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ISLAMABAD (June 03, 2009): The United States is seeking an extra 200 million dollars in emergency aid to help Pakistanis displaced by a military offensive in the northwest against the Taliban, US special envoy to Pakistan, Afghanistan Richard Holbrooke said on Wednesday.

"Today, the president has asked me to inform you and your government that he has requested the Congress of the United States to allocate an additional 200 million dollars," said Holbrooke.

"Our delegation has come at very short notice at the personal instruction of President (Barack) Obama," the US ambassador told a news conference in Islamabad flanked by President Asif Ali Zardari.

"He sent our team to Pakistan to do several things, first to show our concern to the people of Pakistan and to the world our concern for the internal refugees," Holbrooke added.
 

ISLAMABAD (June 03 2009): Succum-bing to pressures from various quarters, the government has altered its policy of adopting an expansionary fiscal policy, said Shaukat Tarin in an exclusive talk with Aaj TV program 'Islamabad Tonight'. The government is enhancing developing spending to almost Rs 750 billion, with Rs 150 billion outside Public Sector Development Program (PSDP), to be funded from additional Rs 200 billion, to come from donors, he said.

"Key challenge for the government is to revive growth now, while we have achieved fiscal and balance of payments balance after a strenuous effort", he sid, adding: "We still need to work more on reduction in inflation and to continue achieved balance of payments deficit".

The pay and pensions of government employees would be increased up to the level of inflation, which comes up to 20 percent as the running basic. In addition, poor class would get various levels of support, with increase in four components of Benazir Income Support Program, he said.

Tarin said that the overall size of the consolidated budget would be near Rs 3 trillion, and fiscal deficit could reach up to 5 percent of the GDP in next year, as expenditure on internally displaced persons (IDPs) would force to spend more.

He said that two new banks were being set up, which would focus to offer long-term industrial loans. Initial equity for one bank would be around Rs 6 billion. The government is encouraging public-private partnership in running government commercial organisations. IPDF of Finance Ministry would be given four new projects for promotion of public-private partnership, he said.

Tarin said that to promote transparency entire taxes on petroleum would be consolidated into one tax, though its details were being worked out. Budget announcement would entail Resolution Trust Corporation for sick units and introduction of bankruptcy law would also help industrial units to take new shape and cope with their problems, he added.
 

EDITORIAL (June 03 2009): It looks that mismanagement in the external sector would continue to haunt the country for a long time to come. This has become our habit to finance the current account deficit, resulting from an excess in import payments over export receipts through loans and other capital inflows from various sources which have to be repaid over time.

The structural external sector imbalance and its financing has thus become a kind of vicious circle which is hurting the country increasingly and pre-empting foreign exchange resources in larger amounts with the passage of time. According to the latest data released by the State Bank, the country's external debt servicing stood at dollar 3.654 billion including principal amount of dollar 2.836 billion and dollar 818 million of interest payment in July-March, 2009.

This was 16 percent higher than overall debt servicing of last fiscal year, which was dollar 3.161 billion (principal amount of dollar 1.931 billion and dollar 1.23 billion of interest payment). The major payments under debt servicing were made on account of public and publicly guaranteed loans, under which dollar 2.843 billion were paid while debt servicing under non-guaranteed loans stood at dollar 459 million during July-March, 2009.

Payments to IMF and Paris Club stood at dollar 160 million and dollar 295 million respectively. Major reason for current surge in debt servicing was stated to be payment of Euro Bond worth dollar 500 million and short-term loans of Islamic Development Bank. It needs to be pointed out that huge amount of dollar 1.165 billion of debt servicing was also rescheduled due to insufficient foreign exchange reserves during the first nine months of the current fiscal year as against dollar 1.2 billion during FY08.

A sharp increase in external debt servicing during the current year is indeed a disturbing development and reflects mainly the growing stock of outstanding external debt and liabilities (EDL) caused mainly by a high current account deficit of the country. The EDL which stood at dollar 46.3 billion at the close of June, 2008 are now estimated to be around dollar 50 billion. The rise in external debt servicing would not have been much of a problem if foreign exchange reserves of the country were swelling or at least adequate to meet the foreign liabilities expected in future but the position of Pakistan is quite the reverse.

Our foreign exchange reserves had declined to a dangerously low level of dollar 6.0 billion in November, 2008 from a peak level of dollar 16 billion in November, 2007 due to slow foreign inflows and rising outflows. The current level of reserves at about dollar 11 billion is not only barely sufficient to meet the country's foreign exchange needs but has been largely accumulated through contracting of more foreign loans from various sources which certainly is poor house keeping.

If the present trend continues, a substantial part of country's foreign exchange earnings would have to be earmarked for meeting the external debt servicing requirements of the country, with little left for other essential imports. Of course, the State Bank or the government cannot print dollars or other hard currencies and the only way to reverse such a dangerous trend is to earn a surplus in the current account balance of the country.

It is not difficult to understand that in order to arrive at such a sustainable position in the external sector and reduce the level of external debt servicing, the country has to expand exportable surpluses. Exporters may need to be helped with a more favourable exchange rate. The President and the Prime Minister need to press our trading partners, who claim to be our friends, for more market access and at the same time contain import demand through a combination of tight monetary and fiscal policies along with appropriate exchange rate regime to maintain our competitiveness in the international market.

SBP may need to shift the total load of oil import need on the interbank market earlier than committed to the Fund. It needs to be recognised, nonetheless, that in the recent past, Pakistani authorities have done quite a bit and tried to move in the desired direction but obviously much more needs to be done to improve the current account balance of the country to a satisfactory state.

We know the difficulties of the government, particularly at this juncture, to undertake the necessary efforts to steer the country out of the developing crisis but ignoring the problem of mounting debt servicing for a considerable length of period has also its own perils. Postponing the problem by rescheduling of debt is only a temporary respite and should only be considered as a last option under exceptional circumstances.
 

EDITORIAL (June 03 2009): Talking to the media, after a detailed presentation on the budgetary outlays to the National Assembly Committee on Finance, the Federal Secretary Finance and Revenue Salman Siddique has revealed that the provinces have agreed on taxing four services (without disclosing the names) in the next budget. And, he expects to net Rs 15 to 30 billion.

Another positive development reported by him, was the agreement, reached with the provinces on levy of Capital Gains Tax on property. A meeting is scheduled to be held to have uniformity of rate and collection methodology, Salman revealed. With the economy growing at six percent plus - tax collection in absolute numbers did go up.

However, the tax to GDP ratio continued to stagnate and in fact declined this year. The economic slowdown in current financial year is now forcing the government to get its act together and obtain a national consensus to have more equitable sharing of burden of tax. Escalation of tax rates will militate against the objective of revival of growth.

In fact, the corporates are clamouring for a reduction. In 2008, a World Bank and FBR study estimated the measure of tax evasion in corporate income tax at four percent of the GDP. A reward based mechanism for tax men needs to be introduced to plug the leakages.

Country's Constitution allows the Federal Government to collect sales tax on goods only. Sales tax on services is a provincial tax. Federal government can collect the same on behalf of provincial government, against a nominal fee.

Our eastern neighbour collects sales tax in non-adjustable mode on 90 odd services. These include: Accountants; Shipping; Architects; Import cargo handling; Customs Agents; General Insurance; Banking and Financial Services etc.

FBR has selected four sectors out of 45 identified for imposition of sales tax in 2009-10. This provincial sales tax has to be a flat rate of five percent or less non-adjustable. 16 percent adjustable (ie in VAT mode) would not fetch substantial revenue. If imposed on four services the collection would be less than Rs 15 billion.

To collect Rs 30 billion, a dozen sectors, at least, would need to be roped in. Decision-makers are busy in planning steps or measures aimed at improvement in revenue collection. Once the budget exercise is over, attention needs to be diverted towards reduction in expenditure.

It appears that Prime Minister's target of 40 percent cut in establishment cost has been forgotten. In fact, 25 to 30 percent increase - excluding rise in subsidies and defence - over the budgeted figure is expected for 2008-09. PPP-led coalition government has been promised support, on national issues, by both PML (N) and PML (Q).

The time is appropriate to adopt a zero based budgetary approach for reducing 31 divisions, 422 attached departments and 105 autonomous bodies and corporations under Parliamentary supervision. This would result in reducing the federal government to 18 ministries and 24 divisions.

This appears to be politically unfeasible. Success on this score is the real test of leadership. Non-operational salary expenses within the government can be reduced and user charges for services levied with retention of proceeds. People can live with big government provided it is a government which can deliver. Unfortunately, this is not so.
 
July-April: Rs 145 billion released for PSDP projects
ZAFAR BHUTTA
ISLAMABAD (June 04 2009): The Finance Ministry released Rs 145 billion for development projects under Public Sector Development Programme (PSDP) during nine months (July-April) of the current financial year. According to sources, the Ministry has assured the Planning Commission that it would release the entire amount of Rs 219 billion allocated for development projects under PSDP by the end of June 2009.

The so far released amount includes 66 percent foreign aid and 39 percent of the original allocation. Due to financial constraints during the current financial year 2008-09, the government had conducted a rationalisation exercise to reduce the burden on PSDP.

Initially, the Planning Commission advised the Ministries/Divisions in August 2008 to review their ongoing and future projects/programmes focusing on high priority projects; medium priority projects; projects likely to be delayed for 2-3 years; projects to be dropped/discontinued and projects likely to be shifted on public private partnership (PPP) mode.

In January 2009, Finance Division advised the Planning Commission to reduce throw forward of ongoing projects by 20 percent to qualify for World Bank's Poverty Reduction Support Credit-1 (PRSC-1). In turn, Ministries/Divisions were requested to review their ongoing portfolio and identify possible savings placing projects in categories including:

Projects of high priority to be fully protected; Projects which implementation could be delayed for 1-2 years; to identify projects to be dropped from PSDP, projects likely to be shifted to the public private partnership mode and projects in Balochistan NWFP be exempted from any rationalisation.

Consequently, 140 projects were either discontinued or placed for execution as private public partnership that reduced future liability by Rs 385 billion. In March 2009, Finance Division reduced the size of federal PSDP to Rs 219 billion against approved size of Rs 371 billion. Finance Division has also transferred the Benazir Income Support Programme from the development to current budget.

Finance Division slashed allocation in infrastructure sector by 50-70 percent from Rs 178 billion to Rs 96 billion with Rs 82 billion reduction. Social sector allocation was reduced by 70 percent of original allocation from Rs 161 to Rs 99 billion placing a cut of Rs 62 billion. Production sector faced a reduction of Rs 3 billion from Rs 20 to Rs 17 billion, Science and Technology Infrastructure from Rs 7 to Rs 5 billion and Environment allocation was reduced from Rs 5 to Rs 2 billion.

Business Recorder [Pakistan's First Financial Daily]
 
Government expects approval of four projects: World Bank Board meets today
RECORDER REPORT
ISLAMABAD (June 04 2009): The World Bank (WB) is likely to consider five development projects worth $1.2 billion as the WB board meets on Thursday in Washington. Sources told Business Recorder on Wednesday that Pakistan is seeking the amount for various development projects in education, poverty alleviation and social safety net.

The projects include Sindh Education Sector Programme costing $300 million, Punjab Education Sector Programme $350 million, Poverty Alleviation Fund III $200 million and Social Safety Credit Policy worth $200 million. According to sources there is another project, however, they refrained from giving any detail. The government expects that the Board would only approve the four projects costing around $1050 million.

Business Recorder [Pakistan's First Financial Daily]
 
Stocks breach psychological barrier of 7,000 points
By Our Staff Reporter
Thursday, 04 Jun, 2009

KARACHI: The KSE 100-share index on Wednesday fell below the 7,000-level as some of the leading base shares ended with lower-locks followed by reports of massive foreign unloading. The index was down by 135.17 points or two per cent at 6,989.94.

The bulk of the targeted selling remained confined to market pivotals such as OGDC, Pakistan Oilfields, National Bank, MCB Bank and some other base shares dragging the index sharply lower.

However, unlike the pre-budget sessions when the market rose and fell on a mixed combination of positive and negative leaks, this time the trend is on the lower side no flutters here and there.

The decline was led by the banking and oil sectors. The former came in for active selling on reports of likely imposition of service charges followed by fears of slow growth, while the latter on foreign selling.

After early rising to the session’s high of 7,183.52, it steadily fell to finish slightly above the low of day at 6,989.94, shedding another 136.17 points eroding Rs41 billion from the market capital.

The KSE 30-share index on the other hand suffered a massive loss of 226.78
points or about three per cent at 7,445.14 on active profit-selling in some leading industrials.

Analysts said as the budget announcement (June 13) is drawing nearer, speculators were becoming more active in spreading rumours, notably those which could accelerate the pace of selling on the blue chip counters.

Leading gainers were again led by Dreamworld and Atlas Honda, up by Rs11 and Rs6.12, followed by Mehmood Textiles, Liberty Mills, KSB Pumps, Abbott Lab, Ferozsons Lab, Packages, Glaxo-SKF and Atlas Honda, up by Rs1.57 to Rs6.12.

The prominent losers included Bata Pakistan and Unilever Pakistan, off by Rs30 and Rs28.99. They were followed by Adamjee Insurance, EFU General, Shell Pakistan, Mari Gas, Dawood Hercules, Sanofi-Aventis, Colgate Pakistan and Shezan International, which suffered fall ranging from Rs4.50 to Rs7.71.

Trading volume rose to 140m shares from the previous 84m shares as losers held a strong lead over the losers at 212 to 86, with 15 shares holding onto the last levels.

The active list was again topped by JS & Co, off Rs1.32 at Rs25.20 on 19m shares, followed by OGDC, lower by Rs1.86 at Rs74.86 on 10m shares, National Bank, off Rs3.33 at Rs64.70 on 8m shares, Arif Habib Securities, off Rs1.49 at Rs28.49 also on 8m shares, KESC, up by 22 paisa at Rs3.12 on 8m shares, PTCL, lower 46 paisa at Rs16.04 on 7m shares and D.G. Khan Cement, easy by Rs1.25 at Rs23.77 also on 7m shares.

MCB Bank followed them, sharply lower by Rs7.71 at Rs148.66 on 5m shares, Saudi Pak Bank, firm by 97 paisa at Rs7.56 on 5m shares and Pakistan Petroleum, up Rs1.31 at Rs180.36 also on 5m shares.

Forward counter

Barring Fauji Fertiliser and some other leading shares which managed to finish on the higher side, all other blue chips showed widespread fall including Habib Bank, MCB Bank, National Bank, PSO and others.

But the decline was speculative as no transaction was noted in any of them and price decline was not halted till the close.

Defaulter counter

The trading pattern on this counter on the other hand was mixed as some shares managed to finish higher under the lead of Unity Modaraba and Delta Insurance, up by four paisa and Re1, but on the other hand Trust Brokerage and Elahi Cotton fell by Re1 each on stray selling.

Among the actives, Zeal Pak Cement and Japan Power were leading, lower by one and three paisa at Rs0.41 and Rs2.07 on 1.373m and 0.404m shares respectively. Others were modestly traded.

DAWN.COM | Business | Stocks breach psychological barrier of 7,000 points
 
Telecom companies to jointly invest one billion dollars
By Ahmad Hassan
Wednesday, 03 Jun, 2009

ISLAMABAD: The Chief Executive officers of major telecom companies working in Pakistan have expressed their commitment to jointly invest at least US$ one billion in infrastructure, capital expenditure and technology in the next fiscal year to complement the enabling environment that the government is providing as a stimulus.

According to an official handout, the CEOs of all telecom companies in Pakistan including Mobilink, Warid, Ufone, Telenor and China Mobile called on Prime Minister, Syed Yousuf Raza Gilani at the PM’s House Wednesday afternoon and discussed with him matters relating to the cellular companies in perspective of the upcoming budget.

The Prime Minister appreciated the investment made by the mobile companies in the telecom sector of Pakistan, which has so far attracted foreign direct investment of US$ nine billion amounting to 46per cent of country’s total FDI in the last three years.

Ambassadors of China, Mr. Luo Zhaohui; Egypt, Mr. Megly Amer; Norway, Robert Kvite and UAE, Mr. Ali Saif Al-Awani were also present during the meeting.

The Prime Minister appreciated the investment made by the mobile companies in the telecom sector of Pakistan, which has so far attracted foreign direct investment of US$ nine billion amounting to 46per cent of country’s total FDI in the last three years.

The Prime Minister assured the meeting that the government would continue to provide incentives to the telecom industry so that the sector may continue to attract more investment and create more jobs.

DAWN.COM | Business | Telecom companies to jointly invest US$ one billion
 

Says Pakistan facing high inflation due to under-utilisation of domestic resources, fiscal restraint is the wrong recipe for its woes​

Thursday, June 04, 2009
By Khalid Mustafa

ISLAMABAD: The Asian Development Bank (ADB) has surprised the economists of the country, saying that the IMF programme loan of $7.6 billion under Stand By Arrangement with its conditions is not the right recipe for Pakistan’s economic ills.

“Indeed, we believe that the IMF conditions will reduce the capacity to engineer a solution to the problems of inflation and falling foreign currency reserves without increasing the unemployed buffer stock,” said Jesus Felipe, William Mitchell and L. Randall Wray, the authors of the ADB’s report titled A Reinterpretation of Pakistan’s Economic Crisis and Options for Policymakers released here on Wednesday.

“While the IMF statement suggested it is keenly aware of the need to deploy a ‘socially acceptable’ solution, we consider that a policy strategy based on fiscal austerity will create unacceptable levels of socio-economic hardship in Pakistan,” the report said.

The report was written at the time when agreement with IMF for the 23-month stand-by arrangement amounting to $7.6 billion was reached to support ‘economic stabilisation programme’ and the first tranche of $3.1 billion was released to Pakistan.

There existed two key objectives of the IMF loan that included I) restoration of macroeconomic stability and confidence through a tightening of macroeconomic policies; and ii) to ensure social stability and adequate support for the poor and vulnerable in Pakistan.

Under the loan terms the external balance is to be targeted via a fiscal tightening from a deficit of 7.4 per cent of GDP for the fiscal year 2007-2008, to 4.2 per cent in 2008-2009, and then 3.3 per cent in 2009-2010.

The tightening is to be achieved by phasing out energy subsidies, better prioritising development spending and implementing strong tax policy and administration measures, interest rate hike to contain inflation, offload central bank borrowings, and build reserves.

As per loan terms the social assistance is to be strengthened but better targeted such that spending on the social safety net will be increased to 0.9 per cent of GDP in 2008-09, an increase of 0.6 percentage point of GDP.

The authors of the report criticised the said covenants of the Fund’s programme loan saying it would not help bail out Pakistan’s economy. “The Fund is less than clear on; (i) the nature of currency sovereignty; (ii) the nature and financing of budget deficits; and (iii) the nature and financing of trade deficits.”

Although Pakistan’s problems are result of misguided policies, it does not mean that the only solution available is to subject the economy to an austerity programme. In the words of Joseph Stiglitz renowned economist and former SVP of World Bank, “Stabilisation policy cannot be separated from growth policy. Failure to stabilise may hurt growth, but stabilisation, in the traditional sense of the term (price stability and fiscal adjustment), does not necessarily lead to economic growth.”

Architects of the ADB report believe that the IMF programme does not correctly portray the sources of inflation pressures, or the constraints on economic development. “Pakistan faces high inflation and insufficient progress toward development,” the report points out and says that the country is not fully utilising its domestic resources.

Pakistan in order to achieve sustainable development should mobilise domestic resources to improve incomes and reduce supply bottlenecks through expansion of domestic capabilities, the ADB report suggests.

Given substantial levels of redundant resources, they say, it should have been obvious that Pakistan’s inflationary bias could not be a simple matter of excessive demand. Thus, in appraising the inflationary impact it is incorrect to presume that fiscal policy has been excessively expansionary.

Using budget deficits as evidence of excessive expansionary policy is therefore erroneous, unless the deficits have pushed the economy beyond full capacity use of its resources. “For this reason, fiscal restraint may not be the medicine that is required in a situation in which a country is actually living below its means - as indicated by idle or under-utilised resources,” they concluded.

“We do recognise that Pakistan’s current situation is one in which robust growth over 5 per cent will tend to generate a current account deficit.” They explained further saying that: “From the orthodox perspective the consequences for Pakistan of having balance of payments (BOP) problems are straightforward.” When Pakistan encounters a BOP problem before short-term capacity utilization is reached, demand is curtailed, disguised and open unemployment increase, and capital accumulation has to be reduced. This leads, in the long run, to a relative deterioration of the country’s export potential compared with that of its main competitors. This situation tends to lead to a vicious circle with further BOP problems.

They said: “We do not endorse the orthodox solution.” Given that Pakistan operates with what we define below as a “modern money regime” that includes flexible exchange rates, we consider it has sufficient domestic policy space to pursue an alternative, sustainable growth path. “It can make use of this space to pursue economic growth and raising living standards, even if this means expansion of the current account deficit and depreciation of the currency.”

They also criticise the orthodox solution to a current account deficit saying it will actually make it more difficult for Pakistan to reduce dependence on imports.

The report is of the view that the IMF programme does not address the failures in the policies of the previous government, largely focused on a consumer-driven growth strategy despite the import dependent nature of the economy.

It is clear that while the country enjoyed very high levels of FDI the funds were largely concentrated in the consumer sector. This had two consequences: (i) it increased demand for foreign exchange; and (ii) it created a foreign exchange liability. The other significant point is that this investment did not generate corresponding amounts of foreign exchange revenue because it did not improve export capacity.

“The policy emphasis on fiscal restraint is also fraught with problems,” the report said saying the targets to reduce the budget deficit as required by the IMF agreement may help lower inflation, but only because the “fiscal drag” acts as a deflationary mechanism that forces the economy to operate under conditions of excess capacity and unemployment. This type of deflationary strategy does not build productive capacity and the related supporting infrastructure, thus offers no “growth solution”.

Likewise, fiscal restraint may not be successful in lowering budget deficits for the simple reason that tax revenue can fall as the taxable base shrinks because economic activity is curtailed.
 

Approach paper of 10th five-year plan says country lost around $35bn due to destruction of infrastructure and output losses since 2002-03​

Thursday, June 04, 2009

ISLAMABAD: The Tenth Five Year Plan (2010-2015) has outlined the importance to come up with the exact cost of ongoing fight against militancy, terrorism and extremism, stating that the plan will lay solid foundation for just and equitable development, which will be best way of defeating the obstructionist forces.

The approach paper of the tenth five-year plan, which will be tabled before the National Economic Council (NEC) on Thursday for formal approval in its meeting with Prime Minister Syed Yousuf Raza Gilani in the chair, states that Pakistan lost around $35 billion due to the destruction of infrastructure and output losses since 2002-03 after becoming part of the ongoing war against terrorism.

The NWFP and FATA have been most adversely affected. The government, for the first time after assuming the reins of power, is going to make a promise with the masses through the approach paper for the tenth five-year plan that it will bring fundamental changes in growth and development path which was followed in the recent past during the Musharraf regime.

“Given this scenario, it is not surprising that the country is being described as a case of economic growth without real economic development,” the approach paper states, a copy of which is available with The News. The NEC will approve the exact size of development outlay and macroeconomic targets for the next budget 2009-10. The plan will also devise a strategy about sustainability of external debt in which efforts will be made to adhere to limits envisaged under the Fiscal Responsibility and Debt Limitation Act 2005.

The plan also spells out importance for placing an effective implementation, monitoring and evaluation mechanism. This has been the proverbial Achilles’ heel of past development plans. In a period of global and domestic uncertainty, this will pose even a greater challenge. An evaluation and monitoring system of selected ongoing development projects has been set up in the Planning Commission (PC). Similar capacity needs to be strengthened or built in sectoral ministries at the federal and provincial levels.

The paper is being issued at a time when national imperatives and global developments provide compelling reasons to make fundamental changes to growth and development path. “Our past strategies have delivered spurts of high economic growth. Unfortunately these have not been sustained and only led to boom-bust cycle” it states. In most cases, these spurts have been ignited by favorable international developments and increase in foreign assistance.

The paper says: “This is because growth has been consumption led and import dependent, and not driven by increasing investment and exports.” More importantly, it states that this growth has not met “our people’s expectations” and there is increasing disillusionment with the development process.

It says progress in human and social indicators has been disappointing, poverty level remains high, job opportunities that may meet citizens are lacking and “we have witnessed glaring income inequalities appearing in recent years.”

This situation must be rectified urgently as the plan is to play a pivotal role in bringing about a fundamental change in development paradigm. In this new paradigm, ordinary people, especially those in less developed provinces and regions, must be at the center of the development process and have ownership in the economic development of the country.
 

Thursday, June 04, 2009

KARACHI: The Dow Jones Indexes and the Federation of Euro-Asian Stock Exchanges (FEAS) have jointly planned to launch three indexes on Friday (June 5) under the banner of Dow Jones FEAS Indexes.

These indexes are created with an aim of measuring the performance of companies across the Euro-Asian region. These indexes are being formulated for the first time, said the Karachi Stock Exchange (KSE) in a press note on Wednesday.

The indexes include one composite and two regional sub-indexes. The Dow Jones FEAS Indexes are designed to underline index-linked investment products such as funds and structured products, statement added.

Dow Jones FEAS Composite Index currently includes component stocks of 10 of the 32 member states of the Federation of Euro-Asian Stock Exchanges. The exchanges included Abu Dhabi (UAE), Amman (Jordan), Bahrain (Kingdom of Bahrain), Belgrade (Serbia), Bulgaria (Bulgaria), Istanbul (Turkey), Karachi (Pakistan), Macedonia (Republic of Macedonia), Muscat (Oman), and Zagreb (Croatia).

The Dow Jones FEAS Middle East/Caucasus Index currently includes stocks from the following four FEAS member exchanges: Abu Dhabi, Amman, Bahrain, and Muscat. The Dow Jones FEAS South East Europe Index measures the performance of companies in the following five FEAS member exchanges: Bulgaria, Zagreb, Macedonia, Belgrade and Istanbul.

“FEAS has promoted the development of emerging stock exchanges across the Euro-Asian region and has supported a transparent market environment between FEAS members to advance trading in these markets,” said Dow Jones Indexes President Michael A Petronella in the statement. “The introduction of the Dow Jones FEAS Indexes will support this mission as the index provides market participants with easy access to a unique combination of emerging and frontier market stocks”, he added.

“I can clearly remember the day when we founded FEAS, with merely 12 regional exchanges, fourteen years ago. Today, FEAS covers an area from Mongolia in the East to Croatia in the West, with 32 stock exchange members and seven affiliate members.
 
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