Economic, Money & Markets | Financial news

Pakistan to set guidelines for warehouse receipt financing

Pakistan's central bank has set up a working group to draft guidelines for warehouse receipt financing, to help develop a market for physical commodity trades and boost efficiency in the country's agricultural sector. The working group is chaired by central bank deputy governor Saeed Ahmad and comprises both commercial and Islamic banks as well as the International Finance Corp, the private sector arm of the World Bank. Warehouse receipts are issued as evidence of ownership of specific physical commodities, and they can be used to ease the collateral constraints of traditional financing.

Pakistan's Islamic banks could potentially use the receipts to conduct sharia-compliant lending and manage their liquidity, since many Islamic financial structures are based on ownership of physical assets. Pakistani regulators are encouraging stronger links between Islamic banks and the agricultural sector. The central bank hopes warehouse receipt financing will help farmers and traders in a sector that suffers from a lack of infrastructure. Pakistan produces around 30 million tonnes of grains annually but storage capacity is a fraction of that amount, the central bank said in a statement on Wednesday.

The regulator said it wanted to develop storage capacity to reduce post-harvest losses, estimated at more than 10 percent for grains and up to 35 percent for fruits and vegetables.

Under a five-year plan to promote the Islamic finance industry, Islamic banks are being encouraged to allocate at least 5 percent of deposits or 10 percent of financing to the agricultural sector by 2015. The central bank said the development of warehouse receipts would also pave the way for the linking of the country's commodities markets with international commodities exchanges. Development of a post-harvest financing system has started in collaboration with the Karachi stock exchange, the Pakistan Mercantile Exchange and other government bodies, the central bank said.

Poor nations struggle to spend climate aid billions charity

LONDON, Nov 3 (Thomson Reuters Foundation) - Billions of dollars pledged by developed nations in climate finance over the last decade remain unused as poor countries that often most need the money are ill-equipped to spend it, international charity WaterAid said on Tuesday. Despite donors' willingness to provide funding, vulnerable countries worst hit by rising climate pressures such as droughts and floods often lack the capacity to implement, manage and oversee projects to help them cope, WaterAid said."Countries that are most in need of adaptation finance are also those that are least able to spend it," WaterAid analyst Louise Whiting told the Thomson Reuters Foundation. More support is required to help countries get ready to use climate finance "so they can actually spend the money and get it to where it is needed", she added.

Just 15 percent of the $21.1 billion in climate finance approved by developed countries from 2003 to 2014 has been disbursed, and little of it went to the world's poorest countries, WaterAid said in a report based on research by development consultancy Oxford Policy Management. Sub-Saharan African countries received less than 2.5 percent of total climate funding in that period despite being among those at greatest risk from extreme heat and erratic rainfall, and being responsible for only a tiny fraction of planet-warming emissions, the report said. Just 16 percent of climate finance has been used for adaptation programmes, while the vast majority of the money is being spent on reducing carbon emissions in middle-income countries, it said.

WaterAid joined other anti-poverty charities in urging world leaders due to agree a new deal to curb global warming at a U. N. summit in Paris next month to boost funding for efforts to adapt to climate change impacts. WaterAid said it was alarming that, despite growing evidence linking climate change to water security, only a fraction of climate finance goes to securing access to clean water during floods or droughts, jeopardising development gains.

"For families living in extreme poverty, with fragile access to safe water, good sanitation and hygiene, these lengthening dry seasons and intensifying monsoons wipe out years of work and further entrench the cycle of poverty," Whiting said in a statement."Safeguarding basic services including clean water, sanitation and hygiene helps communities recover faster and become more resilient to climatic extremes."More than 650 million people around the world live without access to clean water and 1.2 billion live in areas of water scarcity, WaterAid said, citing United Nations' figures. They will become even more vulnerable as their already scarce resources are further exposed to climate-related threats, WaterAid said.

Press digest australian business news feb 8

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy. THE AUSTRALIAN FINANCIAL REVIEW (this site)--Observers expect one of the wealthiest men in Singapore, Richard Chandler, to make widespread changes to forestry group Gunns after being outed as a key backer of the company's latest capital raising. Mr Chandler will become the largest shareholder in Gunns, with sources believing he will own up to 40 percent of the company after the raising. Page 46.--Employees at supermarket chain Woolworths may be denied hundreds of millions of dollars in bonuses this year if the retailer fails to meet earnings growth goals under an incentive scheme. The company's earnings before interest and tax will need to rise by 3.7 percent before short-term cash bonuses can be awarded to staff. "The 3.7 percent is low by historical standards but there's doubt they'll achieve it this year," John Guadagnuolo from asset management group Aviva Investors said yesterday. Page 47.--The former head of Woolworths' food and liquor unit, Greg Foran, has been selected to lead the Chinese operations of United States retailer Walmart. Mr Foran resigned from the Australian supermarket chain last year after losing out to Grant O'Brien in a bid to become Woolworths chief executive. "China is a very important market for Walmart and I look forward to working with our 100,000 associates," Mr Foran said. Page 47.--Chris Lynch, the outgoing chief executive of Transurban , yesterday announced solid first-half earnings for the toll road developer while predicting more franked dividends. Transurban recorded a 7.5 percent increase in proportional earnings before interest, tax, depreciation and amortisation to A$390 million. However, the firm also revealed a 2 percent fall in free cash flow to A$184.2 million, dampening expectations that Transurban will be able to overcome its dividend guidance for 2012. Page 47. THE AUSTRALIAN (this site)--National Australia Bank chief executive Cameron Clyne yesterday announced that the bank's revenue had dropped by A$80 million due to increased volatility in global funding markets. Mr Clyne made the comments yesterday at the release of the lender's A$1.4 billion earnings result for the first-quarter. "We continue to operate in a very challenging, uncertain macro environment," the chief executive said. Page 35.

--Lindsay Fox, head of the Linfox logistics and transport empire, yesterday slammed supermarket giants Coles and Woolworths for "dictating" terms throughout the retail supply network. "They are expecting everything for nothing. They are going to crucify the farmers, crucify the bread manufacturers and if you spoke to most of the consumer goods manufactures at the moment, you would get a very mixed response about the aspects of dealing with these companies," he added. Page 35.--Commodities trader Glencore and global miner Xstrata yesterday confirmed their US$90 billion all-scrip merger, a deal that values Xstrata at US$62 billion. Mick Davis, chief executive of Xstrata and the proposed head of the new merged entity, yesterday said the agreement was a 21 percent premium for shareholders based on the miner's previous closing share price. "Increased scale will improve our risk profile, enhance access to capital markets and allow us to participate in industry consolidation," Mr Davis said. Page 35.--Macquarie Group yesterday announced it was cutting 1000 jobs, along with a stark 25 percent downgrade to the investment bank's full-year profit. The news shocked investors, who sent Macquarie stock down 5 percent at one stage, although the firm's shares rebounded late in the day to close 0.7 percent lower at A$25.90. "Europe has had a big impact on our market over the last 12 months and certainly over the past quarter  we don't know whether 2011 is the bottom," Nicholas Moore, chief executive of Macquarie, said. Page 35. THE SYDNEY MORNING HERALD (this site)

--National Australia Bank (NAB) yesterday announced a review into its British division, including its Yorkshire Bank and Clydesdale Bank branches, a move that could result in the lender making a multibillion-dollar sale to exit the region. "We felt the economy was bottoming last year and now that's clearly not the case  it's likely the [United Kingdom] will be in a prolonged recession," Cameron Clyne, chief executive of NAB, said. Page B1.--Visy has launched an inquiry into an alleged "widespread" fraud in its payroll office, with the packaging group accusing a worker of stealing more than A$3.31 million. Visy acquired court orders last week preventing Loretta Delianov, one of the firm's payroll managers, from using her bank accounts or dealing with three properties in Victoria. According to an affidavit from David Latta, head of risk management at Visy, Ms Delianov signed a document admitting to stealing A$991,769 since 2006, but he questioned her honesty. Page B3.--Julie and Emmanuel Cassimatis, founders of Storm Financial, yesterday said the Australian Securities and Investments Commission (ASIC) had conducted audits and reviews of the collapsed financial planning firm "on numerous occasions from 1993 to 2008" without complaint. The corporate regulator began civil penalty proceedings against the pair last year in Federal Court, claiming the founders had violated their duties as directors. ASIC is seeking to have Mr and Mrs Cassimatis banned from company directorship. Page B3.

--An investigation into the United States parent of futures trader and contracts for difference provider MF Global found the company misused clients' funds five days before filing for bankruptcy last year. Chris Campbell, partner at professional services group Deloitte, was appointed administrator of MF Global's Australian division, which held a A$319 million trading book for approximately 13,000 customers, a day after the parent company folded. Page B4. THE AGE (this site)--Local brewer Foster's Group yesterday lost the right to import beers from Japanese rival Asahi, with the latter looking to establish a foothold of its own in the Australian market. Asahi Group Tokyo will begin importing and marketing its Asahi Super Dry through its Australian business, Independent Distillers, from April 2. Foster's has responded by increasing local promotions of its international beers. Page B3.--Shares in Cochlear jumped by 7.59 percent yesterday to finish at A$62.52, despite the bionic ear manufacturer announcing a A$20.4 million half-year loss after it was forced to spend A$100.5 million recalling its Nucleus CI500 series of implants. "While the A$20 million loss was disappointing, the recall costs have been quarantined and importantly, a record number of recipients received a cochlear implant in the first half," chief executive Chris Roberts said. Page B3.--St George Bank yesterday apologised for an "inadvertent" mistake that result in the email addresses of 500 customers of St George Margin Lending (SGML) services being revealed in a mass message sent by the bank. "When I rang they said they 'retracted' it. Which apparently means if you didn't open it, it is replaced by another email. I have opened it already hence I have the private emails of 500 SGML clients. No apology email either," one client said. Page B4.--Australian fund manager Industry Funds Management has been selected by the California State Teachers Retirement System (CalSTRS) to manage more than US$500 million worth of infrastructure investments. The appointment is one of the largest commitments in infrastructure handed out by a pension fund in the United States. Chris Ailman, chief investment officer of CalSTRS, said the investment would emulate the framework of Australian super funds which have "pioneered this sector". Page B4.

Press digest australian business news march 12

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy. THE AUSTRALIAN FINANCIAL REVIEW (this site)Ian Smith, the new head of chemical and explosives manufacturer Orica and a former chief executive of gold producer Newcrest Mining, yesterday said he does not expect that he will be forced to write down the value of its Minova mining consumables business. "I don't think there's a great expectation inside the company that there's an impairment issue there with Minova at the moment," Mr Smith said. Analysts are speculating that Minova could be sold off by Orica, having failed to meet the parent company's goal of 18 percent return on net assets. Page 17.-- Alison Watkins, chief executive of GrainCorp, yesterday played down speculation that the grains handler was at greater risk of being subject to a takeover offer after Canadian agri-business Viterra revealed that it had received "expressions of interest from third-parties". "That can occupy everyone's minds but we will just get on with the job," Ms Watkins said about the Viterra bid, adding that the company was more concerned with recent flooding in eastern Australia. Page 17.-- Steve Mallyon, former managing director of coal producer Riversdale Mining, yesterday said that a move by Mozambique to prevent global miner Rio Tinto from shipping coal down the Zambezi River by barge could damage the country's exporting capacity and the country's image for mining investment. "Unfortunately this new policy is going to result in an underperforming coal sector for some time," Mr Mallyon said. Page 19.-- The most popular imported beer in Australia, Corona, will be sold locally by Japanese brewer Lion for the first time in over two decades after the company secured a distribution contract with Mexican beverage manufacturer Grupo Modelo. The move comes after Modelo cancelled local beer maker Foster's Group's distribution contract on Friday. James Brindley, beer, spirits and wine managing director at Lion, said the agreement was an "exciting development". Page 19.-- THE AUSTRALIAN (this site)Figures collected by researchers Intierra for the Association of Mining and Exploration Companies lobby group has found that Australia's share of capital for mining ventures worldwide has sunk to 15 percent from 21 percent in 2008, despite the value of capital raisings domestically growing by A$200 million to A$4.5 billion over the same period. "When you look at the numbers, this really highlights that we are not the only country in the world with minerals," Graham Short, national policy manager at the association, said. Page 19.--

Craig Kipp, chief executive of locally listed Boart Longyear , the largest drilling contractor in the world, recently said he "started the year telling the market that we were going to put points on the board and deliver to the market, and that's what we did". The firm last week posted a 89 percent increase in profit to A$160 million, with Mr Kipp adding that the contractor was forced to recruit expatriates to meet local demand for drillers and skilled labour. Page 19.-- Rio Tinto's Bret Clayton last week told analysts at a conference that the global miner was not changing its optimistic view of the Chinese economy, despite Chinese Premier Wen Jiabao announcing that growth would fall from 9.2 percent in 2011 to 7.5 percent this year. The miner's head of business support and operations said that the eastern state was experiencing "new problems" and that "prices high". Page 20.-- Rod Sims, chairman of the Australian Competition and Consumer Commission, yesterday said the competition regulator's investigations into the supermarket giants was concentrating on whether unilateral adjustments had been made to long-standing contracts with suppliers. However, the regulator admitted that the welfare of suppliers could conflict with consumers' wish for lower prices. "We don't have evidence yet of unconscionable conduct but what we do know is that it's worth looking at," Mr Sims said. Page 21.--

THE SYDNEY MORNING HERALD (this site)Pressure is mounting on fund managers to declare how much they earn in exchange for managing the country's superannuation funds, with the industry set to gain A$9.4 billion in revenue from super fund members this financial year. "As a fund, you would want to know what the executives are being paid and whether they are aligned to you, the super fund," Fiona Reynolds, chief executive of the Australian Institute of Super Trustees representative body, said. Page B1.-- According to data due to be released today from the Bank for International Settlements in Switzerland, European lenders withdrew $7.56 billion from the Australian economy in response to the euro zone debt crisis. "Pressures on European banks to deleverage increased towards the end of 2011 as funding strains intensified and regulators imposed new targets," the Swiss bank will say in its quarterly review. Page B1.-- The New South Wales government has cut its women in business mentoring scheme alongside other support services for small businesses. Small Business Minister Katrina Hodgkinson yesterday said the Advisory Service, which offers mentoring and seminars to small companies, was no longer desired by the majority of small business owners. "Many small business operators indicated they are quite often unable to take extended time away from work," she said. The government will introduce a telephone advisory hotline in its place. Page B6.--

Olympic medallist Michael Klim, who will compete at the Australian swimming qualifiers for the London Olympics this week in South Australia, has revealed that he "always wanted to create a brand of some sort, probably in fashion or something like that". The swimming star established a male skincare line of products four years ago, with the Milk brand stocked in major retailers like Myer, Coles and Woolworths. Page B6.-- THE AGE (this site)Nicole Coughlin-Smith, managing director of social media training provider Institute of Online Business, said some businesses wanted to increase their number of "likes" on Facebook due to a school of thought that believes in a correlation between sales and "likes" on the social media hub. "I know from my own point of view if I go to a website page and I see 146,000 likes, I'm pretty much going to like it myself," Ms Coughlin-Smith said. Page B4.-- Robert Green, the recently appointed chief executive of VicForests, said he believes that "we will see some significant changes to the way timber is allocated". The state government body was founded eight years ago by the Labor Party to sell native timber at auction in a bid to return a revenue to the state. Mr Green's appointment follows the release of a report by consultant URS for Treasury into VicForests' first five years, which said the state body had been restricted by a lack of control over the section of native forest available to industry. Page B8.-- Recent office market figures from the Property Council of Australia have revealed a stark fall in vacancy rates in Victoria's Southbank to 6.4 percent in January, a fall of 34 percent over the last 18 months. Baird Mackie, associate director of office leasing at real estate group Savills Australia, yesterday said tenants' view of the area was different. "Eight years ago we had to drag tenants kicking and screaming from the other side of the river," he said. Page B9.-- According to a recent study by real estate group CB Richard Ellis, Sydney and Melbourne were the third and eight-most expensive cities in the world for renting retail space. "Retailers are unskilled and ill-prepared compared with landlords," Lee Trevena from online information systems service Synetek said. "Rent is the second biggest cost for a retailer after wages, but they don't have experts in the business," he added. Page B10.--