profitepaper pakistantoday 23rd august, 2012

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Thursday, 23 August, 2012

BORDER BOUND Iran-Pakistan gas pipeline to reach border point by Sept 21: NIGC TEHRAN

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RAN-PAKISTAN gas pipeline will reach the zero border point in the first half of next Iranian year of 1392, Managing Director of National Iranian Gas Company (NIGC), Javad Oji, said on Wednesday. Oji, noting that significant steps were taken in the 9th and 10th governments in country’s gas industry, said the 56-inch Iranshahr-Pakistan border Chabahar-Zahedan pipeline will make 90 percent progress by March 19, marking end of the Iranian year of 1391.

He said the pipeline will be completely operational by end of Shahrivar (the sixth Iranian month).

Islamabad has reiterated its determination to cooperate with Iran in energy sector and pursue Iran-Pakistan (IP) gas pipeline project.

Speaking recently, Pakistan’s Foreign Ministry spokesman, Moazzam Ahmad Khan, said the Pakistani government is determined to complete the Iran-Pakistan gas pipeline project before 2014 and other energy projects with the US having nothing to do with them.

Ahmad Khan dismissed reports that the United States plans to invest $280 million in Pakistan’s power sector in return for Islamabad’s commitment not to

AFP

The mammoth Apple-Samsung patent trial moved to the jury Tuesday, setting the stage for a verdict that could have huge implications for the hot market in smartphones and tablet computers.

US District Judge Lucy Koh began reading instructions to the nine-member jury in San Jose, California, as lawyers for the two tech giants readied closing arguments. Apple, which accuses the South Korean electronics giant of copying the iPhone and iPad too closely, is seeking damages of up to $2.75 billion and an injunction that could knock some Samsung products off the US market.

Even a delay in sales could endanger Samsung’s position in the US market, where it is currently the top seller of smartphones. Samsung has countered by arguing that its patents on wireless communication were infringed by Apple,

Oil fell below $114 a barrel on Wednesday, with investors on edge over whether Europe would overcome its debt crisis, while Middle East tension kept the potential for supply disruption in focus LONDON AGENCIES

pursue the multi-billion-dollar deal with Iran. The Iran-Pakistan gas pipeline, projected to cost $1.2-1.5 billion, is aimed to export a daily amount of 21.5 million cubic meters of Iranian gas to Pakistan.

Maximum daily gas transfer capacity of the 56-inch pipeline — which runs over 900 kilometers from Iran’s southern port city of Assalouyeh in Bushehr Province to the city of Iranshahr in Sis-

tan-Baluchestan Province — is estimated to hit 110 million cubic meters.

Iran has already constructed more than 900 kilometers of the pipeline on its soil.

AND JUSTICE FOR ALL SAN JOSE

Oil falls below $114 on euro zone uncertainty

Apple-Samsung smartphone clash heads to jury and is demanding up to $422 million from the Silicon Valley manufacturer.

The trial is wrapping up after 10 days of testimony over three weeks, in which Apple put its own designers and executives on the stand, along with experts, all of whom accused Samsung of illegally copying Apple designs.

Samsung witnesses said meanwhile that they had come up with the designs and icons they used on their own.

However, internal Samsung documents introduced as evidence did show they were aware that they were behind Apple’s iPhone when it came to some userinterface features.

One Samsung designer described the gap between the iPhone and a Samsung smartphone as the “difference between Heaven and Earth.”

The case has been a particularly heated one, with lawyers from both sides filing

hundreds of pages of objections against particular exhibits and witnesses.

At one point, Koh asked an Apple lawyer if he was “smoking crack” when he proposed to put more than 20 witnesses on the stand in the final day of testimony.

“First of all, I’m not smoking crack, your honor,” replied Apple lawyer Bill Lee. The jury was expected to begin deliberations in the case on Wednesday, and will have to pore over a complicated 20-page form addressing hundreds of separate allegations, that Samsung violated Apple’s patents and trademarks.

Last week, Koh asked for one more settlement conference, with the chief executives of the two companies speaking directly by telephone.

“I see risk for both sides,” Koh said at that time. “It’s time for peace.”

On Monday a Samsung lawyer confirmed that Apple chief Tim Cook and Sam-

sung boss Kwon Oh-Hyun did talk but no settlement was reached.

This is one of several court cases 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 has a lot at stake in the US case, which could result in large damages or injunctions against its products in the American market.

A survey by research firm IDC showed Samsung shipped 50.2 million smartphones globally in the April-June period, while Apple sold 26 million iPhones. IDC said Samsung held 32.6 percent of the market to 16.9 percent for Apple.

Samsung is the leading maker of smartphones using Google’s Android operating system, which has become the most popular platform despite complaints from Apple that it has infringed on its patents.

Brent crude has recovered from a low of $88.49 reached in June to hit a threemonth top last week on hopes of progress in Europe and worries about Iran. But to sustain that momentum, oil dealers will need to see more concrete steps taken by central banks from Europe to China to stimulate their economies. Brent shed over $1 and sank to a session low of $113.53. By 1256 GMT, it recovered to $113.82 - a loss of 82 cents. U.S. crude lost 42 cents to $96.42 per barrel.

“Technically the market is starting to stagnate a little bit,” said Swiss energy market analyst Olivier Jakob. “Brent has not been able to push through the resistance of $115.” Stocks and currency markets have also been rallying in recent weeks on speculation the European Central Bank is set to take steps to cap borrowing costs in Spain and Italy.

Greek Prime Minister Antonis Samaras is holding bilateral talks with leaders of France, Germany and the Eurogroup this week to seek concessions for its austerity-to-bailout swap. His first meeting is later this afternoon with euro zone chief Jean-Claude Juncker. “... All we’ve got (from Europe) at the moment is dialogue, but they haven’t got any action or any follow-through,” said Ben Le Brun, a Sydney-based market analyst at OptionsXpress.

ESCALATING TENSION: Supply concerns continue to support prices, with escalating tension in Iran and Syria adding to worries over an expected cut in output from the North Sea because of maintenance operations.

Turkey is investigating possible Syrian links to a deadly car bomb attack near its southeastern border, underscoring fears the conflict in Syria is fuelling instability in neighbouring countries.

The International Atomic Energy Agency (IAEA), a U.N. nuclear watchdog, will try to persuade Iran to address questions about its suspected nuclear weapons research at a meeting on Friday, more than two months after previous talks ended in failure.

RBS, Commerzbank drawn into US Iran money probe LONDON/FRANKFURT AGENCIES

An RBS spokeswoman declined detailed comment on Wednesday but referred to disclosures published with the bank’s half-year results earlier this month. These said RBS had initiated talks with U.S. and British authorities on whether it complied with economic sanctions on Iran, and that it could face a “material impact” from the investigation.

The inquiry raises the possibility of a substantial punishment for the part-nationalized British bank, which is also being investigated for its involvement in the Libor rate rigging scandal, ramping up pressure on Chief Executive Stephen Hester.

The United States first imposed sanctions on Iran more than 30 years ago but has tightened them in recent years as it tries to stifle Tehran’s nuclear program.

In the disclosures accompanying the RBS results on August 3, the British bank said it had “initiated discussions with UK and U.S. authorities to discuss its historical compliance with applicable laws and regu-

US authorities are investigating Royal Bank of Scotland and Commerzbank over possible breaches of sanctions on Iran, in a widening crackdown which has already cost Standard Chartered a hefty fine lations, including U.S. economic sanctions regulations”. These followed an internal review begun by Hester shortly after his arrival at the bank in 2008.

“The investigation costs, remediation required or liability incurred could have a material adverse effect on the group’s net assets, operating results or cash flows in a particular period,” the bank said. RBS had been making similar disclosures for the past 18 months, the spokeswoman said.

The scale of the transactions being investigated at RBS, which is 82 percentowned by the taxpayer, was not clear.

The Financial Times reported on Wednesday that the U.S. Federal Reserve and Department of Justice were conducting the investigation, citing several people close to the situation. It cited a person familiar with the situation as saying one risk manager had already left the bank following the internal review. A spokesman for the Fed-

eral Reserve said it could not “comment on supervisory matters pertaining to individual institutions”. A representative at the Justice Department did not respond to a request for comment.

“CONSIDERABLY NEGATIVE” CONSEQUENCES: Germany’s second biggestlender, Commerzbank, also said in a regulatory filing that investigations by the United States into violations of sanctions on Iran and other countries could hold “considerably negative” consequences. Commerzbank, which is 25 percent-owned by the German state, said U.S. authorities were investigating whether its dealings with Iran, Sudan, Myanmar, North Korea and Cuba had violated U.S. embargoes, and pointed out that other banks had paid large settlements to end such investigations.

“The financial impact of the procedure and its termination cannot be predicted and could exceed eventual provisions, which

could have considerably negative consequences,” Commerzbank said.

Commerzbank repeated on Wednesday that it had had no new business with Iran since 2007 and that it was too early to say what the financial consequences of the U.S. probes would be.

Washington imposed economic sanctions on Tehran in 1979 after Iranian students stormed the U.S. embassy and took diplomats hostage. Until November 2008 U.S. banks could process some transactions for Iranian banks or individuals provided they were initiated offshore by non-Iranian foreign banks and were on the way to other non-Iranian foreign banks.

The European Union has also imposed sanctions, including a ban on trading Iranian oil, due to fears that Tehran is trying to develop nuclear weapons. Iran says the program is purely peaceful but the measures are making it increasingly difficult for Tehran to

conduct business in U.S. dollars and euros.

The United Nations Security Council has also introduced more limited restrictions.

Standard Chartered agreed last week to pay $340 million to the New York bank regulator after it was accused of concealing $250 billion in Iranian transactions. The London-based bank joined a long list of lenders which have been punished for doing business with sanctioned states such as Iran and Cuba.

Barclays Plc, Lloyds Banking Group Plc, Credit Suisse and ING Bank NV have agreed to fines and settlements totaling $1.8 billion, while regulatory filings show that HSBC Holdings Plc is under investigation.

In 2010, RBS agreed to pay $500 million to settle similar allegations by U.S. federal authorities that ABN Amro, a Dutch bank RBS acquired in 2007, had violated U.S. sanction laws.

PRO 23-08-2012_Layout 1 8/23/2012 1:17 AM Page 2

Business 02 Greece takes Europe down

US corn, soy prices hit records as drought lingers

European stocks slide before Greece talks, Fed minutes

CHICAGO AFP

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US corn and soybean prices closed at new record highs Tuesday as a new survey showed worse-than-expected crop damage from a brutal drought across the country’s central breadbasket. The price of corn jumped 1.7 percent to $8.3875 a bushel, while soybeans finished at

AFP

UROPEAN stock markets slid Wednesday following losses in Asia and on Wall Street and as investors awaited key talks on Greece’s debt woes plus minutes from the US Fed’s last monetary

policy meeting.

London’s benchmark FTSE 100 index of top companies shed 1.05 percent to 5,796.08 points in late morning deals.

Frankfurt’s DAX 30 dropped 0.76 percent to 7,034.83 points and in Paris the CAC 40 slipped 0.71 percent to 3,488.49 points. Milan declined 0.50 percent and Madrid lost 1.13 percent.

“Weaker equity markets across the board in Asia due to disappointing trade data out of Japan and renewed concerns about sharply falling corporate profits in China is also taking a toll on European equity markets... with most major indices handing back yesterday’s gains,” said ETX Capital trader Markus Huber.

“With once again very little data out in Europe today the spotlight will remain on Greece.”

The country’s Prime Minister Antonis Samaras on Wednesday called for more time to make spending cuts and reforms to unlock funds to keep the debt-wracked country afloat, two days before Greece’s crunch talks in Germany.

“All that we want is a little ‘breathing space’ to revive the economy quickly and raise state income. More time does not automatically mean more money,” Samaras said in an interview with German daily Bild. Samaras was to meet the head of the Eurogroup of eurozone finance ministers, Jean-Claude Juncker, on Wednesday ahead of a trip on Friday to Berlin to meet German Chancellor Angela Merkel.

He holds talks with French President Francois Hollande on Saturday. As part of a rescue

package with its international creditors, Greece has committed to slashing some 11.5 billion euros from spending over two years from 2013.

Samaras reportedly wants to discuss extending the deadline by two years in his talks in Berlin and Paris. European stock markets had closed higher on Tuesday and the euro jumped back above $1.24 as investors remained hopeful of central bank action over the eurozone crisis and cheered Spain’s latest debt auctions.

With the eurozone still firmly in focus for traders, the euro stood at $1.2475 approaching midday Wednesday in London, up from $1.2470 late on Tuesday in New York, when the single currency reached a seven-week high at $1.2488.

“Optimism in the eurozone has not been the only driving force behind the better tone in the euro against the dollar recently,” said Jane Foley, senior currency strategist at Rabobank.

“This month’s better than expected US nonfarm payrolls, trade and retail sales data releases has driven optimism about the recovery on the other side of the Atlantic. As a result risk appetite has perked up,” she added. Investors were also waiting for the release of minutes from the Federal Reserve’s last monetary policy meeting. Due later

Wednesday, the minutes should provide indications as to why the US central bank has shied away from launching a fresh round of economic stimulus in the form of quantitative easing (QE).

“The release of the ... minutes from the August 1 policy meeting is the next prime focus for the markets,” said Foley.

“The firmer tone of treasury yields since the start of this month reflects the better US data releases and the simultaneously held view that the Fed may step back from the QE trigger.”

In company news Wednesday, shares in BHP Billiton were down 1.69 percent to 1,946.5 pence as the mining giant delayed expansion of its huge Olympic Dam project after posting a near 35-percent slump in annual net profit in a sign the global slowdown is hurting commodities. The world’s biggest miner put plans to grow the copper and uranium mine in Australia on hold after a 15 percent plunge in underlying earnings due to softer prices for most of its products through 2012. BHP’s first profit drop in three years to US$15.42 billion is a significant reversal of fortunes for the company following a record US$23.6 billion profit last year — the largest ever recorded in Australian corporate history.

Euro declines but ECB optimism keeps it near 7-week high The euro slipped against the dollar on Wednesday, retreating from the seven-week high in the prior session as investors bet the move was too far, too fast even as they remained cautiously optimistic euro zone policymakers are readying action to stem the debt crisis NEW YORK AGENCIES

Expectations have built in recent weeks that the European Central Bank will announce at its next policy meeting on September 6 plans to help lower Spanish and Italian bond yields, which some analysts believe will enable the euro to gain further.

Minutes from the latest U.S. Federal Reserve meeting due later on Wednesday were also adding to investor caution. Any hint of monetary easing would weigh on the dollar and benefit the euro but no mention will instead see the euro suffer on lower risk tolerance.

“There are a huge amount of (euro) sell orders at $1.2500, about a billion dollars,” said Boris Schlossberg, managing director of FX strategy at BK

Asset Management in New York. “We tried to test the upper band and didn’t have enough gas.” “People will also look at the FOMC minutes to see if there is the possibility of any further accommodation and if there is, there is more softness for the dollar,” Schlossberg said.

The euro fell 0.2 percent to $1.2447, still close to Tuesday’s high of $1.2488, and traders said it was likely to hold above $1.2420, where bids were reported.

“The main issue is whether the ECB will start buying peripheral bonds ... We have been seeing a bit of shortcovering in the euro over the last couple of weeks on fears of a big bazooka,” said Arne Lohmann Rasmussen, head of currency research at Danske Bank. “People are pricing out the risk that the euro zone will implode.”

Danske forecasts the euro will rise to $1.27 in three months as proactive policy from the ECB eases euro zone debt worries and leads investors to trim hefty bets on the currency falling.

$17.3025 a bushel, up 2.8 percent from Tuesday. That left the corn price up 68 percent from June and soybeans 39 percent higher. An all-time record hot July accompanied by nearly three months of extreme drought have baked the country’s prime farmland in the midwestern and central states, where the world’s largest corn and soybean crops are grown.

Prices jumped after reports from the annual Pro Farmer Midwest Tour gave analysts and traders more bad news on the state of the crops. “Crops in western Ohio and eastern Indiana were far below the norm,” said Pro Farmer analyst Brian Grete. Yields in South Dakota meanwhile were called “stunningly low.” “The Pro Farmer tour sparked the rally” Tuesday, said Frank Cholly of RJO Futures.

“They have a pretty good peg at final yields,” he said.

The Pro Farmer estimates were significantly lower than the US Department of Agriculture’s sharply slashed forecasts from last week. “We are getting less production from South America, so that forces buyers to go to the US,” driving up prices, Cholly added. On August 10, the USDA sharply reduced its production forecast for the globally crucial crops, saying output would likely be at the lowest level in six years.

Last week, they estimated that 50 percent of the corn crop was in poor or very poor condition, compared to 15 percent at the same time last year.

Iranian currency traders find a haven in Afghanistan: NYT KABUL NNI

With American and European sanctions spurring a currency crisis in Iran, officials say a growing number of Iranians are packing trucks with devalued rials and heading to the freewheeling currency market next door in American-occupied Afghanistan, to trade for dollars.

The rial has lost more than half its value against the dollar, and cross-border bank transfers and currency exchanges have become difficult, as sanctions have slashed Iran’s vital oil revenue and cut the country off from international financial markets. Iranian businesses and individuals are desperate to avoid further losses, by converting their money and moving it out for safekeeping. At the same time, the government is trying to find alternate ways to bring in hard currency, The New York Times reported.

Enter Afghanistan, where dollars function as a second national currency after years of Western spending and where financial oversight is so lax that billions of dollars in cash leave the country every year. Though Afghan and Western officials say they cannot put a precise figure on the trade with Iran, they see it as a potential challenge to the sanctions, and one that the United States, as Afghanistan’s main benefactor, helped create. The Iranians are “in essence using our own money, and they’re getting around what we’re trying to enforce,” one American official said.

SANCTIONS SOAP OPERA: TOW Iran looks to Armenia to skirt bank sanctions With international sanctions squeezing Iran, the Islamic Republic is seeking to expand its banking foothold in the Caucasus nation of Armenia to make up for difficulties in countries it used to rely on to do business, according to diplomats and documents UN AGENCIES

Iran’s growing interest in its neighbor Armenia, a mountainous, landlocked country of about 3.3 million people, comes at a time of rising international isolation for Tehran and increasing scrutiny by Western governments and intelligence agencies of Iranian banking ties worldwide as they attempt to stifle the country’s nuclear program.

The most recent example is British bank Standard Chartered (STAN.L), which has been in the spotlight due to U.S. charges that it hid from U.S. regulators and shareholders some $250 billion of transactions tied to Iran.

An expanded local-currency foothold in a neighbor like Armenia, a former Soviet republic which has close trade ties to Iran and is working hard to forge closer

links to the European Union, could make it easier for Tehran to obfuscate payments to and from foreign clients and deceive Western intelligence agencies trying to prevent it from expanding its nuclear and missile programs.

Armenian officials denied illicit banking links to Iran. The country’s central bank issued a press release in response to this article, stating that it requires all banks to scrutinize their transactions to avoid dubious financial exchanges.

“The Central Bank of Armenia will follow its supervision over the behavior and transactions of all financial institutions and their customers in ... Armenia, in order to safeguard its financial system from any destabilizing effects,” it said.

While the four rounds of U.N. sanctions remain limited, with only two Iran banks blacklisted by the Security Council, the United States and European Union

have implemented much tougher restrictions, sanctioning dozens of banks and other firms and making it increasingly difficult for Tehran to conduct business in U.S. dollars and euros.

A U.N. panel of experts that monitors compliance with the sanctions against Tehran recently submitted a report to the U.N. Security Council’s Iran sanctions committee that concluded Iran was constantly searching for ways to skirt restrictions on its banking sector.

“One state bordering Iran informed the Panel of requests from Iran to open new financial institutions,” the report said. “The requests were not pursued apparently because of that country’s burdensome legislation.”

Several U.N. diplomats familiar with the panel’s work confirmed that the unnamed state was Armenia, where Iran already has banking ties.

Despite Armenia’s denials of illegal banking arrangements, Iran has not given up trying to expand in the country, the diplomats said, and U.S. officials have repeatedly cautioned Armenian colleagues to tighten financial controls.

REPORTS AND DENIALS: Iran’s trade with Armenia, including an oil pipeline that Armenian news reports say should be finished in 2014, requires some form of cross-border banking. Iranian President Mahmoud Ahmadinejad has said that Iran’s annual trade with Armenia is around $1 billion, according to Iranian news reports. Engaging in transactions with Iranian banks is not a violation of international sanctions as long as it is not linked to Iran’s nuclear or missile programs or companies or individuals under U.S., EU or U.N. sanctions.

Iran insists its nuclear program is peaceful and refuses to shut it down. It

says the sanctions are illegal.

But Washington has made clear to governments around the world that trading with Iranian firms that are sanctioned by the United States could lead to a U.S. blacklisting.

A Western intelligence report shown to Reuters, and dated May 2012, said that Iran was searching for “convenient” locations to develop alternative banking relationships away from spy agencies and other international monitoring bodies. It said an expanded presence in Armenia was one of Iran’s goals.

“The Central Bank of Iran (CBI) has been operating for years to establish and develop concealed infrastructures to enable Iran to continue trading with foreign countries, particularly in countries convenient for Iranian activity, such as the UAE (United Arab Emirates) and Turkey,” the report said.

Thursday, 23 August, 2012