Discount Rate

Discount rate is the rate on which listed banks borrow the money from the Central Bank (State Bank) for fulfilling their short term needs.
One common term of “Lender of Last Resort” is used for the Central Bank which is basically accessible on this rate.
Listed Banks normally consider the option of borrowing the short-term money from Central Bank as the last option due to the following reasons

· This rate is usually higher than money market rate which is basically the platform created by all the banks for fulfilling their short term needs.
· As said “Lender of Last Resort” due to the fact that Central Bank keeps the strict check and balance to that needy bank

Apart from the above fact, this rate still has an importance. This rate basically helps for quoting Interbank offered rate which is LIBOR for international Loans, TIBOR for Japan’s local loans, HIBOR for Hong Kong’s local loans and KIBOR for Pakistan means every country has interbank offered rates which are revised on daily basis. These rates are quoted for 1-week, 2-week, 1-month, 3-months, and 6-months, 9-months, 1-year, 2-years, and 3-years.
Now when a customer goes to a bank for a loan then that bank quotes a certain rate which is basically interbank offered rate + x (x is its margin or risks in bank’s terminology attached to a particular loan)
Up to a certain extend this rate does have an impact on controlling the inflation. When A particular country is in excess of money in its economy then central bank more likely can increase this rate and vice versa.
On the other hand lesser the discount rate higher the local and foreign investment in the country due to the above mentioned fact of interbank offered rate and it is obvious that higher the foreign investment higher the appreciation (demand) of your country’s currency.

Dynamic Average using MS Excel 2007

I've named Data Table as Table1. See Figure 1.0. If you are well familiar to the functionality of MS Excel 2007. This data needs to update on daily bases unless and untill there isn't any holiday.

Now, based on that data I need to identify the historical Maximum figure, Minimum figure along with the average of the particular period.

Following formula is basically to find out the maximum value in 1 month. Similarly, you can use the same one for Minimum value and Maximum Value by replacing "Average" to "Min" and "Max".

=AVERAGE(OFFSET(Table1[[#Headers],[Date]],MATCH(DATEVALUE(Date),Table1[Date],0),1):OFFSET(Table1[[#Headers],[Date]],MATCH(EDATE(OFFSET(Table1[[#Headers],[Date]],MATCH(DATEVALUE(Date),Table1[Date],0),0),-1),Table1[Date],1),1))


DATEVALUE(Date): I've defined the name "Date" to the cell of required date.


[Date]: It's the reference to coloumn of Date in Table1 which you can see in Figure 1.0
-1: In the last row you'll find this which basically represents Month. If you want to find out the average, maximum, or minimum value in last 3 months then replace "-1" to "-3"


Feel free to write your feedback.

GlaxoSmithKline in talks to buy Stiefel

NEW YORK (Reuters) - British-based pharmaceuticals firm GlaxoSmithKline PLC is in talks to buy privately-owned U.S. skincare specialist Stiefel Laboratories, a source familiar with the situation said on Sunday.
It was unclear whether a deal for the firm would be reached, the source said. The source declined to be identified because the talks are not public.
The Wall Street Journal earlier reported that a $3 billion deal for Stiefel, part-owned by buyout firm Blackstone Group, is expected to be announced on Monday. The Journal also said there is still a chance it could fall apart.
Stiefel is the world's largest independent dermatology company and is viewed as a potentially attractive asset for major drugmakers, industry experts have said.
The Journal said the business had drawn interest from a number of major drug companies, including Johnson & Johnson and Novartis AG.
A possible deal between GlaxoSmithKline and Stiefel would come on the heels of four other deals in the pharmaceuticals sector this year, three of which were massive mergers.
Pfizer Inc paid $65 billion for Wyeth, Merck & Co offered $46 billion for a takeover of Schering Plough, and Roche Holding AG dished out $47 billion for a buyout of Genentech Inc.
Most recently, Express Scripts agreed to buy health insurer WellPoint Inc's prescription business for $4.68 billion.
The deal rush has sparked speculation of a further wave of consolidation in the sector, and investment bankers have said we are now likely to see smaller acquisitions valued from a few hundred million dollars up to about $20 billion.
Another person familiar with the matter told Reuters a month ago that Stiefel was considering selling itself and had asked Blackstone to seek offers for the business.
The source had told Reuters that Blackstone and the company's family owners were seeking a speedy sale.
(Reporting by Megan Davies and Jui Chakravorty Das; Editing by Lincoln Feast)

Sugar Crises in Pakistan

Sugar Prices increased to PKR 48/kg
A range of motives came in return to explicit increase in sugar prices but based on my analysis I would blame the cost of production in terms of higher price of sugarcane as the root cause which was mainly due to lesser sugar crops in recent reason. The current sugar price for Sindh is PKR 48/kg and PKR 49.75/kg for rest of the other cities for three months starting from the first of Ramadan. The GoP cut GST by 50% during this period and providing at PKR 38 per kilogram as subsidized sugar rate at all utility stores. It also put no restriction on the inter-provincial movement of sugar and wheat as well.
Sugar Cultivation is anticipated to lowered in FY10
The prices are expected to increase further as the sugar cultivation is anticipated to get down in FY10 at around 3 Million tons compare to 3.2 Million tons in FY09 and to offset this additional impact on sugar prices it’s essential to import the remaining amount of sugar i.e. 75,000 tons from 200,000 tons approved by ECC in February 2009 along with the additional 100,000 tons. The government should need to import at least this much amount of sugar so that it hold sufficient stocks to augment the existing stocks and maintain ‘strategic reserves’ to ensure price stability in the market.
TCP hold 240,000 tons of Sugar in their reserves
Currently, the TCP hold 240,000 tons of sugar in their reserves including 78,000 tons of imported sugar had arrived, 47,000 tons that was in pipeline, while 75 tons import was suspended.
Regardless of the GoP's crackdown against sugar hoarders to check simulated price hike ahead of Ramadan, the mills are still holding over 1 Million tons of sugar whereas as they are constantly claiming that they have only 600,000 – 700,000 tons of sugar stocks.
The banks have provided overall PKR 52 Billion financing to sugar mills for sugarcane crushing during FY09. However, mills have paid only PKR 23 Billion till July 2009 which is the 44% of total loan against the stocks of some 1.2 Million tons of sugar under pledged by the banks against financing of PKR 29 Billion.
The sugar industry requested to SBP to grant 3 months loan extension to the sugar mills for full retirement of outstanding loans and advances against sugar stocks and on July 15, 2009 SBP approved their request.
Furthermore, SBP instructed, that the loans and advances obtained by sugar mills would be retired in four equal phases, starting with 25% reduction at end of July, 2009. The remaining 25% would be by end of August, 2009, September, 2009 and by the end of October, 2009. In return to this extension the millers didn’t sell the pledged sugar in the open market so far.
GoP needs to price the sugarcane for its sucrose
The 'price' to 'weight' the crop is caused to be uncompetitive as the growers producing high sucrose content get the same price as those with low. The research and agriculture department should need to make such policies which consider the sucrose content of the sugarcane rather its weight. Being amongst the top five countries in the world in terms of area covered by sugarcane crop, the GoP should also need to build up a long term policy for sugarcane.