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Monday, 19 November, 2012
Indian fair to open new vistas for Pakistani businessmen: Bashir ISLAMABAD
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HE participation in the International Trade Fair 2012 will open new vistas of opportunities for Pakistan's business community in India, said Pakistan High Commissioner in India Salman Bashir. Inaugurating Pakistani Pavilion at 32nd Indian Internal Trade Fair (IITF) 2012 in New Delhi, Salman Bashir said that there was gradual and significant improvement in the economic and trade relations between Pakistan and India although latter's view and stance on certain political issues were quite clear. According to a message received here
from New Delhi, the High Commissioner said that more than 176 Pakistani stalls had been established in the fair and appreciated the FPCCI efforts for its cooperation in this respect. He said that the fair had provided an opportunity to the Pakistani entrepreneurs to explore joint venture opportunities with their Indian counterparts. He said that Pakistan wanted to keep cordial and peaceful relations with all the countries, particularly its neighbours. Sheikh Shakeel Ahmed Dhingra, Vice President FPCCI, appreciated the Indian government for extending full support and cooperation to the Pakistani delegates. Haji Fazal Kadir Khan Sherani, President of FPCCI said Pakistani's cottage industry was small, but its home textile
products were in big demand throughout the world, including India. He expressed his gratitude and thanked to the Indian Trade Promotion Department issuing visas expeditiously to the Pakistani participants and delegates. He called for establishing bank branches in both the countries and simplifying/liberalizing visa issuance policy to facilitate exchange of business delegations and promotion of trade and industry. Sheikh Shakeel Ahmed Dhingra; Iqbal Dawood Pakwala; Azhar Majeed Sheikh, Begum Salma Ahmed Vice Presidents FPCCI; Nasiruddin Sheikh, Chairman FPCCI Standing Committee on Exhibition; Naeem Ahmed, Pakistan's Trade Commissioner in India were also present on the Occasion. The fair will continue till November 27.
Santander plans to invest in Spain's bad bank Spain's Santander (SAN.MC) plans to invest in the country's so-called bad bank in a sign that healthy domestic lenders are willing to support the entity created to clean up the aftermath of a 2008 property crash g
MADRID AGENCIES
"The bank plans on investing in the bad bank," a spokesman for Santander, Spain's biggest bank, told Reuters on Saturday. Spain has set up the bad bank to siphon off toxic real estate assets from bank balance sheets that date from the property crash. The bad bank's creation is a condition of receiving up to 100 billion euros ($127 billion) of aid in a European bail-out of the country's financial sector. Spain's second biggest bank, BBVA (BBVA.MC), is considering investing in the vehicle, but has yet to make a decision, a BBVA spokesman told Reuters on Saturday. Sabadell (SABE.MC) is also considering investing but has not yet made a decision, a Sabadell spokesman said.
The bad bank's managers are currently in talks with BBVA, Sabadell and Barcelona-based Caixabank (CABK.MC) about them investing in the vehicle, a banking source said. Caixabank was not immediately available for comment. An Economy Ministry source said on Friday the bad bank could go ahead just with backing from domestic investors but foreign investors would give it credibility. The bad bank will initially have equity of 3.9 billion euros. But the government needs private investors to stump up 2.2 billion euros, or 55 percent of this, in December, the Economy Ministry source said on Friday. Private sector support is key because the government wants to keep its stake in the bad bank below 50 percent to reduce the burden on state finances. The bad bank, known as Sareb, will ini-
tially receive assets - such as soured loans to housebuilders and foreclosed property from four state-rescued banks, including Bankia (BKIA.MC), worth 45 billion euros. It will have a maximum asset value of 90 billion euros. The equity in the bad bank could rise to 5 billion euros after including assets from a further group of banks, aside from those taken from the state-rescued banks, the source said.
The government hopes eventually to capture 500 million euros of investment from foreign investors, or 10 percent of the final equity tranche. The rest of the bad bank will be financed by senior state-backed bonds. Government sources said on Friday that Spain's bank restructuring fund, the FROB, could use part of the European aid to invest in the bad bank, and as such, would not need to tap markets.
Quelle catastrophe!
France bank chief says end of euro would be 'disaster'
MADRID AGENCIES
Bank of France governor Christian Noyer said Friday the euro is here to stay and warned that its disappearance would be an "absolute disaster". The central bank chief defended the currency as the recession-hit eurozone tried to contain a growing debt crisis, with Greece battling to avert default and Spain pondering a sovereign bailout. "The future of the euro is absolutely clear cut," Noyer said in a speech to the annual assembly of Spain's Association of Financial Markets in the Spanish capital. "I have absolutely no doubt that the euro will stay in the long term future," he added. "It is the natural continuation of the European Union, it was in the spirit of the founding fathers." Noyer said the benefits of the single currency were "perfectly clear". "People don't realise that if the euro disappears it will be an absolute disaster," he warned. The French banking chief pressed European powers to set up a banking union as an urgent response to the region's financial crisis. European leaders agreed in October to establish a regional banking supervisor in 2013, the first step towards a banking union that would allow the European Union to directly help troubled banks.
Wall Street week ahead: Going off ‘cliff’ with a bungee cord g
The 1987 crash. The Y2K bug. The debt ceiling debacle of 2011 NEW YORK AGENCIES
All these events, in the end, turned out to be buying opportunities for stocks. So will the "fiscal cliff," some investors say as they watch favorite stocks tumble during the political give-and-take happening in Washington. The first round of talks aimed at avoiding the "fiscal cliff" caused a temporary rise in equities on Friday, signaling Wall Street's recent declines could be a buying opportunity. The gains were small and sentiment remains weak, but it suggests hope for market bulls. Though shares ended moderately higher on Friday, it was not enough to offset losses for the week. The S&P was down 1.5 percent, while both the Dow and the Nasdaq fell 1.8 percent. The S&P 500 is down more than 5 percent in the seven sessions that followed President Barack Obama's re-election. Uncertainty arose as attention turned to Washington's task of dealing with mandated tax hikes and spending cuts that could take the U.S. economy back into recession. Some see the market's move as an overreaction to hyperbolic headlines about policy gridlock in Washington, believing stocks may start to rebound in what should be a quiet few days ahead of the Thanksgiving holiday next Thursday. "It just doesn't seem to make any sense that you suddenly wake up the day after the election and realize we've got a fiscal cliff," said
Krishna Kumar, partner at New York hedge fund Goose Hollow Alpha Advisors. Not long ago the S&P was on target for its second-best year in the last 10, riding a 17 percent advance in 2012. That's been halved to about 8 percent, which isn't bad but disappointing compared with just a month ago. Investors have been selling the year's winners. Apple (AAPL.O) is down 25 percent from its peak above $700. General Electric (GE.N) is down 14 percent; Google (GOOG.O) has lost 16 percent. Overall, the stocks that make up the top 10 percent of performers in the month prior to Election Day have been the worst performers since, according to Bespoke Investment Group of Harrison, New York. "I think it's a good opportunity to be long stocks at these levels," said Kumar. Hikes on capital gains and dividend taxes are on the line, and Obama has dug in his heels on what he sees as a mandate to make the tax code more progressive. He seems to have the upper hand in dealings with Congress because Republican lawmakers don't want to see tax rates increase, which is what will happen if no solution is found by the beginning of 2013. Republicans don't want to take the blame for driving the economy over the cliff. The current crisis is similar to last year's fight to raise the U.S. debt ceiling, which led to the downgrade of the United States' top credit rating in early August 2011.
During the dealings, the S&P 500 lost 18.8 percent between its peak in July 2011 and its bottom in August. As the market slid, the political standoff badly hurt investors' confidence in Washington, setting off a spike in volatility. In the end a deal was announced that raised the ceiling and put off longer-term fiscal decisions until January 1, 2013, setting the stage for today's "fiscal cliff" crisis. After staying flat through September 2011, the S&P 500 jumped 31 percent between its October low and the end of March. BUY THE DIP? Gridlock in Washington and all that could possibly go wrong with the economy if a deal is not reached have grabbed the headlines, but the negotiations leave room for stock market gains. Congressional leaders said Friday they will work through the Thanksgiving holiday recess to find a solution. "The debate over how to solve (the fiscal cliff) may be more productive than is commonly recognized," said Brad Lipsig, senior portfolio manager at UBS Financial Services in New York. "The U.S. is facing a major debt overhang, and serious steps toward addressing it might ultimately be viewed as a positive for future growth," he said. "The market may recognize this and, after a time of hand wringing, recover from the concerns with a renewed sense of optimism." The recent selling took the S&P 500's relative strength index - a technical measure of internal strength - below 30 this week, indicating the benchmark is over-
sold and due for a rebound. The RSI in four of the 10 S&P sectors utilities, telecoms, consumer staples and technology - is below 30 and the highest RSI reading, for the consumer discretionary sector, is below 40, suggesting a bounce is in store. "What I want to do is what we did during the decline following the budget negotiations in the summer of 2011: The lower the stock market goes, the more I want to own stock," said Brian Reynolds, chief market strategist at New York-based Rosenblatt Securities. "If we go off the cliff it will be with a bungee cord attached," he said. KEEP CALM AND HEDGE: Volatility is expected to rise through the end of November and to spike in late December if no agreement on the fiscal cliff is reached in Congress. Along-
side comes opportunity for those with high risk tolerance. "Recently, volatility has increased in the market overall. You can't really pick it up in the VIX yet, but I think as we get through November, I think you're likely to see the VIX be at a relatively higher level," said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston. In 2011, the VIX averaged 19.2 in July and 35 in August. So far this month the average is 17.8 and it is expected to spike if negotiations on the cliff drag into late next month. "Looking at the range of possibilities, I would say any of them would be better than sitting here waiting. I would even put going off the fiscal cliff in that category," said Jill Cuniff, president of Seattlebased Edge Asset Management Inc, which manages about $20 billion.
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Business 02 Samsung goes after HTC deal to undercut Apple When Apple Inc and HTC Corp ended their worldwide legal battles last week with a 10-year patent licensing agreement, they declined to answer a critical question: whether all of Apple's patents were covered by the deal g
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T'S an enormously important issue for the broader smartphone patent wars. If all the Apple patents are included -including the "user experience" patents that the company has previously insisted it would not license - it could undermine the iPhone makers efforts to permanently ban the sale of products that copy its technology. Samsung Electronics Co Ltd, which could face such a sales ban following a crushing jury verdict against it in August, asked a U.S. judge on Friday to force Apple to turn over a copy of the HTC agreement. In a court filing, Samsung argued it is "almost certain" that the HTC deal covers some of the patents involved in its own litigation with Apple. Representatives for Apple and Samsung could not immediately be reached for comment. Judges are reluctant to block the sale of products if the dispute can be resolved via a licensing agreement. To secure an injunction against Samsung, Apple must show the copying of its technology caused irreparable harm and that money, by itself, is an inadequate remedy. Ron Laurie, managing director of Inflexion Point Strategy and a veteran IP lawyer, said he found it very unlikely that HTC would agree to a settlement that did
not include all the patents. HTC declined to comment. If the deal did in fact include everything, Laurie and other legal experts said that would represent a very clear signal that Apple under CEO Tim Cook was taking a much different approach to patent issues than his predecessor, Steve Jobs. Apple first sued HTC in March 2010, and has been litigating for more than two years against handset manufacturers who use Google's Android operating system. Apple co-founder Jobs promised to go "thermonuclear" on Android, and that threat has manifested in Apple's repeated bids for court-imposed bans on the sale of its rivals' phones. Cook, on the other hand, has said he prefers to settle rather than litigate, if the terms are reasonable. But prior to this
Adventure for a cause KARACHI: SZABIST students of BBA 5E as part of their course project “Business Ethics” arranged a Corporate Social Responsibility (CSR) activity in collaboration with World Wide Fund-Pakistan (WWF). The objective of this initiative was to install Ultraviolet germicidal irradiation filters for water purification in the Government Boys and Girls Primary school, Kakapir village, Sandspit. Fresh water is scarce there and due to low income of people living there, they cannot afford safe and clean drinking water. So in order to help the deprived people a water purifier and a cooler was installed at the school for a better and hygienic living. Along with this a beach cleaning activity was performed by the students near the wet land of WWF to further promote environmental sustainability. This entire project was done under the supervision of Hina Shamsi Nauman. This venture was financed by the proceedings of their previous event K-Town Madness. It was a treasure hunt for all major university students within the vicinity of Clifton and Defence where clues were placed at thirteen different locations like close-by malls and restaurants and the participants were required to solve them and move forward. The main objective of the event was to earn a reasonable profit and conduct a CSR activity to promote environmental sustainability.
month, Apple showed little willingness to license its patents to an Android maker. HOLY PATENTS In August, a Northern California jury handed Apple a $1.05 billion verdict, finding that Samsung's phones violated a series of Apple's software and design patents. Apple quickly asked U.S. District Judge Lucy Koh to impose a permanent sales ban on those Samsung phones, and a hearing is scheduled for next month in San Jose, California. In a surprise announcement on Saturday, however, Apple and HTC announced a license agreement covering "current and future patents" at both companies. Specific terms are unknown, though analysts have speculated that HTC will pay Apple somewhere between $5 and $10 per phone. Additionally, Apple and Google are discussing whether to arbitrate some patent
claims which would put at least part of its global courtroom battle on hold, according to court documents filed on Thursday. During the Samsung trial, Apple IP chief Boris Teksler said the company is generally willing to license many of its patents except for those that cover what he called Apple's "unique user experience" like touchscreen functionality and design. However, Teksler acknowledged that Apple has, on a few occasions, licensed those holy patents - most notably to Microsoft, which signed an anti-cloning agreement as part of the deal. In opposing Apple's injunction request last month, Samsung said Apple's willingness to license at all shows money should be sufficient compensation, court documents show. Apple has already licensed at least one
S&P downgrades ABN Amro, Rabobank WASHINGTON AGENCIES
Standard & Poor's downgraded Dutch banks ABN AMRO, Rabobank and others Friday citing their exposure to a deeper economic slump in the Netherlands and the recession-hit eurozone. The ratings on the two large Dutch banks were cut by one notch each, to A from A+ for ABN AMRO and to AA- from AA for Rabobank. Two other banks, F. van Lanschot Bankiers and SNS REAAL, also were cut by one notch and S&P lowered the outlook on
ING Bank, ING Group and Achmea Hypotheekbank to negative, while keeping the ratings unchanged. "In our view, Dutch banks are exposed to increased economic risks as a result of a potentially more protracted downturn in The Netherlands and wider eurozone," S&P said. It added that the prolonged correction in the Dutch property market and government deficit-cutting measures would continue to hit the Dutch economy, "although we expect the overall impact on the banking sector to be moderate." S&P was cautious, saying the Dutch
DOHA: Qatar Airways CEO Akbar Al Baker, (right) with US Ambassador to Qatar Susan Ziadeh and Qatar's Civil Aviation Authority Chairman Adul Aziz Al Nuaimi after touring the airline's new 787 Dreamliner at Doha International Airport.
economy remains structurally sound and competitive, and that there is only a low likelihood that banks will experience a sharp increase in housing-related losses.
China’S GroWth ChallenGe PAOLA SuBACCHI
KARACHI: Zuhair Siddiqui, MD, SSGC and Zubair Motiwala, Adviser to CM Sindh chairing a meeting, with the office bearers of SITE Association of Industry, held on November 16, 2012 at the Company Head Office. SSGC management reiterated discontinuing gas supply for 48 hours to those units in all industrial estates in Sindh not observing supply closure every Sunday. Total closure ensures consistent gas supply for next six days in a week. SITE Association representatives included Dr. Arshad Vohra, Chairman, former Chairmen and members including Haroon Farooki, Irfan Moton, Salim Parekh, Arif Lakhani and Zulfiqar Chaudhry. SSGC management included Shoaib Warsi, SGM (UFG), Aminullah Khan, ASGM (Distribution-South), Major Mohammad Akhtar (Retd. ), ASGM (Customer Services) and Shakeel Bukhari, GM (Measurement).
of the prized patents in the Samsung case to both Nokia and IBM. That fact was confidential until late last year, when the court mistakenly released a ruling with details that should have been hidden from public view. In a court filing last week, Apple argued that its Nokia, IBM and Microsoft deals shouldn't stand in the way of an injunction. Microsoft's license only covers Apple patents filed before 2002, and IBM signed several years before the iPhone launched, according to Apple. "IBM's agreement is a cross license with a party that does not market smartphones," Apple wrote. Apple's seeming shift away from Jobsstyle war, and toward licensing, may also reflect a realization that injunctions have become harder to obtain for a variety of reasons. Colleen Chien, a professor at Santa Clara Law in Silicon Valley, said an appellate ruling last month that tossed Apple's pretrial injunction against the Samsung Nexus phone raised the legal standard for everyone. "The ability of technology companies to get injunctions on big products based on small inventions, unless the inventions drive consumer's demand, has been whittled away significantly," Chien said. The case in U.S. District Court, Northern District of California is Apple Inc v. Samsung Electronics Co Ltd et al, 11-1846.
Throughout the just concluded 18th Congress of the Chinese Communist Party ubiquitous television screens in trains and metro stations broadcast a live feed of the Chinese assembly. Beijing’s busy people, however, seemed not to pay close attention: for them, it was business as usual. The Chinese public’s indifference to their country’s ceremonial transition of power is hardly surprising. All critical decisions were taken well ahead of the Congress, behind closed doors, with very little input from outsiders. This apparently seamless transition, however, is widely expected to usher in a complex and potentially difficult decade for China – and for the rest of the world. China is at a turning point. With more than 100 million people still below the official poverty line and per capita income currently just over $6,000 in nominal terms, robust economic growth must be maintained. Outgoing President Hu Jintao indicated that China’s total GDP and per capita income should double by 2020, which will require 7.5% average annual growth. Is this feasible? Recent improvements in data for industrial production, fixed investment, and retail sales suggest that the Chinese economy, which had slowed in recent quarters, may already be on the mend. But the authorities remain cautious, given that China’s economic outlook depends heavily on external conditions, which is the source of most current uncertainty. However, as things stand, most independent economists expect 77.5% annual GDP in 2013-2017, while the International Monetary Fund forecasts a more optimistic 8.2-8.5% rate during this period. As we heard repeatedly during the Congress, China’s leadership reckons that its biggest policy challenge in the coming years will be the shift from export-led growth to an economic model based more firmly on domestic consumption. This has now become a matter of urgency, as the
United States and Europe are unlikely to provide much support to Chinese exports. Indeed, China is now expected to undershoot its 10% growth target for trade in 2012, even though exports to emerging-market economies were up by more than that in the first nine months of the year. Income growth and a lower household savings rate are essential to the shift in China’s growth model, and each presupposes key reforms. For example, improving the provision of health care, education, and care for the elderly, and bringing it into line with the needs and expectations of the emerging middle class should encourage more households to allocate a larger share of their income to consumption. Likewise, increasing the interest rates paid on bank deposits would enable savings to decline without loss of income. At the same time, as China proceeds along the path toward a market-based economy established more than 30 years ago by Deng Xiaoping, policymaking has become more complex. The economy needs to be steered in the desired direction without triggering instability, making correct sequencing and coordination of policy measures
essential. As some Chinese colleagues told me, the success of reforms in the next decade will depend more than ever on good design. In particular, the new leadership will have to attend to the linkages between the real economy and the expanding financial sector as it overhauls state-owned companies and liberalizes the banks. From commodities to financial assets, price formation should become more market-based and transparent, while capital allocation should become more efficient and the scope for rent-seeking and corruption should be reduced. Moreover, as the renminbi’s internationalization continues at a steady pace, domestic liberalization should occur in tandem with deeper global integration. In the coming years, the key issue, reflected in Hu’s Congress-opening speech, will be the relationship between the state and the market. But reforms will continue to be top-down and gradual, especially in the financial sector, where most efforts will be concentrated in the next decade. Many Chinese seem to believe that market discipline will bring fair competition and contribute to closing the widening gap between rich and poor. China’s income distribution has become highly skewed: at 0.438, the Gini coefficient, which measures income inequality, puts the country closer to the United States than to northern Europe’s egalitarian societies (with the exception of the United Kingdom). And the unjust allocation of resources, which has enriched so many politically well-connected individuals and families, has become more difficult to bear. A key question for the next decade, therefore, is whether the Chinese authorities’ growth targets will be enough to preserve social cohesion as further economic and political reforms are gradually implemented. As the economic pie grows less rapidly, greater fairness will be crucial to social stability. This much seems clear to the new leadership. Whether they will be able to engineer the necessary institutional shifts remains to be seen. CourtESy ProjECt SyNdICAtE
Monday, 19 November, 2012