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Monday, 6 August, 2012
Dear govt,
Please control those darn thieves
Yours poorly, LCCI
ICCI welcomes US assistance to support Pakistan energy Sector
LCCI urges govt to control line losses, electricity theft LAHORE
T
NNI
he Lahore Chamber of Commerce and Industry Saturday urged the government to control line losses, electricity theft, inefficiency in recovery of dues and help stop political interference in energy sector that has reduced the country’s economic growth by 3-4 per cent in the last two years. In a statement issued here, the LCCI President Irfan Qaiser Sheikh said that the US report about the political interference in the energy sector is an eye-opener for all as it is not only the economy that has been facing a meltdown-like situation but the entire country is in grip of multiple challenges due to an acute energy shortage. The LCCI President said that there is no second opinion about it that effective governance is critical to economic reforms but if the political interference continues to undermine the decision-making then how one can expect an economic turnaround in coming years. Irfan Qaiser Sheikh said that the Lahore Chamber of Commerce and Industry has been calling on the government since long for now for the introduction of much needed reforms in the energy sector but unfortunately all its appeals had fell on deaf ears with the result of huge cut in country’s economic growth. he said that 3-4 per cent cut in economic growth means fewer job opportunities and little local, foreign Investment. The foreign investors generally take cue from local investors. If local businessmen are putting their stake in new ventures, the foreigners will also follow the suite but unfortunately in Pakistan both local and foreign investments have registered drastic decline. The LCCI President said that if the government does not implement fundamental reforms in near future, the energy situation could aggravate further creating more serious chal-
Uncle Sam cheers ICCI up
sector as it meant to increase energy production as well as improve electricity distribution, would expected to add 900 megawatts to the national grid by 2013. he was of the view that releasing of funds for Pakistan’s energy sector would demonstrate a marked improvement in bilateral relations between Pakistan and the United States. Yassar Sakhi Butt said that energy shortages had hampered the pace of economic growth, therefore he also urged US investors to invest in the energy sector of Pakistan as our country needs a quantum jump in electricity and gas generation to bridge supply and demand gap. ICCI President said that US investors should also invest in wind energy because Pakistan has potentials of wind energy ranging from 10000 MW to 50000 MW but currently producing very small ISLAMABAD megawatts of power from this source APP due to lack of foreign investment in Islamabad Chamber of Commerce and wind energy sector. he said that delay Industry (ICCI) welcomed the decision in fulfillment of export consignments of United States Congress for releasing has become a matter of routine due to power outages but infrastructural $280 million to support Pakistan improvement in various dams because energy Sector. ICCI President Yassar of released funds by US would increase Sakhi Butt termed it as a positive step for the country’s crippling energy sector country’s energy resources and help power sector institutions more which could ultimately help in effectively meet the energy needs of overcoming the industries as well as household prevailing energy sector. ICCI President said that the crisis in the country, Government should also attract said a press release other foreign investors by giving issued on Saturday. them lucrative incentives to invest ICCI President said in energy projects in that these released Pakistan, aiming to bring funds would down expensive oil-based have a positive energy generation in the impact on the country. entire energy
lenges for the government. The LCCI President also invited the attention of the government towards Rs 160 billion line losses and electricity theft, Rs120 billion on account of inefficiency in recovery of bills in the last financial year. “The system suffered a huge loss of Rs160 billion in the last financial year just on account of electricity pilferage and transmission and distribution losses. “Peshawar electric Supply Company (PeSCO) braved an over Rs50 billion hit, which is one-third of total losses. These figures have been worked out as per the claims of the government, which is facing an average of 19.5 percent line losses.” Further, in the jurisdiction of PeSCO, the electricity theft ratio stands at 30 percent, hyderabad electric Supply Company at 19 percent, Sukkur electric Power Company at 25 percent, Quetta electric Power Company at 22 percent, whereas in the whole of Punjab electricity theft stood at two to three percent only but the province is facing maximum power cuts. It is unprecedented that over 14 hours load-shedding is being done in the urban areas of the province while about 18 hours power cuts in the rural areas that are unjustified and bound to destroy the provincial economy, the LCCI President said.
WALL STREET WEEK AHEAD NEW YORK AGENCIES
Positive momentum in the face of headwinds To borrow from ‘Star Wars,’ the Force is strong with this stock market
Despite a ho-hum earnings season and central banks’ disappointing hopes for aggressive economic stimulus this week, U.S. stocks held firm. After four days of losses, the benchmark Standard & Poor’s 500 index .INX.SPX rallied on Friday, finishing the week in the positive for a fourth straight time and reaching three-month highs. Sustaining momentum are valuations that make stocks attractively priced relative to other assets. To be sure, some corporate earnings have been impressive, especially in defensive stocks such as utilities. The trigger for stocks’ surge was the Labor Department report that U.S. employers added 163,000 jobs to their payrolls in July, the most in five months. however, the unemployment rate, based on a different government survey, edged up to 8.3 percent. ATTRACTIVE EQUITIES: “There’s still a fair amount of pessimism, but equities are so much more attractive than bonds that the dividend on Johnson & Johnson (JNJ.N), for example, offers a better yield than the company’s bonds,” said Bruce Zessar, managing director at Advisory Research in Chicago, which oversees about $9 billion. An investor would do better with the stock than the bond over the next ten years even if the stock price went nowhere because of the stock dividend, he said. Based on measures like dividends and
price-to-earnings ratios, equities appear cheap compared to other assets like Treasuries where yields on the 10-year note fell to a record low this past month. Stocks are the best house in a bad neighborhood. After the Federal Reserve and the european Central Bank didn’t take aggressive, immediate measures to spur growth, the market disappointment was fairly short-lived, considering how hotly the actions had been anticipated. The S&P fell about 0.7 percent on Thursday following the eCB’s comments compared with a nearly 2 percent rise before in anticipation of action. MOMENTUM “ON OUR SIDE”: “This indicates that there is near- and long-term momentum on our side, like Wall Street’s version of ‘May the force be with you,’” said Sam Stovall, chief investment strategist for Standard & Poor’s equity Research Services in New York. In another positive sign, large blocks of upside calls were apparently bought on Friday in an exchange traded fund designed to measure equity performance in the global emerging markets. The option flow in the iShares MSCI emerging Markets (eeM.P) fund “seems to express confidence that today’s global equity market rally can continue over the next seven weeks,” said WhatsTrading.com options strategist Frederic Ruffy. For the week, the Dow Jones industrial average .DJI rose 0.2 percent, the Nasdaq composite index.IXIC added 0.3 percent and the S&P rose 0.4 pct. It was a fourth straight week of gains for the Dow and S&P and
third for the Nasdaq. The S&P is up almost 9 percent from an early June bottom and is a mere 2 percent from its 2012 closing high. Much of that rise has come on gains in defensive sectors like telecommunications .GSPT, a sign that while investors aren’t ready to abandon stocks, they’re still looking to limit risk and volatility. Telecom shares are by far the strongest performers of the year, surging 18.6 percent, more than double the S&P’s 8.5 percent gain for the year. “It’s rare to see gains lead by defensives, but they offer such attractive yields from dividends that even though valuations are stretched, they’re likely to get stretched further,” said Brad Sorensen, director of market and sector analysis at Charles Schwab in Denver. In a sign of near-term momentum, 87.5 percent of telecom shares are trading over their 50-day moving average, according to data from Bespoke. Utilities .GSPU, another defensive group, has almost 98 percent of components above the moving average, compared to 71.8 percent of the S&P at large. This comes despite an earnings season marked by weak revenue growth and companies that are more negative about their outlooks than they have been 11 years. Still, more than two-thirds of S&P components have topped profit expectations thus far, according to Thomson Reuters data. Quarterly earnings due next week include Walt Disney Co (DIS.N), Priceline.com (PCLN.O) and Chesapeake energy (ChK.N). Results from Macy’s Inc (M.N) and J.C. Penney Co Inc (JCP.N) should shed light on the strength of consumer spending.
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Business 02 Apple’s Jobs was open to making a smaller iPad: executive Steve Jobs was receptive to Apple Inc making a smaller tablet, a senior executive said in a 2011 email revealed on Friday, fanning speculation it plans to make a mini-iPad to take on cheaper gadgets from Google Inc and Amazon. SAN JOSE
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AGENCIES
N Apple mini-version of the market-dominating 10inch iPad could counter increasing inroads made by tablets such as the Kindle Fire and Nexus 7. But the company has never confirmed the intensifying talk of such a launch. Vice President eddy Cue urged thenchief operating officer Tim Cook in January 2011 to build a 7-inch tablet, according to an email from Cue that Samsung electronics presented as evidence in a U.S. patent trial. In an email addressed also to software chief Scott Forstall and marketing head Phil Schiller, Cue said he believed there was a market for a 7-inch tablet and that “we should do one.”
Cue’s brief email was introduced on Friday as part of a high-wattage trial that will play out in a San Jose courtroom this summer and is expected to transfix the technology industry. “There will be a 7-inch market and we should do one. I expressed this to Steve several times since Thanksgiving and he seemed very receptive the last time,” the executive wrote in the email. “I found email, books, Facebook, and video very compelling on a 7-inch. Web browsing is definitely the weakest point, but still usable.” Cue had previously forwarded an article entitled “Why I just dumped the iPad (hint: size matters)”. he wrote: “having used a Samsung Galaxy, I tend to agree with many of the comments below (except actually moving off the iPad).” Apple and Samsung are going toe-to-
toe in a patents dispute mirroring a struggle for industry supremacy between two rivals that control more than half of worldwide smartphone sales. The U.S. company accuses Samsung of copying the design and some features of its iPad and iPhone, and is asking for billions of dollars in damages and a sales ban. The Korean firm, which is trying to expand in the U.S. market, says Apple infringed some of its key wireless technology patents. Cue, who rose to prominence overseeing the iTunes and Apps stores, became the company’s senior vice president of Internet software and services in September. his email was introduced by Samsung during a cross-examination of Forstall on Friday. In the email dated January 24, 2011, Cue said he had broached the idea of a smaller tablet to Jobs several times since Thanksgiving, and the co-founder was receptive “the last time.” That appeared to run counter to Jobs’ famous dislike of smaller tablets. In 2010, Jobs told analysts on a conference call that 7-inch tablets should come with sandpaper, so users could file their fingers down to a quarter of their size. “There are clear limits of how close you can physically place elements on a touch screen before users cannot reliably tap, flick, or pinch them,” Jobs, who died in October after a years-long battle with cancer, said at the time. “This is one of the key reasons we think the 10-inch screen size is the minimum size required to create great tablet Apps.” Apple still dominates the global tablet market, but rivals are closing in. Google unveiled the Nexus 7 in July to strong reviews. And Amazon’s Kindle Fire tablet, with a price tag about half the iPad’s, has encroached on Apple’s market share. Analysts say smaller, cheaper tablets entice cost-conscious buyers unwilling to spend $500 or more for an iPad. COURT FIREWORKS: The trial began this week and has already granted Silicon Valley an unprecedented peek behind the curtain of Apple’s famously secretive design and marketing machine. Forstall described the early days of
the iPhone’s top-secret inception. The smartphone that went on to revolutionize the mobile industry was developed in a building engineers nicknamed the “purple dorm.” Security was so tight employees sometimes had to swipe their badges four times just to get in, he said. earlier on Friday, Schiller told a packed courtroom that Apple’s strategy in maintaining its market momentum is to “make the product the biggest and clearest thing in advertising.” The 15-year Apple veteran told the jury the company has spent about $647 million on advertising for the iPhone, launched in 2007, and over $457 million for the two-year-old iPad. Dressed in a dark suit and yellow tie, Schiller — who favors blue jeans and is among a handful of executives reporting directly to CeO Cook — said Samsung’s copying of Apple’s designs has hurt its sales and disrupted its marketing. “I was pretty shocked at the appearance of the Galaxy S phone and the extent it appeared to copy Apple products,” he told the jury, adding that he was even
Engro eyes energy boost Engro plans study on energy crisis: CEO ISLAMABAD APP
The engro Corporation is planning to conduct a study on the current energy crisis with a view to find ways and means to overcome it by judiciously utilizing the rich energy resources, including hydel and coal assets. This was stated by eNGRO Corporation Chief executive Officer (CeO) and President Aliuddin Ansari, while talking to media persons at an Iftar here at a
local hotel. engro Fertilizer , CeO, Ruhail Mohammad engro corporation Senior Vice President human Resources and Public Affairs, senior management Tahir Jawaid of the and journalists attended the Iftar. Ansari highlighting the importance of rich energy resources in the country said that besides potentials of hydel power generation, he said that to overcome the current energy crisis, Pakistan has no other alternative except development of indigenous energy resources. he said that Thar coal fields have estimated lignite reserves of about 200 billion tons which is equivalent to total oil
CORPORATE CORNER reserves of Iran and Saudi Arabia. “These can be utilized to produce 100,000 MW electricity, power for 200 years”, he remarked. he claimed that for one block of Thar coal 1200 MW electricity can be generated and there can also be produced 100 blocks to generate sufficient number of electricity in the country. “Primary objective of the Thar coal development was to provide affordable, reliable and sustainable electricity to consumers using indigenous resources”, he remarked. Ansari further said that reliance on indigenous fuel would help save billions of dollars in foreign exchange which
were currently being spent on import of expensive RFO (Refined Furnace oil). he added that Thar coal based power tariff would be much lower than RFO based power tariff which means general consumers can get electricity at much cheaper rate than what they are paying right now. “That coal is also competitive verses imported coal and LNG”, he remarked. he said that to expedite development of this valuable energy resource through public private partnership, in 2008, government of Sindh initiated the international competitive bidding (ICB) process to select a preferred private sector.
Rajoy’s moment of embarrassment The premier has a lot on the menu as he seeks to salvage Spain’s fiscal, and his personal, credibility
SNAKES & LADDERS KUNWAR KHULDUNE SHAHID After his oh so triumphant moment in June, when after securing a 100-billioneuro recapitalization of the Spanish banks the Spanish premier touted the moment as a “victory”, Mariano Rajoy is now hankering after a full-fledged 300million-euro bailout for his country. This is obviously in the “best interests” of the nation and its people. Another thing which is pretty obvious is that the inevitable bailout would now be a moment of embarrassment for the Spanish leader, and a massive loss for him and his party on the political front, as the country gears up for the scathing austerity measures that have already begun taking their toll on the masses. Markets are understandably apprehensive about Rajoy’s words, and his claim that Spain can claw back its deficit. Rajoy’s bailout cry later last week came after eCB (european Central Bank) President Mario Draghi threw another nasty little spanner into the eU works, firstly owing to his failure in delivering immediate aid to, what are indubitably volatile debt markets, which in turn have ensured that the cost of borrowing for
Madrid penetrates beyond the realms of sustainability. Secondly, and arguably more agonizingly for the fraught markets, Draghi’s claim that nations would have to request a bailout formally from the european Financial Stability Facility, was more of a dagger in their wallets.
more shocked when he saw the Galaxy tab. “I thought they’ve done it again, they’re just going to copy our whole product line.” Justin Denison, Chief Strategy Officer for Samsung Telecommunications America, took the stand after Forstall, stressing that the world’s largest technology company by sales was also no slouch when it came to design and marketing. Denison told the court Samsung spent $1 billion on U.S. product marketing in 2011 and employs over 1,200 designers. Before Schiller took the stand, U.S. District Judge Lucy Koh rejected Apple’s request for severe sanctions against Samsung over the conduct of one of the Korean firm’s attorneys, though she said such conduct risked tainting the jury. A Samsung statement this week contained links to documents Koh ruled could not be admitted at trial. Attorney John Quinn, of Quinn emanuel Urquhart & Sullivan, acknowledged he authorized the statement but said it was not designed to sway the jury. Apple had asked Koh to punish Samsung by ruling that Apple’s phone design patents were valid, and had been infringed. Koh rejected that request but said there may be a post-trial investigation. “I will not let any theatrics or any sideshows distract us from what we are here to do,” Koh said.
This was of course shrouded by the emblematic “we’re considering buying the strugglers’ debt” lollipop. If one were to discern Draghi’s edict – and his lollipop – there can only be one explanation: eCB won’t budge an inch until and unless the situation is further exacerbated for the bond markets; that’s when eCB might step in with aid. And this of course is not exactly what the “strugglers” would’ve wanted to listen to. Mr Rajoy, on the other hand, doing his best to mask the discomforting scenario, has raucously clamored for details on the non-standard measures that the eCB is planning before the Spanish premier would unveil his million dollar ideas with regards to Spain’s future. Madrid, however, is already working in synchrony with the demands of IMF and the eU apropos Spanish economy reformation. These demands ask Madrid to up the ante on taxes and cut down on profligate spending – just like the imaginary book ‘101 Ways to Implement Aus-
terity Measures’ suggests. The Spanish hierarchy has already announced a 65billion-euro tax hike package which also includes a framework of spending cuts, acquiescing to the Big Two’s demands. Another entrée on the Rajoy menu is the potential demand of pension system reformation, which would be yet another promise broken by the prime minister from his election campaign, with the clock still to strike one-year on the premier’s premiership. If there are further cuts the masses are going to understandably further scream bloody murder, as Rajoy exercises his little grey cells over escaping the quagmire. As Spanish banking wounds are further exposed, and double-dip recession kicks in, it is obvious that more regions are going to seek the government’s and Rajoy’s support or else face the music of bankruptcy. Mr Rajoy has his plateful with agendas spilling over. he’d need to do a lot better to prevent further embarrassment for himself and for Spain.
The Designers presents a special multi-designer showcase for Ramadan KARACHI: To celebrate the festivities of Ramadan and to help women get their hands on the perfect ‘eid jora’, The Designers Multi-brand store will be showcasing a special collection of semiformal and formal designer-wear brands along with exquisite diamond jewelry for a 15 day exhibition at their 26th Street, Karachi location. PRESS RELEASE
Almirah launches new store in Karachi KARACHI: The new brand of formal, semi-formal and casual wear for men and women, Almirah, has been launched in Karachi. The first outlet has been established at dolmen mall Tariq road while second outlet is all set to be launched at dolmen mall Clifton within Ramzan. PRESS RELEASE
Chief Secretary Sindh and Chairman, Sindh Bank Limited, Raja Muhammad Abbas, presides over the Bank’s Board meeting held on Saturday. President/CEO Sindh Bank, Mr. Muhammad Bilal Sheikh, Secretary Finance Sindh, Mr. Naveed Kamran Baloch, Directors Mr. Wazir Ali Khoja, Mr. Shahid Murtaza and Mr. M. Naeem Sahgal were also present on the occasion.
Monday, 6 August, 2012