profitepaper pakistantoday 16th september, 2012

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Sunday, 16 September, 2012

MALAYSIA EYES AGRICULTURE Seeks increased trade with Pakistan in agricultural sector ISLAMABAD Online

Pakistan was the second largest trading partner of Malaysia in South East Asia last year, therefore both the countries should make efforts to take these relations to a new height by aggressively exploring opportunities for joint ventures in various sectors. These remarks were made by High Commissioner of Malaysia to Pakistan Dr. Hasrul Sani Bin Mujtaba during a meeting with Islamabad Chamber of Commerce and Industry (ICCI), President, Yassar Sakhi Butt here on Saturday. He said that Pakistan produces quality and affordable agricultural products especially Pakistani rice and mangoes have great demand in Malaysian markets while Malaysia complements this with its expertise and more access to ASEAN trade civility of free trade agreements. Malaysian High Commissioner was optimistic that bilateral trade volume of Pakistan and Malaysia could be increased by finding new avenues of opportunities and cooperation. He also assured that his country would increase volume of import of Pakistani agro-products which would enhance bilateral trade relation between two countries. Speaking on the occasion, Yassar Sakhi Butt said that current increase in bilateral trade between

The Doc discusses the ailment Finance minister briefs PM about overall economic situation g

ISLAMABAD APP

Minister for Finance, Dr. Abdul Hafeez Sheikh called on Prime Minister Raja Pervez Ashraf here at the PM House on Friday and apprised him about the overall economic situation of the country.

The Prime Minister asked Dr. Hafeez Sheikh to vigorously follow outcome of the meetings held at the World Economic Forum in China during his visit.

He said that the bilateral meetings held with the Chinese leadership and meeting with the businessmen remained very fruitful and hoped that the follow up meetings would help attract the foreign investment in the country.

The Prime Minister appreciated Minister for Finance and his team for their hard work to steer the economy out of crisis despite many problems at domestic and international fronts.

The Minister for Finance apprised the Prime Minister about his meetings with Pakistani business houses interested in joint ventures with the Chinese companies.

‘Food self-sufficiency must for sustainable development’ ISLAMABAD: Due to the hard work of agri-scientists and introduction of modern technologies in the field of agriculture, the country is heading towards achieving selfsufficiency in food production. This was stated by the newly appointed Pakistan Agriculture Research Council (PARC), Chairman, Dr. Iftikhar Ahmad while addressing the senior scientists and employees of the council here on Friday. He stressed the need of trickling down benefits of modern research and techniques to farmers for promoting agri-sector in the country. He said that achieving the selfsufficiency in agri production was the priority for which all possible resources would be utilized. He said the provinces and all other stakeholder will be taken on-board for chalking out a comprehensive policy on agri sector for sustainable growth. The council will approach the Ministry of National Food Security and Research and Ministry of Finance for the early release of funds for the completion of ongoing research projects for the welfare of growers. APP Pakistan and Malaysia was subsequent to the signing of FTA between the two countries in 2007 but Pakistan’s share in the bilateral trade was only $257 million, which had tilted the balance of trade heavily in favour of Malaysia, thus, there was a dire need to balance this gap by increasing export of Pakistani products to Malaysia. He called on the Malaysian business community to take advantage of vast Pakistani market and investment opportunities in agriculture, construction, livestock and dairy, energy,

education, IT and Halal industry sectors.

Yassar Sakhi Butt was of the view that organizing of joint cultural events was the option which could be used to bring people of both nations closer to each other as well as exploit untapped bilateral trade and investment potential in both countries. ICCI President said that all Muslim countries should further promote and strengthen their economic ties and cooperation for exploiting the existing potential and ensuring maximum possible trade exchange.

Spain pledges reform timetable, paves way for bailout NICOSIA Agencies

Spain told euro zone finance ministers on Friday it will set clear deadlines for structural reforms by the end of the month, in a move European diplomats said would pave the way for an aid request before long to help it tackle its debt pile. Madrid’s borrowing costs have fallen sharply since the European Central Bank said it was ready to buy Spanish bonds but big borrowing needs before the year-end and a deepening recession mean most analysts and policymakers believe it is only a matter of time before it will require help.

“We will adopt a new set of reforms to boost growth ... It will be in line with the recommendations of the European Commission,” Economy Minister Luis de Guindos told reporters after meeting his peers in Cyprus.

Euro zone policymakers have said that to get aid, Spain would need to adhere to strict conditions, which usually entail detailed reforms and concrete deadlines, rather than vague plans.

Madrid’s move is therefore seen by EU diplomats as a precursor to a request that pre-empts any euro zone calls for further reforms in an attempt to limit a political backlash at home, although de Guindos insisted the package was unrelated to any bailout terms.

IMF talks up its programs g

Global financial crisis to be addressed by adopting IMF supported economic programs: IMF ISLAMABAD Online

The International Monetary Fund (IMF)-supported economic programs and related policy advice have helped low-income countries navigate the global financial crisis, an internal review found.

The IMF latest report, covering more than 70 low-income countries eligible to receive concession IMF resources, also presented new evidence that IMF support had played a positive role over the longer term in raising growth, reducing poverty, and strengthening poorer countries’ resilience to shocks. The report, which

was discussed by the IMF Executive Board on September 6, also presented proposals to address a sharp prospective drop in the IMF’s concession lending capacity after 2014, and ensure that resources were used efficiently by tailoring them better to countries’ needs.

IMF staff will prepare two further reports, with recommendations on how to implement these proposals, based on Directors’ feedback.

The 2009 reforms aimed to close gaps and to create a streamlined architecture of facilities that is better tailored to the needs of low-income countries.

Subsequently, demand for support from the IMF for countries’ programs had been high, and shifted to a more di-

verse range of facilities. The use of facilities had been greatest among the poorer low-income countries and those eligible for the heavily indebted poor countries debt relief program and had increased strongly for small and fragile economies. Many members utilized the increased operational flexibility under the 2009 reforms, but recent experience had highlighted a few areas where streamlining and greater flexibility could enhance the IMF’s ability to respond effectively to members’ needs.

Pakistan Petroleum targets 30 percent of oil blocks in auction KARACHI Online

Pakistan Petroleum, the nation’s secondbiggest explorer, expects to win 30 per cent of the oil and gas blocks the government plans to auction as part of a plan to ease record energy shortages.

As many as 35 exploration blocks may be put up for bidding in the next few weeks, Chief Executive Asim Murtaza Khan said in an interview.

The Karachi-based company will explore onshore oil fields itself and seek overseas partners for those in the sea, he said. Pakistan raised gas prices last month as part of a new oil policy that aims to attract investors end blackouts that have shut factories and led to violent protests in the South Asian nation. The government will buy 90 per cent of the gas produced from the new fields at a maximum $6.6 per million British thermal units, compared with $4 earlier.

“You need to offer something to the investor to come to Pakistan and not go elsewhere, Khan said in his Karachi office, “That extra is now available. Middle Eastern, Gulf-based, European and Canadian companies

are in touch with us and are expressing interest. Overseas companies that partner with Pakistani explorers may need to invest as much as $300 million, Khan said. “The policy has been unveiled at a time when Pakistan is facing acute natural gas shortage” BMA Capital Management, Deputy Head, Furqan Punjani said.

“Competitive product prices, especially for natural gas, and incentives to increase production are the key highlights.

Pakistan Petroleum’s profit rose 30 per cent to 40.9 billion rupees ($432.5 million) in the 12 months to June 30 from a year earlier. Sales gained 23 per cent to 96.2 billion rupees.

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Business 02 Oil prices push higher as Fed stimulus supports Oil prices rose but settled below four-month highs hit in the session as concerns that high energy costs could threaten economic growth tempered hopes for stronger demand after the Federal Reserve launched its latest economic stimulus program g

NEW YORK

B

Agencies

RENT crude rose a seventh straight session and Brent and U.S. crude futures posted weekly gains as the dollar fell broadly, dropping to a fourmonth low versus the euro, after the Fed’s Thursday announcement of a third bond-buying program. <USD/> A weaker U.S. currency is usually supportive to dollar-denominated commodities such as oil and industrial feedstock copper, which jumped to a 41/2 month peak. <MET/L> Equities also received a lift from the U.S. central bank’s action, with U.S. stocks up a fourth straight day and

European shares jumping to a 14-month high. .N .EU “The market is exhausted after rising so much, and the IEA (International Energy Agency) economist worrying about high oil prices probably helped pull prices back some,” said Dan Flynn, analyst at Price Futures Group in Chicago.

Current oil prices could push the global economy into recession, Fatih Birol, chief economist at the International Energy Agency said on Friday.

Birol said Europe and China are most vulnerable to high prices but declined to say whether this latest price jump could prompt the IEA to release oil reserves. He said the agency was monitoring markets very closely.

Front-month November Brent crude rose 78 cents to settle at $116.66 a barrel, after reaching $117.95,

the highest since prices reached touched $118.45 on May 3.

Brent gained 2.1 percent for the week.

U.S. October crude, up 2.7 percent for the week, rose 69 cents to settle at $99 a barrel. U.S. crude reached $100.42, its first time over $100 since May 4 when it touched $102.72.

U.S. total crude trading volumes were a robust 51 percent above the 30-day average and outpaced Brent, which lagged its 30day average by 6 percent.

Money managers raised their net long U.S. crude futures and options positions in the week to September 11, the Commodity Futures Trading Commission said

South Sudan slices crude cake into three parts

on Friday.

Crude futures prices are up about 2 percent this month after surging 9 percent in August and 7 percent in July, on revived geopolitical tensions and an anticipated maintenance-related drop in North Sea crude oil production in September.

“The Fed will be indirectly adding more liquidity into the asset markets and that money will need to go somewhere and part of it will go into commodities, even if current commodity prices are already at demand-destruction levels,” said Olivier Jakob at Petromatrix in Zug, Switzerland.

HIGH OIL PRICES AND THE ECONOMY Highlighting the economic risk from surging oil prices, a jump in gasoline costs pushed up U.S. consumer prices in August at the fastest pace in more than three years and squeezed spending on other items.

Industrial production dropped 1.2 percent in August, the biggest decline since March 2009. The consumer price index increased 0.6 percent, the first rise in five months and the biggest since

June 2009.

Gasoline prices, which also recorded their largest increase since June 2009, accounted for about 80 percent of the rise in consumer inflation last month, the Labor Department said.

In contrast to those cautionary reports, U.S. consumer confidence unexpectedly improved in early September as Americans anticipated better economic and employment prospects, a survey showed.

U.S. gasoline futures rallied 1.8 percent, moving back above $3 a gallon after falling the previous two sessions.

Heating oil, the benchmark distillate futures contract, rose nearly 1 percent.

“Following Thursday’s weak performance, the U.S. product markets are now the strongest elements in the ... complex, benefiting from something of a trampoline effect as they try to catch up with the prior gains in crude oil,” Tim Evans, analyst at Citi Futures Perspective, said in a research note.

GEOPOLITICAL TURMOIL Oil prices received support from escalating anti-U.S. protests over a film demonstrators consider blasphemous to Islam. That and the dispute over Iran’s nuclear program kept the geopolitical risk of supply disruption in North Africa and the Middle East in focus.

An aide to Iran’s supreme leader told the Iranian Students’ News Agency that Israel’s military threats had “put Israeli citizens one step away from the cemetery” and that Lebanese militant group Hezbollah was ready to hit back.

Wall Street ends at multi-year highs on Fed

With oil disputes simmering over with its northern neighbor, Juba scored a massive triumph by detaching itself from ancient oil deals g

crude awakening KUNWAR KHULDUNE SHAHID In a big to detach itself from the oil deals that were signed before its independence last year, South Sudan has seized a 74,000-square-mile oil zone, formerly held by Total for over 30 years, and sliced it into three parts to get things going in oil exploration. One of the parts would remain with the French energy company, which had signed an agreement with Sudan over three decades ago, but after the creation of South Sudan the deal isn’t valid anymore since the current government that has control over the oil block wasn’t party to the agreement. The other two slices of the cake would be given to Kufpec from Kuwait and the American company Exxon Mobil – the former has already claimed nearly 25 percent of this unexplored block: Block B. The move is summoned amidst unyielding tension between Sudan and South Sudan with regards to the control over borderline oil zones. And hence Juba is doing all it can to ensure that all the deals signed by Khartoum before South Sudan’s independence are declared null and void. And it wasn’t as if Total was successful in expediting exploration is this block, and 30 years is a huge span of time by all accounts.

The ongoing tensions with Sudan aside, South Sudan had virtually grown sick of the ‘total’ inactivity on the part of the French company that would not be compensated for the loss of two-thirds of its share over the oil zone. Total had an excuse that the ongoing civil war

NEW YORK Agencies

from the early 80s till 2005 was a major reason behind the inactivity, but the seven years after the civil unrest ceased, Total had done a grand total of zilch with regards to exploring the oil opulence in the zone. And hence it’s evident that Juba now needs new players to handle the nerve center of its economy.

South Sudan is in dire need of proper exploration activities if it wants to boost its oil reserves, which have long been the victim of inactivity, primarily because of security concerns.

Juba currently has a 0.35-million barrels per day oil produce, which is expected to take a nosedive in the near future, simply because there hasn’t been sufficient exploration activity.

The country needs to counter the an-

imosity of its northern neighbor, the country that it gained independence from, one that controls the pipelines that transport the oil extracted from South Sudan – a landlocked country. Juba also needs to disengage itself from all the deals that Khartoum signed when South Sudan was a part of Sudan if it wants to dig itself out of this hole, which is why this proverbial hand gesture to Total is a promising step. Slicing their scrumptious cake into three parts could mean a diversity of companies, with their varying interests and strengths, and it would be a long-term triumph even if only one of them managed to extricate oil on time and in its targeted volume.

Comments & queries: khulduneshahid@gmail.com

Shares of Apple Inc (AAPL.O), the largest U.S. company by market value, ended at an all-time peak, and Exxon Mobil (XOM.N), the second biggest, hit a fouryear high.

Equities are in a run-up that has pushed the S&P 500 to end higher for four consecutive months. The extended advance has come mainly from actions by Europe’s and the United States’ central banks to keep interest rates low and stimulate their struggling economies.

The Fed said Thursday that it would keep up its aggressive bond-buying until unemployment falls. Chairman Ben Bernanke said he wanted to see a convincing improvement in the economy that could deliver sustainable job creation. Bernanke’s comments are “going to create an artificial floor on the market, meaning that we could see higher prices over time,” said Paul Nolte, managing director at Dearborn Partners in Chicago.

“Any correction that we get will be no more than a few percentage points.”

The Dow and the S&P 500 both closed at their highest levels since December 2007, while the Nasdaq ended at the highest since November 2000. The small-cap Russell 2000 .RUT index closed at the highest since April 2011.

The Dow Jones industrial average .DJI ended up 53.51 points, or 0.40 percent, to 13,593.37. The Standard & Poor’s 500 Index .SPX closed up 5.78 points, or 0.40 percent, to 1,465.77. The Nasdaq Composite Index .IXIC gained 28.12 points, or 0.89 percent, to 3,183.95.

For the week, the Dow rose 2.2 percent, the S&P climbed 1.9 percent and the Nasdaq added 1.5 percent.

The S&P is now just 6 percent below its all-time closing high of 1,565.15 despite a relatively weak economy and economic risks around the world.

The Fed’s balance sheet could expand by 11 to 12 percent by the end of the year, monetary accommodation that could “translate into a move up in the S&P 500 stock index to the 1,505 area,” Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, LLC in Menomonee Falls, Wisconsin, said, Energy and material stocks led the gains as the Fed’s move boosted commodity prices. Miner Freeport-McMoran Copper & Gold Inc (FCX.N) rose 2.03 percent to $42.64 and aluminum company Alcoa Inc (AA.N) advanced 2.18 percent to $9.84. The PHLX Gold/Silver Index .XAU climbed 2.86 percent to its highest since early March.

The S&P energy sector index .GSPE rose 1.3 percent and the S&P materials sector index .GSPM was up 1.2 percent.

Sunday, 16 September, 2012