PRO 03-08-2012_Layout 1 8/4/2012 4:57 AM Page 1
Saturday, 4 August, 2012
Asian markets hit by ECB disappointment HONG KONG APP/AFP
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SIAN markets retreated and the euro came back under pressure on Friday after the European Central Bank dashed traders' hopes for strong policy actions to support troubled eurozone economies. Downbeat earnings reports from two of Japan's biggest electronics firms also weighed on the Nikkei, with Sharp losing more than a quarter of its value in the morning session. Tokyo was 1.62 percent lower by the break, Hong Kong shed 1.17 percent, Sydney fell 0.97 percent and Seoul eased 0.82 percent while Shanghai was flat. Markets were deflated by the ECB's decision to hold off any concrete moves to support the euro such as bond buying, which many had hoped for after bank chief Mario Draghi said last week it would do whatever was needed to save the euro. On Thursday he reiterated that the ECB was ready to step into the bond markets -- but not just yet. In face of growing pressure, the ECB "may undertake outright open market operations of a size adequate to reach its objective," he said, but added that the details would be worked out "in the coming weeks". Whatever the circumstances, Draghi said it was "pointless" to bet against the euro. "It stays. It stays. It stays," he insisted. However investors, who had sent global markets surging over the past week as they factored in some sort of action, were unimpressed and Spanish borrowing costs bounced back above the
Not another LPG price hike! Producers raise price by Rs 19 per kg g
KARACHI APP
Local producers of liquefied petroleum gas (LPG) have increased prices by Rs 19,000 per ton in accordance to a rise in its international prices (Saudi Armaco Contract Price). This was stated by the pattern in chief of All Pakistan LPG Distributors Association Abdul Hadi Khan here Friday. New prices are effective from August 3, 2012. He said per kilogram price of LPG has been raised by Rs 19 while 11.8 kg cylinder has been increased by Rs 224 and price of 45.4 kg cylinder went up by Rs 863. Hadi said that in Karachi, LPG will be sold at Rs 118 per kilo, 11.8 kg cylinder at Rs 126 and 45.4 kg cylinder at Rs 4,720. In Lahore, the price of LPG will be Rs 123 per kg, 11.8 kg cylinder at Rs 1326 and 45.4 kg cylinder at Rs 5,100. Similarly, in Khyber Pukhtoonkhwa, LPG will be available at Rs 128 per kg, 11.8 kg cylinder at Rs 1448 and 45.5 kg cylinder at Rs 5,514. In norther areas, Mansehra, FATA, Batgram and AJK, price of LPG will be Rs 132 per kilo, 11.8 kg cylinder at Rs 1530 and 45.4 kg cylinder at Rs 5,877. Hadi alleged that demand for LPG has surged to 1700 tons per day, but producers have kept their production at 800 tons per day for the last one and a half year. There is a need to increase LPG production in the country on the one hand and reduce its prices on the other. He feared that LPG sale will decline by 15 percent in the country due to this rise and affect the growth of this industry. This is also discouraging the investment of billions of rupees in LPG sector, he added.
seven percent danger level. "The delay in actions may last until the next ECB meeting (September 6)," said Anthony Lam, strategist at Credit Agricole. "In the meantime, a downbeat mood will continue hanging over the market." The let-down came after the US Federal Reserve had said on Wednesday that it would take a wait-and-see approach before unveiling any stimulus for the world's number one economy. The news rippled around global markets, with London losing 0.88 percent, Frankfurt 2.20 percent off and Paris 2.68 percent lower while Madrid shares plunged 5.16 percent and Milan was 4.64 percent off. On Wall Street the Dow fell 0.71 percent, the Nasdaq lost 0.36 percent and the S&P 500 dropped 0.74 percent. In foreign exchange trade the euro, which tumbled after the ECB announcement, remained under pressure in Tokyo as investors moved out of riskier assets and into safer bets such as the yen and dollar. The common unit bought $1.2176 and 95.27 yen in early trade, compared with $1.2178 and 95.26 yen in New York late Thursday. It was significantly down from the $1.2250 and 96.12 earlier in Asia before the ECB meeting. The dollar was at at 78.15 yen from 78.22 yen. In Tokyo Sharp shed 30 percent a day after it said losses in the first quarter to June almost trebled from last year as it struggles with the strong yen and weak demand in the key European market. Sony also lost around eight percent after reporting its quarterly loss had
widened while also cutting its full-year profit forecast. However, oil prices were higher. New York's main contract, light
sweet crude for September delivery advanced 35 cents to $87.48 a barrel and Brent North Sea crude for September
Bring on the chainsaw! SBP asked to slash key Policy Rate ISLAMABAD APP
The Islamabad Chamber of Commerce and Industry (ICCI) Friday urged the State Bank of Pakistan (SBP) to reduce markup rate by 150 to 200 basis points in the monetary policy scheduled to be announced on August 10. "The decision to cut markup rate to single digit is essential for reviving the business activities, overcome lowgrowth scenario, encourage new investments which would ultimately improve the economic growth of the country," ICCI President, Yassar Sakhi Butt said in a statement. He was of the view that maintaining mark-up at 12 percent by State Bank of Pakistan would further fuel the non-performing loans and unemployment in private sector. He said that the availability of cheaper money to the business doing people is
must to bring down the cost of business in Pakistan as the trade and industry were already facing huge losses on present level due to high cost of energy and its crisis in the country. He said reduction in bank mark-up rate could encourage fresh investment in the industry which had declined to 13.4 percent in FY11, thus reduction in markup rate would increase employment and exports of the country in long-term. He was citing the example of China, where mark-up rate was 6.56 percent, India 8 percent, Sri Lanka 7.75 percent and in Bangladesh 7.75 percent against 12 percent in Pakistan. ICCI President said that the economic meltdown in recent years had already proved that high policy rate had caused a great harm to economy and would continue to widen the fiscal deficit.
delivery was 32 cents higher at $106.22. Gold was at $1,590.80 at 0300 GMT, from $1,602.40 on Thursday.
We need gas! Textile exporters urge govt to import gas g
FAISALABAD AGENCIES
Pakistan Textile Exporters Association (PTEA) and the Pakistan Hosiery Manufacturers Association (PHMA) urged the government here on Friday to import gas to bridge the expected supply gap. This was demanded in a joint meeting of PTEA and PHMA held under the chairmanship of Rana Arif Touseef, President PTEA. They said that a regular and efficient supply of gas was vital for the textile industry as processing, printing and finishing of the fabric depended on gas heating. Gas is also an alternative energy source for the industry in the shortage of electricity and vital base of production, they said. Former Federal Minister and former chairman PTEA, Ch Mushtaq Cheema, Vice chairman Pakistan Hosiery Manufacturers Association Qamar Aftab, Former Chairman PHMA Dr Khurram Tariq and a large number of textile exporters were also present on the occasion.
Takaful rules 2012, an opportunity for insurance under Shariah LAHORE AGENCIES
Conventional insurance companies can open window operations of Takaful by taking benefit from Takaful rules 2012, announced by Securities and Exchange Commission of Pakistan (SECP). The Takaful industry will progress rapidly at national level under thee rules, said Muhammad Zubair Mughal, Chief Executive Officer of AlHuda Centre of Islamic Banking and Economics, while talking to APP on Friday. He declared the Takaful Rules 2012 a good step for the industry which would promote the industry rapidly at
national level and the masses would have an opportunity to fulfill their insurance needs under Shariah. "In Pakistan, due to elements of interest and gambling in insurance, people avoid insurance. The Pakistan Takaful industry entered into a new era and the insurance industry will grow rapidly by SECP Takaful Rules 2012," Zubair said. "The Takaful industry is growing rapidly around the world with 230 companies and 13 re-Takaful companies with a total volume of $11 billion," he added. Takaful was started in 2005 in Pakistan when SECP introduced Takaful
Rules 2005 according to which only fullfledged Takaful companies had the permission to operate in this regard, five Takaful companies came into being due to efforts of investors of Malaysia, Qatar, Kuwait, UAE, Saudi Arabia and Pakistan. Among the five companies, three are general whereas two are providing services of Shariah compliance life insurance. Analyzing the insurance industry, he said that there were 37 general insurance companies, seven life insurance companies; five Takaful and re-Takaful companies are operating in Pakistan and now in accordance with the Takaful
Rules 2012, more than 40 insurance companies can start a window operation by fulfilling SECP laws and conventional insurance companies can be transformed into Takaful companies. He said that there were three types of business opportunities for the industry: 1 people, who do not use insurance due to interest factor; 2 people who use insurance by compulsion but they can come to Islamic insurance when this alternative is introduced; and 3 people who do not fall under the category of insurance as in Pakistan, the penetration of insurance is less than 1 percent. These rules are a milestone in the Pakistan insurance industry, he added.
PRO 03-08-2012_Layout 1 8/4/2012 4:57 AM Page 2
02 Business
Typical bear comeback Bears end bull parade amid SBP policy apprehension as KSE sheds 54 points KARACHI STAFF REPORT
HE Karachi Stock Exchange’s (KSE) benchmark 100-share index on Friday fell by 0.37 percent the Pakistan Stocks closed lower on institutional profittaking in the earnings announcements session at KSE amid cautious activity ahead of SBP Policy announcement due next week. This was viewed by Ahsan Mehanti, Director at Arif Habib Investments Limited. The benchmark KSE 100-share Index declined by 54.24 points, or 0.37 percent, to 14, 676.43 points. The index moved both sides of the fence by 73.62 points, making an intra-day high of 14, 732.87 points and a low of 14, 659.25 points. The KSE 30-share index dropped 69.16 points, or 0.54 percent, to 12, 650.70 points. Mehanti observed that the activity remained thin despite strong corporate earnings outlook and recovery in
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global stocks and commodities. Stocks that played a major role in driving the benchmark index down were D.G.Khan Cement, Maple Leaf Cement, Bank Al-Falah, Hub Power Company, Karachi Electricity Supply Corporation K.E.S.C, Engro Corporation, Jahangir Siddiqui Company, Fauji Fertilizer and Fauji Cement. A total of 142 companies’ stocks closed under selling pressure out of total 252
companies’ stocks that were active on the board. However, stocks of 96 companies managed to close in positive territory while 14 companies’ stocks closed unchanged. He added that the concerns for rising circular debt in Pakistan Energy sector, revenue loss to fertilizer sector on gas supply worries and pending CGT collection issues played a catalyst role in bearish sentiment at KSE. Moreover, about half a
Facebook shares dive as deadline for insider sales nears SAN FRANCISCO AGENCIES
Facebook shares crumbled again on Thursday, sending the once-feverishly sought-after name below $20 for the first time as investors scrambled to get out of the way of a potential share deluge in coming weeks. Thursday marked a five-day losing streak for the stock. Facebook has shed almost $50 billion in value since its debut --more than the total valuation of Hewlett-Packard Co or Starbucks Corp. The stock debuted at $38 and has headed south since, pummeled by growing doubts about its lofty valuation, growth prospects, high-profile departures. Now, investors are struggling to understand the impact of the expiry on Aug. 16 of a lockup period on insiders' sales. That's when the first restrictions barring employees and early investors from selling goes away, opening a spigot to roughly 1.88 billion additional shares for trading by year's end. Some investors said the stock's downward slide may actually lessen the deadline's impact as insiders opt to wait. But at the very least, doubts about Facebook's business permeating Wall Street will keep the shares constrained for some time.
"Just because the lock-ups expire doesn't mean people are going to rush to the exits," said Topeka Capital Markets analyst Anthony Victor. But he saw little upside in the near term. Predicting whether Facebook insiders will sell their shares, even as the stock plumbs new lows, is a tricky. Most Facebook employees have restricted stock units -- considered a major draw in fast-growing Web powers' drive to attract top-flight talent but are given years to sell them. Unlike options which become worthless if a company's stock price falls below an option holder's "strike price," restricted stock units always provide a profit to the employee they were granted to - it just diminishes as the price declines. Many Silicon Valley employees count on big paydays when their company goes public: it could mean the chance to pay off hefty college loans, or a down-payment on a first home. One Facebook employee expects to sell a smaller portion of his stake in the company than he otherwise would have, given the drop in the stock price. "I will definitely take some. But my debate is how much," said the employee, who asked to remain anonymous.
Not good enough! g
IMF says not enough done to stop spread of euro zone crisis WASHINGTON AGENCIES
The International Monetary Fund on Thursday called for a "policy game changer" in the euro zone to arrest the spread of the debt crisis it now says is clearly engulfing the entire currency bloc and its smaller neighbors. An IMF spillover report that looks at how the economic policies of the so-called systemic five economies - the United States, China, euro zone, Japan and the United Kingdom – affect each other and the rest of the world said the euro area crisis was by far the biggest concern weighing on policymakers' minds. The IMF said it had consulted 35 countries for the report including select number of emerging economies Brazil, Czech Republic, India, South Africa, Turkey, Russia, South Korea, Poland, Mexico and Saudi Arabia. "Despite progress in the face of constraints, the sense is that not enough has been done to stop the spread of stresses and at-
tenuate fiscal-growth-banking feedback loops," the IMF said of the euro zone's policy actions so far. In a worst-case scenario simulated by the IMF, it found that euro zone output could be cut by five percentage points if policymakers did not act and the euro zone crisis worsened. If the euro zone crisis intensified, the IMF estimated that the impact to the world's poorest countries would be somewhere between mild to severe, and could push up their external financing needs by some $27 billion by the end of 2013. But the IMF said the euro zone was not the only global worry. Weighing possible spillovers elsewhere, the IMF also said the United States must remove the threat of a socalled "fiscal cliff" in 2013, with $4 trillion worth of expiring tax cuts and automatic government spending reductions next year, and not enough fiscal adjustments over the medium term. Most analysts believe that Congress will not act until after the congressional and presidential elections in November.
Major Gainers COMPANY UniLever Pak Colgate Palmolive Mithchells Fruit Siemens Pakistan Exide (PAK) XD
OPEN 8300.00 1309.00 347.76 796.44 194.96
HIGH 8624.00 1348.99 364.95 836.26 204.70
LOW 8400.00 1244.00 331.50 807.00 204.70
CLOSE CHANGE 8444.80 144.80 1328.99 19.99 364.95 17.19 811.00 14.56 204.70 9.74
TURNOVER 140 500 2,600 350 17,200
272.00 142.50 100.75 91.50 66.10
259.88 142.50 96.60 88.50 66.00
262.02 142.50 97.38 88.84 66.00
-10.72 -7.50 -3.69 -3.30 -3.00
1,000 200 104,500 2,360,900 1,500
46.95 7.00 18.45 46.20 3.95
46.21 6.51 17.80 45.10 3.60
46.63 6.62 17.95 46.08 3.75
-0.13 -0.20 -0.47 0.91 -0.19
5,354,500 3,860,500 3,333,500 3,176,500 2,681,500
Major Losers
dozen stocks closed with over four percent decline in their share prices in the session. Turnover decreased to 48.437 million shares from 102.963 million shares traded in the previous session. Turnover in futures market down to 4.791 million shares from 7.503 million shares traded a day earlier. Market capitalization declined to Rs3.746 trillion from 3.760 trillion. DG Khan Cement was the turnover leader with 5.354 million shares and it closed at Rs46.63. It was followed by Maple Leaf Cement with turnover 3.860 million shares and it closed at Rs 6.62. Bank Al-Falah with turnover 3.333 million shares and it closed at Rs17.95. Hub Power Company was on the fourth position with 3.176 million shares turnover and it closed at Rs46.08. The UniLever Pakistan and Colgate Palmolive, up Rs 144.80 and Rs 19.99, led highest price gainers while, Shezan Inter and Pak Services, down Rs 10.72and Rs 7.50 respectively, led the losers.
Euro stays weak in Asia after ECB disappointment TOKYO: The euro stayed bearish against other currencies in Asia trade Friday after taking a hit from the European Central Bank's announcement of no immediate measures to fight the debt crisis. The euro bought $1.2174 and 95.12 yen in Tokyo morning trade, compared with $1.2178 and 95.26 yen in New York late Thursday. The dollar was also flat at 78.22 yen. The euro tumbled Thursday after the head of the European Central Bank (ECB), Mario Draghi, announced no immediate measures to ease debt pressures in the eurozone and only the bank "may" resume bond purchases. The markets had wanted more from him after he raised expectations last week by saying the bank would do "whatever it takes" to preserve the embattled single currency. AGENCIES
Shezan Inter. Pak Services Pak Suzuki Motor Engro Corporation Cyan Limited
272.74 150.00 101.07 92.14 69.00
Volume Leaders D.G.K.Cement Maple Leaf Cement Bank Al-Falah Hub Power Com K.E.S.C.
46.76 6.82 18.42 45.17 3.94
Interbank Rates US Dollar UK Pound Japanese Yen Euro
94.4193 146.7465 1.2057 115.9280
Dollar East BUY US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
SELL
94.30 116.04 146.75 1.1916 93.81 12.00 25.63 25.13 98.84
95.10 116.91 147.82 1.2002 94.99 12.16 25.79 25.24 101.01
CORPORATE CORNER 2018 forecast for research performance shows Pakistan in top 30 countries ISLAMABAD: An international forecast for research output has shown that Pakistan will be among top 30 countries of the world. Scimago, an independent research organization and an international evaluation and ranking platform, has projected in its recent publication how the world will perform in research by 2018 based on their past performance. The top 50 countries are included in the forecast. China, as expected, becomes the number one country in the world by 2018 in terms of research output, however three countries which stand out and show the most drastic increase in numbers and rankings are Iran, Malaysia and Pakistan. Iran moves ahead from number 19 to number 4, Malaysia from 30 to 13, and Pakistan from 43 to 27. The expected output of research in Pakistan moving up 16 notches, which is the second highest increase worldwide, is primarily due to the innovative higher education policies and reforms taking place in Pakistan under the Higher Education Commission (HEC). PR
Apple asks for verdict after Samsung ‘misconduct’ SAN FRANCISCO AGENCIES
With a major patent trial barely underway, Apple has asked a judge to rule against Samsung, saying lawyers for the South Korean firm improperly disclosed information excluded in court in a bid to sway jurors. An Apple court document released Thursday said Samsung issued a statement to the press with data excluded from the trial, which began in San Jose Monday on patent infringement over smartphones and tablet computers. "Apple seeks a finding that Samsung and its counsel have engaged in bad faith litigation misconduct by attempting to prejudice the jury," the motion to Judge Lucy Koh said. "Samsung apparently believes that it is above the law, and that it -- not this court -- should decide what evidence the jury should see." According to court documents, Samsung provided media with a statement Tuesday expressing displeasure with the judge's exclusion of evidence. "Samsung was not allowed to tell the jury the full story and show the pre-iPhone design... in development at Samsung in 2006, before the iPhone," said the state-
ment from the South Korean firm. "The excluded evidence would have established beyond doubt that Samsung did not copy the iPhone design. Fundamental Fairness requires that the jury decide the case based on all the evidence." Apple said in its motion that releasing the
statement represented "misconduct" because it could influence the jury. "Samsung already has been sanctioned four times in this case for discovery abuses," Apple's motion said. "Most recently, Samsung was sanc-
tioned for destroying evidence. Litigation misconduct is apparently a part of Samsung's litigation strategy -- and limited sanctions have not deterred Samsung from such misconduct." Apple said it would not request a mistrial but instead ask the judge to rule in the case. "It is fully within the court's authority to order judgment in Apple's favor as a sanction for this misconduct," it said, adding the judge may also "instruct the jury that Samsung engaged in serious misconduct." Apple's senior vice president of worldwide marketing, Philip Schiller, was to be on the stand when the trial resumes Friday. Jurors on Tuesday began hearing the biggest US patent trial in decades, with billions at stake for the tech giants. Apple is seeking more than $2.5 billion in a case accusing the South Korean firm of infringing on designs and other patents from the iPhone and iPad maker. This is one of several cases in courts around the world involving the two electronics giants in the hottest part of the tech sector -- tablet computers and smartphones. While the results so far have been mixed in courts in Europe and Australia, Samsung is clearly on the defensive in the US case.
Saturday, 4 August, 2012