the lives for millions and remarkable work her team was doing during COVID-19 pandemic.
In her message to Prime Minister Imran Khan on his official Facebook page Imran Khan, Sheryl Sandberg had thanked and appreciated him saying; “Thank you for your partnership. I am so glad we are working together to provide timely, accurate information and help people fight the coronavirus in Pakistan.”
In his response, Prime Minister Imran Khan responded saying; “I am glad we are working for a common cause to improve lives for millions. Hope you are doing well, thank you, Sheryl, for your support and the remarkable work your team is doing.”
This comes after Prime Minister Imran Khan’s vision of effective, accurate and timely information for the masses is being implemented in partnership with Facebook and Whatsapp as measures during COVID-19 pandemic.
Pakistan government recently launched a Corona Helpline on WhatsApp. This new service, which is free-to-use, provides a central source of accurate, trustworthy and up-to-date information about coronavirus (COVID-19) for everyone in Pakistan.
Prime Minister Imran Khan and Sheryl Sandberg had a one-one meeting earlier this year during the World Economic Forum at Davos where PM Khan was leading the Pakistani delegation.
APP
