profitepaper pakistantoday 02nd December, 2012

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Sunday, 2 December, 2012

Pak-US BIT seal delayed Financial, security issues main impediment ISLAMABAD ONLINE

The much-needed seal of Bilateral investment Treaty (BiT) between Pakistan and the United states (Us) has been delayed due to financial and defence related issues which were yet to be work out, sources say.

The seal was earlier expected to be signed during on going financial year 2012-13 but now it has been delayed for unspecific period. a high level official of Board of investment (BOi) told this agency that international agreements were not taken place over night as it was time taking process which may take decades.

“Pakistan does not seem that the Bilateral investment Treaty between both countries could be sealed during current financial year 2012-13 as there were many financial and defence related issues which were yet to be sort out,” said the official.

Talks on BiT started in 2004 and continued until 2006 but many issues remained unresolved. The biggest stumbling block was arbitration rules in case of any dispute. after a five-year deadlock, the BOi took the initiative to restart the negotiation process in 2011. according to the BOi, consultation with local stakeholders also picked up momentum to firm up Pakistan’s position on different issues.

‘The euro is a currency with a state’ European Central Bank policymaker Benoit Coeure urged euro zone governments to forge a closer political union, arguing ‘the euro is a currency with a state’ whose branches of government need more clearly defining PARIS AGENCIES

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raising the deal reached earlier this week to reduce greece's debt burden as an unprecedented commitment by euro zone governments to keep the crisiswracked state within the single currency, Coeure told an economic forum in Paris there needed to be closer political coordination to manage crises.

"The notion that the euro is a currency without a state is in my view misguided," he said. "The euro is a currency with a state - but it's a state whose branches of government are not yet clearly defined."

Commenting on possible steps in the right direction, Coeure said he supported the idea of a single euro-

zone Treasury and eventually common euro bonds.

He insisted that for its part, the ECB would do everything within its mandate "to ensure price stability in the euro area and therefore trust in the euro as a currency," he said. greece's international lenders on Monday agreed on a package of measures to reduce greek debt by 40 billion euros, cutting it to 124 percent of gross domestic product by 2020. although the technical details have yet to be finalized, Coeure said, he pointed out this was the first time finance ministers had jointly committed to keeping greece in the euro.

Commenting on the ECB's own measures to prevent the euro zone falling apart, Coeure highlighted the central bank's new bond-purchase pro-

gram, dubbed Outright Monetary Transactions (OMT).

OMTs aim "to price out a type of catastrophic risk premium that investors demand in conditions of market paralysis," Coeure said in the text of a speech for delivery at the forum.

"it was breakdown risk in the early stage of the crisis, the risk that the payments system would seize up completely. it is break-up risk now," he added.

Wall Street ends flat as ‘fiscal cliff’ focus lingers The S&P 500 wrapped up its fifth positive month in the last six on Friday, although it ended the day flat as politicians remain at odds about how to avoid the so-called fiscal cliff NEW YORK AGENCIES

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rading has been choppy in the last two weeks as investors react to statements from policymakers on the state of discussions on how to avert a series of tax hikes and spending cuts that could pull the economy back into recession.

The s&P 500 was up 0.29 percent in november even as it suffered a slide of more than 6 percent from the month's high to its low. "given the 'on again, off again' fiscal cliff (negotiations), it's rather surprising how resilient this market has been," said david rolfe, chief investment officer at st. Louis-based Wedgewood Partners.

"Between now and the end of the year, there's going to be an information vacuum outside the fiscal cliff, and i believe that resiliency will be tested." in contrast to the apparent calm in equities, the CBOE Volatility index .ViX, a gauge of market anxiety, jumped 5.4 percent, its largest daily gain in two weeks.

The ViX also rose for the week, but posted a whopping 14.7 percent decline for november.

On Friday, President Barack Obama accused a "handful of republicans" in the U.s. House of representatives of holding up legislation to extend tax cuts for middle-class americans in order to try to preserve them for the wealthy. speaking shortly after the president, House speaker John Boehner, an Ohio republican, said: "There is a stalemate; let's not kid ourselves." despite the divisive language, many market participants are betting that a deal will be struck - if only at the eleventh hour.

Corporations continue to react to what is expected to be a harsher tax regime next year. Whole Foods Market (WFM.O) was the latest to announce a special cash dividend - of $2.00 per share in this case - ahead of expected higher tax rates in 2013.

The dow Jones industrial average .dJi rose 3.76 points, or 0.03 percent,

to 13,025.58 at the close. The s&P 500 .sPX gained a mere 0.23 of a point, or 0.02 percent, to finish at 1,416.18. But the nasdaq Composite index .iXiC dipped 1.79 points, or 0.06 percent, to end at 3,010.24.

For the month of november, the s&P 500 rose 0.29 percent, its smallest monthly variation since March 2011.

The dow fell 0.5 percent and the nasdaq gained 1.1 percent.

For the week, though, all three major U.s. stock indexes advanced, with the dow up 0.1 percent, the s&P 500 up 0.5 percent and the nasdaq up 1.5 percent.

Verisign (Vrsn.O) shares dropped 13.2 percent to $34.15 after the com-

pany said the U.s. department of Commerce approved its agreement with iCann to run the .com internet registry, but Verisign won't be able to raise prices as it did before.

Yum Brands (YUM.n) slid 9.9 percent to $67.08 a day after the parent of the KFC, Taco Bell and Pizza Hut chains said it expects a drop in fourthquarter sales at established restaurants in China. after a close relationship for several years, Facebook (FB.O) and Zynga (Znga.O) revised terms of a partnership agreement, according to regulatory filings on Thursday. Under the new pact, Zynga, creator of the "Farmville" game, will have limited ability to promote its site on Facebook.

Zynga's stock fell 6.1 percent to $2.46. Facebook's stock gained 2.5 percent to $28. apple inc's (aaPL.O) latest iPhone received final clearance from Chinese regulators, paving the way for a december debut in a highly competitive market where the lack of a new model had severely eroded its share of product sales. apple's stock fell 0.7 percent to $585.28.

The markets' reaction to data on Friday was muted.

U.s. consumer spending fell in October for the first time in five months and income growth stalled, leading some economists to cut already weak estimates of fourth-quarter economic growth. slightly more than 7 billion shares changed hands on the new York stock Exchange, the nasdaq and nYsE MKT, more than the daily average so far this year of about 6.48 billion shares and the largest in two weeks.

On the nYsE, roughly six issues rose for every five that fell, while on nasdaq, the ratio was nearly 1 to 1.

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Business 02

US deadlock, data cap global stocks; euro gains

PIA Hajj Operation 2012 successfully Major stock market indexes closed little changed and Treasury yields culminates slipped on Friday as concern about the stalemate in crucial US.budget

talks added to worries about slowing economic growth in the world's largest economy, though the euro rose on the European outlook NEW YORK AGENCIES

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HE euro fell to session lows against the dollar after data on U.s. consumer spending and income fell short of expectations, though it later recovered as investors focused on a better outlook for Europe after a deal between greece and international lenders earlier in the week. President Barack Obama accused a "handful of republicans" in the House of representatives on Friday of holding up legislation to extend tax cuts for middle-class americans in order to try to preserve them for the wealthy.

"There is a stalemate; let's not kid ourselves," House speaker John Boehner said on Friday, a month before the $600 billion "fiscal cliff" of tax hikes and spending cuts is set to kick in. His comments caused the euro to trim some gains. "Washington brinkmanship and a delay in reaching an agreement on the 'fiscal cliff' are likely to rattle markets. These risks and uncertainties are likely to keep markets volatile," said John Praveen, chief investment strategist at Prudential international investments advisers LLC. The dow Jones industrial average .dJi closed up 3.76 points, or 0.03 percent, at 13,025.58. The standard & Poor's 500 index .sPX was up 0.23 points, or 0.02 percent, at 1,416.18. The nasdaq Composite index .iXiC was down 1.79 points, or 0.06 percent, at 3,010.24. The benchmark 10-year U.s. Treasury note was up 1/32, the yield at 1.6147 percent. a private report on business activity in the Chicago area in november matched economists' forecasts, portending moderate growth for the U.s. economy. "These numbers were soft," said ryan sweet, senior economist with Moody's analytics, shortly after the consumer spending data was released. "it's a sign that consumers are cautious. They are tightening their purse strings with the jobs market taking a step back. The 'fiscal cliff' will likely hit spending later even though it's not in the forefront of consumers' minds."

WORLD, EUROPEAN STOCKS SLIP: World and European stock indexes were also capped by U.s. uncertainty. The MsCi world equity index .MiWd00000PUs rose less than 0.1 percent to 332.58, though it was still near its highest level for november, having added almost 1 percent on Thursday. The FTsEurofirst 300 index .FTEU3 of top European shares slipped 0.2 percent to 1,119.36, following Thursday's 1.1 percent gain, which took it to a four-month closing high. .EU .L still, European shares are on course for their best

month since august and a sixth straight monthly gain as sentiment over the outlook for Europe has improved since a deal was reached on aid to greece earlier this week.

Those signs have also helped the euro, which was up 0.2 percent against the dollar to $1.3005 after climbing to a five-week high. The single currency touched a sevenmonth high against the yen. strong demand at an italian bond auction this week, which cut rome's borrowing costs to a two-year low, and falls in spanish bond yields have encouraged investors to return to European assets. spanish and italian 10-year bond yields were stable at 5.268 percent and 4.484 percent respectively, well below their peak in July, when spain's debt yielded more than 6 percent.

BRAZIL WEAKNESS: But elsewhere, the economic outlook was not so buoyant. Brazil's economy posted extremely disappointing growth in the third quarter, increasing pressure on President dilma rousseff to make deeper structural reforms and adding to fears that big emerging markets are getting dragged into the stagnation of the global economy. The U.s. dollar rose 1.3 percent against the real. Canada's economy lost some fizz in the third quarter as exports recorded their biggest drop in three years and businesses scaled back investments, though the slowdown is u n -

likely to knock the Bank of Canada off its rate-hike stance. The dollar was little changed against the Canadian dollar. The U.s. fiscal crisis remains a focus in oil markets due to its potential impact on demand from the world's biggest consumer. Crude was up ahead of the weekend. Brent crude rose 0.3 percent to $111.09 a barrel, while U.s. crude rose 0.8 percent to $88.83 a barrel. "no significant progress seems to have been made in the U.s. budgetary dispute, which has led to profit-taking, especially since oil is trading at the upper end of its trading corridor," said Commerzbank oil analyst Carsten Fritsch. gold fell to $1,714.14 an ounce, buffeted by uncertainty over the U.s. budget crisis.

Hanging onto the cliff Little apparent progress in ‘fiscal cliff’ talks HATFIELD AGENCIES

With barely a month left before the "fiscal cliff," republicans and democrats remained far apart on Friday in talks to avoid the across-the-board tax hikes and spending cuts that threaten to throw the country back into recession. While President Barack Obama visited a Pennsylvania toy factory to muster public support for tax hikes on the rich, portraying republicans as scrooges at Christmas time, his primary adversary in negotiations, republican House speaker John Boehner, continued to describe the situation as a stalemate. The argument will resume on sunday when Boehner, along with Obama's Treasury secretary, Timothy geithner, and others, take to weekly political talk shows and pick up further steam next week with a possible confrontation in the House of representatives between democrats and republicans over the timing of a vote on tax hikes. Lawmakers are nervously eyeing the markets as the deadline approaches, with gyrations likely to intensify pressure to bring the drama to a close. The markets, in turn watching the politicians, fell as Boehner spoke, but recovered afterward. it was a repeat of the pattern earlier in the week when the speaker offered a similarly gloomy assessment.

LAHORE STAFF REPORT

Pia Hajj Operation 2012 completed successfully with 85 percent post hajj flights from Jeddah arriving on time. Last Hajj Flight PK-3662 arrived in Quetta early Friday morning.

Pia has brought back about 100,000 Hajjis to Pakistan.

Pia has carried 83000 Hujjaj through 196 flights to Pakistan. 1989 Hajjis were flown back to rangoon by 4 Chartered flights while over 15000 Hajjis travelled through schedule flights.

The airline’s 21 hajj flights brought back 10353 hajjis to Karachi, 17385 through 35 flights to islamabad, 16783 through 34 flights to Lahore and 13,973 Hajjis to Peshawar through 43 post hajj flights.Pia carried back 13275 hajjis to Quetta by 41 Post-Hajj flights, 7,006 Hajjis to Multan by 14 flights and 3,491 Hajjis to sialkot by 07 Post-Hajj Flights.

Md Pia Muhammad Junaid Yunus said that overcrowding at Jeddah Hajj Terminal where 80,000 to 100,000 passengers arrive at the same time for their return journey to other countries through 74 different international airlines cause’s initial delays in departures of flights due to security checks, immigration formalities etc. Besides, as per saudi law an airline may be penalized and is not allowed to take off without the booked flight passenger. Md Pia appreciated the airline employees for the success of smooth travel arrangements for about 100,000 Hujjaj without any major problem through sheer team work in this mega operation. it was made possible only because of the dedication and whole-heartedly efforts by each member of the team to make this operation a success. He congratulated the employees on their success and for extra ordinary efforts during this entire operation day and night.

German investment moot to be held in June 2013 KARACHI STAFF REPORT

a german investment Conference is to be held in June 2013 in Pakistan with the collaboration of the german embassy and PgBF (Pakistan german Business Forum). This was said by german Consul general in Karachi dr Tilo Klinner in his visit to the Karachi office of the german corporation, ds-Concept Pakistan.

The german envoy held discussions with ds Concept country head Mr Qaseem Jaffri regarding some suggestions and solutions proposed to encourage Pakistani exporters. in the best possible manner in the worst financial conditions.

The meeting was organized by ds-Concept Pakistan at their office premises to strengthen the brotherly ties between germany and Pakistan as well as to escalate the business affairs concerning the two countries.

He appreciated ds-Concept Pakistan for

its hard work and success in Pakistan and said this was yet another example of a german company in the finance sector that had grown from its inception to a leading position in Pakistan by following german principles of business ethics and maintaining international standards.

He further said the operations of ds-Concept reflect the interest of german investors to contribute in the development of Pakistan’s economy. some ds-Concept Pakistan customers present in the meeting, shared their experiences of working with the only financial company of its type in the country. also present on the occasion were President PgBF Mr saifuddinZoomkawala and Vice President FPCCi (Federation of Pakistan Chamber of Commerce and industry) Begum salma ahmed. Mr. Faisal akram (CEO, Pakland Corporation) and Mr. sheikh Kaiser Waheed (CEO, Medisure Pharma) appreciated the services of ds-Concept.

Saving Greece in Germany's interest: Merkel BERLIN: rescuing greece from economic collapse is in germany's best interests, Chancellor angela Merkel told sunday's edition of the Bild newspaper, after german lawmakers approved billions of euros in international aid for athens.

Helping greece is "in germany's interests because measures are always taken with all of the euro zone in mind for the benefit of all members, including germany," she told the newspaper.

"Obviously, i feel the scepticism of a lof of fellow citizens and i also understand this in part, because greece has often disappointed its partners in the past years. a lot of things that were promised by the greek government were not delivered," she said.

But "i am finally seeing a determination in the greek government to reorganise the country from top to bot-

tom and to give it a modern structure. germany will help with advice and actions," she added.

Merkel on Friday secured the vote from german lawmakers to release 43.7 billion euros ($56.9 billion) in aid to debt-wracked greece agreed after tortuous talks between eurozone finance ministers. in all, 473 deputies were in favour, with 100 against and 11 abstentions. Merkel said the economy was "50 percent psychology" and said it was important not to rehash doomsday scenarios but to support greece's gradual economic recovery. "i will continue to do what is best for germany and Europe, which is limiting the financial consequences and never taking unmanageable risks," she said, adding she would work with "all (her) strength to stabilise and reinforce the euro." AGENCIES

Sunday, 2 December, 2012