PRO 24-08-2012_Layout 1 8/24/2012 1:05 AM Page 1
Friday, 24 August, 2012
EXPANDING THE PATH TO RECOVERY nHa to spend rs 8550.425m on widening of n-45 ISLAMABAD
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APP
HE National Highway Authority plans to spend Rs 8550.425 million on improvement and widening of NowshehraChitral Highway (N-45). “Improvement and widening of Chakdara-Timergrah-Dir-Chitral (141 km) section” is a new project which will complete left over sections of the project “improvement of N-45 for dualisation, rehabilitation and reconstruction, which was undertaken in 2006 at the cost of Rs 2399 million,” a source in the Ministry of Communications told APP on Thursday. Regarding the new project global PC-I worth Rs 9202.488 mln was discussed by Central Development Working Party (CDWP) in October 2011,
BERLIN AFP
Giving Greece more time to implement necessary structural reforms and austerity measures would not solve its severe problems, German Finance Minister Wolfgang Schaeuble told public radio on Thursday. “More time is not a solution to the problems,” Schaeuble told SWR radio. “More time would, in case of doubt, mean more money” and the eurozone had already gone to its very limits in hammering out the deal with Athens last year, the minister argued. It was not an issue “of being more generous or less generous” but about finding a way for the eurozone as a whole to regain the confidence of the fi-
which was recommended with revised scope of work with rationalized cost of Rs 8550.425 million, he said. The Takhtbai flyover project was also included in the PC-I of the project, he added. However, the commencement of work on the project, he said, depended on the approval by ECNEC and allocation of funds. A durable and effective communications infrastructure is very important for the promotion of trade, tourism, industry and agriculture in Swat and Malakand areas and the Ministry of Communications is carrying out
construction activity on priority basis in these areas where people have suffered great hardships, he added. FOURTH SECTION OF N-50 TO BE COMPLETED NEXT YEAR: The National Highway Authority (NHA) has completed work on three sections of road from Khanozai to D I Khan via Muslim Bagh, Qila Saifullah and Zhob (N50) while the fourth section will be completed by May next year. The NHA has undertaken work on five sections of N-50, including Kuchlac-
Not a solutioN More tiMe for Greece ‘not a solution’: Germany’s schaeuble nancial markets, Schaeuble argued. In a newspaper interview Wednesday, Greek Prime Minister Antonis Samaras called for more time to make spending cuts and reforms to unlock funds to keep the debt-wracked country afloat. “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 told the German daily Bild ahead of talks with Chancellor Angela Merkel in Berlin on Friday. As part of a rescue package with its international creditors, Greece has committed to slashing some 11.5 billion euros ($14.2 billion) from spending over two years from 2013. Samaras reportedly wants to discuss extending that period to four years in his
Pakistan cement exports to Afghanistan plummet
Sales fall with the rise of local unemployment rates: IMF
KARACHI: Pakistan cement exports to Afghanistan have plummeted by 10 percent annually, owing to availability of cheaper Iranian cement there. The Pakistan cement manufacturers claim that the energy crisis and increasing prices of petroleum products have made its product uncompetitive in Afghanistan. Afghanistan has been the steadiest market for the Pakistani cement industry, according to an ARI report Thursday. The U.S. sanctions on Iran had been an impediment for Iranian exports to penetrate in Afghanistan. This allowed Pakistan to benefit with exports to the country growing at a four-year CAGR of 14 percent. The overall cement exports plunged by 9.2 percent YoY to 0.76Mt. Total cement sales in July 2012 were registered at 2.81Mt compared to 2.86Mt last year, depicting a decline of 1.6 percent YoY. The recent pledge of US$16bn at an international donor conference as civilian aid for economic development of Afghanistan is likely to bolster construction activity in the country. This should increase the demand for Pakistani cement in the long run. NNI
ISLAMABAD: The International Monetary Fund (IMF) said that the frequency and size of sales fall with the rise of local unemployment rates and yet the inflation rate for effective prices paid by consumer’s declines significantly with higher unemployment. The IMF latest Study said that this discrepancy can be reconciled by consumers reallocating their expenditures across retailers, a feature of the data and quantify for which the Fund propose a simple model with household shopping effort and store-switching consistent with these stylized facts and document its implications for business cycles and policymakers. The Study argued that both the counterintuitive cyclical behavior of sales prices and the discrepancy between the cyclical changes in posted and paid prices can be accounted for by consumers switching across stores in response to economic conditions. Intuitively, given considerable dispersion of prices across stores in any given time period, a deterioration in local economic conditions should lead some price sensitive consumers to reallocate some of their consumption expenditures toward low-price retailers, thereby lowering the average price paid for any given good. ONLINE
Khanozai-Muslim Bagh section, Muslim Bagh-Qila Saifullah section, Qila Saifullah - Zhob section, Zhob-Mughalkot section and Mughalkot-D.I. Khan section. Work on three sections, including 73-kilometre Kuchlac Khanozai- Muslim Bagh section, 50-km Muslim Bagh-Qila Saifullah section for which financial assistance was given by Asian Development Bank (ADB) and 143-km Mughalkot-D I Khan section, which falls in Khyber Pakhtunkhwa, was completed in 2009. Work on 155-km Qila Saifullah Zhob section is going on with the financial assistance of ADB. Uptill June 2012, it progress was over 55 per cent and its completion date is May 2013. Meanwhile, 78-km Zhob-Mughalkot section of N-50 is at planning stage through ADB funding and work is likely to commence next year.
talks in Berlin and with French President Francois Hollande in Paris on Saturday. Berlin has insisted that there can be no wiggle room for Greece either in terms of the substance of the reforms and cuts it must make or in terms of the time it takes to achieve them. A team of auditors from the socalled Troika — the European Commission, International Monetary Fund and European Central Bank — is due to report next month on whether Greece has done enough to unlock a further tranche of aid to stave off bankruptcy. In his interview on Thursday, the German finance minister said the findings of that report would have to be made public first before deciding the way forward for Greece.
Oil prices drop after recent rally LONDON: Crude oil prices fell Wednesday following recent gains, mirroring events across world stock markets, as traders showed caution ahead of Greek talks, Fed minutes and US energy inventory data. Brent North Sea crude for delivery in October dropped 79 cents to stand at $113.85 a barrel in London midday trade compared with Tuesday’s closing level. New York’s main contract, light sweet crude for October slipped 22 cents to $96.62. Crude oil prices had risen in earlier Asian deals, building on the week’s strong gains, on growing hopes of imminent European Central Bank intervention to ameliorate the eurozone debt crisis. New York crude on Tuesday reached $97.60 a barrel, which was the highest level since May 10. Middle East tensions have also lent support to oil prices in recent days, traders said. In Europe, Greek Prime Minister Antonis Samaras on Wednesday called for more time to make spending cuts and reforms to unlock funds to keep the debtwracked country afloat, two days before Greece’s crunch talks in Germany. Investors were also waiting for the release of minutes from the Federal Reserve’s last monetary policy meeting. AFP
EU hails Russia’s WTO accession BRUSSELS AFP
EU trade commissioner Karel De Gucht on Wednesday hailed Russia’s World Trade Organization entry as a major boost for the recession-threatened European economy. “Today’s WTO accession is a major step for Russia’s further integration into the world economy,” De Gucht said in a statement as Moscow crowned a tortuous 18-year campaign and finally joined the world’s premier free-trade club. De Gucht said that the accession of Russia and its $2.0-trillion economy (1.6 trillion euros) to the Geneva-based trade policing body “will facilitate investment and trade, help to accelerate the modernisation of the Russian economy and offer plenty of business opportunities for both Russian and European companies.” De Gucht said: “I trust that Russia will meet the international trading rules and standards to which it has committed.” The European Union is Russia’s first trading partner and Russia the EU’s third. In 2011, EU imports from Russia totalled 199.5 billion euros, a large proportion being cars or auto parts and medicines, and Russian imports from the EU reached 108.4 billion euros, the bulk of which was oil and gas.
Fish, meat exports surge in July ISLAMABAD APP
Despite decline in overall food trade, the exports of fish and fish preparations increased by 23.83 percent during the first month of the current fiscal year (2012-13) as compared to the same month of last year. However, as compared to the exports of June 2012, the seafood exports in July 2012 witnessed negative growth of 5.20 percent, Pakistan Bureau of Statistics (PBS) reported. The over all exports of fish and fish preparations during the month under review were recorded at US$ 17.769 million against the exports of US$14.350 million in July 2011 and US$18.742 million in June 2012. Export of meat and meat preparations also increased by 31.62 percent and 31.16 percent during July 2012 as compared to the exports of July 2011 and June 2012. The exports of meat and meat preparations reached to US$22.632 million in July 2012 as compared to the exports of US$17.195 million in July 2011 and US$17.255 in June 2012, the data revealed. The other food items that witnessed increase in exports during July 2012 included spices, exports of which increased by 2.70 percent as compared to the exports of July 2011. However, as compared to the exports of June 2011, the export of spices also declined by 17.39 percent. Exports of sugar increased by 100 percent and 51.55 percent in July 2012 as compared to the exports of July 2011 and June 2012, respectively, the data revealed.
spain to ease liquidation of troubled banks MADRID AFP
Spain will empower its banking authorities to swoop in on lenders that appear to be heading to trouble and if necessary liquidate them, Spanish media said Thursday. The new legislation, reportedly to be passed by government ministers either this Friday or on August 31, was leaked to the leading daily El Pais and the business paper Expansion. Aimed at preventing new banking catastrophes, it gives the Bank of Spain and the state-backed Fund for Orderly Bank Restructuring (FROB) new powers to in-
tervene before crises erupt. Spain’s eurozone partners agreed in June to lend up to 100 billion euros ($124 billion) to salvage the nation’s banks, buckling under record bad loans built up since a 2008 property crash. Eurozone powers agreed the loan in return for a list of conditions drawn up in a June 20 memorandum of understanding. The new laws aim to comply with those demands. The Bank of Spain could intervene early even in a bank that complies with liquidity and solvency requirements, if there is objective evidence that it cannot continue to meet those standards, the papers said.
The central bank would have extensive powers to demand that the suspect bank provide an action plan within 10 days, agree a debt restructuring plan with creditors or fire the management. The FROB would be in charge of the restructuring or “orderly resolution” of banks, with powers to liquidate those entities it considers to be non-viable and unable to repay public money in a reasonable time frame. According to Expansion, already nationalised banks would be first in line for the new treatement, except for those whose liquidation would present “systemic risk”, an allusion to Bankia. Non-viable banks may be placed in
bankruptcy or subjected to a resolution plan by the FROB. A FROB resolution plan would have to include a valuation of the lender, the method to be used to dispose of the bank, and the financing required by the Deposit Guarantee Fund. The FROB has three options to dispose of a bank, said Expansion: Sell the business; transfer its assets and liabilities to a “bridge bank”; or cede them to an asset management company. The new legislation foresees the creation of a “bad bank” to pool troubled banks’ bad assets and also a “bridge bank” to manage healthy assets for up to five years until a buyer can be found, the reports said. Whether a bank is restruc-
tured or liquidated, investors in the lender would suffer, the reports said. Shareholders and subordinated creditors would have to suffer losses in case of restructuring or liquidations under the new law, Expansion said, complying with a condition set by the eurozone. Such a requirement would hurt many ordinary customers who were pursuaded by their banks to invest in preference shares without fully understanding the risks, Expansion said. Three nationalised banks — Bankia, CatalunyaCaixa and NovaGalicia — alone had 150,000 such customers with a total investment of 4.5 billon euros in preference shares, Expansion said.
PRO 24-08-2012_Layout 1 8/24/2012 1:05 AM Page 2
Business 02 BULLS ALL FRESH AND VIVACIOUS
after Eid holidays Kse goes up 80 points, amid strong valuations in earning announcement KARACHI
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STAFF REPORT
HE bulls kept dominating Karachi stocks market on Tuesday with benchmark, KSE 100-share index gaining 80.47 points. The day saw the index closing up by 0.54 percent at 15,080.55 points against 15,000.08 points of last week. Pakistan Stocks closed bullish amid strong valuations in the earning announcement session at KSE after strong recovery in global commodities, said Abdul Azeem, an analyst at InvestCap. On Wednesday, the trading volumes at the ready-counter were recorded higher at 222.195 million shares against 96.743 million shares of the previous day. The trading value increased to Rs 5.464 billion compared to Rs 2.538 billion of the previous session. The intraday high and low, respectively, stood at 15,101.12 and 15,000.08 points. He
Indonesia has eyes on our clothes and jewelry ISLAMABAD: Ms Ir Sharmila, Induk Koperasi Wanita Pengusaha Indonesia (Indonesian Women Entrepreneurs Parent Cooperative) Chairman accompanied by two women entrepreneurs called on Pakistan Ambassador to Indonesia Sanaullah on Thursday and discussed measures to improve trade and commercial relations between Indonesia and Pakistan. According to a message received here from Jakarta (Indonesia), Sharmila, who is also an active member of Golkar Party, agreed with the Ambassador’s suggestion to participate in the Pakistan Expo 2012 being held in Karachi in the first week of October. She said that she would undertake a 20member delegation of women entrepreneurs to Karachi and other cities of country. The delegation will mainly focus on the garment industry as well as jewellery, she remarked. She requested that the embassy might kindly arrange meetings for the delegation with Pakistani women entrepreneurs and government officials responsible for exports from Pakistan. Ambassador Sanaullah re-assured them that during their stay in Pakistan, their meetings with all the relevant business women associations and reliable exporters would be arranged. APP
added that the renewed foreign interest, higher local POL prices, hopes for revival of gas supply to fertilizer units in the country played a catalyst role in bullish sentiments despite concerns for political backlash on judicial decisions. The market capitalization increased to Rs 3.844 trillion from Rs 3.827 tril-
lion a day earlier. Of the total 310 traded scrips, 190 gained, 98 lost and 22 finished as unchanged. The free-float KSE30 index also gained 24.96 points to close at 12,902.88 points against the previous 12,877.92 points. Lafarge Pakistan was the day’s volume leader counting its traded shares at 39.419 million with the opening and closing rates standing at Rs 5.27 and Rs 5.70, followed by Karachi Electricity Supply Corporation (K.E.S.C), Fauji Cement, D.G.K Cement and Pace Pakistan Limited with turnover of 24.135 million, 22.298 million, 16.902 million and 15.009 million shares respectively. On the future market, the turnover remains higher by over 5 million shares to 14.082 million against 9.157 million shares of last working day. The Bata Pakistan Limited and Siemens Pakistan, up Rs 39.48 and Rs 15.01, led highest price gainers while, Colgate Palmolive and Shezan Inter, down Rs 56.25 and Rs 10.20 respectively, led the losers.
AFP
Russia on Thursday admitted that a poor harvest will force the world’s third-largest wheat exporter to “considerably” cut its foreign deliveries despite worrying spikes in global food prices. But Agriculture Minister Nikolai Fyodorov stressed that he firmly opposed a grain export ban like the one imposed two years ago and insisted that some shipments to key clients such as Egypt would still be made. “Unfortunately, our forecasts are changing literally by the day,” Fyodorov told the state’s Vesti 24 news channel. “At the moment, the trend is not very good,” he added. “Obviously, our exports and other things like reserves will be slightly lower — considerably lower.” Fyodorov said Russia went into
COMPANY OPEN Bata (Pak) Limited 789.60 Siemens Pakistan 884.99 Exide (PAK) XD 230.88 Atlas Battery Ltd. 256.86 Pak Gum & Chemical139.00
HIGH 829.08 910.00 242.42 267.90 145.95
LOW 780.00 900.00 232.50 256.86 144.98
CLOSE 829.08 900.00 242.42 266.06 145.95
CHANGE 39.48 15.01 11.54 9.20 6.95
TURNOVER 1,150 550 19,700 21,100 1,500
1510.00 230.60 370.00 149.00 219.90
1440.00 228.38 340.00 144.00 215.00
1440.00 229.80 346.00 145.43 215.52
-56.25 -10.20 -8.90 -5.07 -4.48
400 600 1,800 1,300 1,600
5.76 6.73 6.95 50.70 2.90
5.27 5.57 6.56 49.40 1.99
5.70 6.67 6.85 50.47 2.88
0.43 0.94 0.35 1.15 0.98
39,419,500 24,135,000 22,298,500 16,902,500 15,009,500
Major Losers Colgate Palmolive Shezan Inter. Mithchells Fruit Philip Morris Pak. National Foods
1496.25 240.00 354.90 150.50 220.00
Volume Leaders Lafarge Pakistan K.E.S.C. Fauji Cement D.G.K.Cement Pace (Pak) Ltd.
5.27 5.73 6.50 49.32 1.90
Interbank Rates US Dollar UK Pound Japanese Yen Euro
94.6866 150.3244 1.2051 118.8885
Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
BUY
SELL
94.15 117.56 148.77 1.1890 94.22 11.98 25.58 24.95 97.67
94.95 118.63 150.08 1.1994 95.56 12.15 25.78 25.23 99.98
CORPORATE CORNER
Tourism to Spain’s rescue? spain enjoys record tourist numbers in July MADRID AFP
Holidaymakers headed to recession-hit Spain in record numbers in July, official data showed Wednesday, propelled in particular by a boom in the number of German tourists. Foreign tourist numbers surged by 328,000, or 4.4 percent, from last year to an unprecedented 7.7 million in July, said a tourism survey released by the government. Tourism is crucial to the Spanish economy, accounting for 10 percent of gross domestic product. A surge in the number of German tourists packing their bags for Spain was mostly responsible for the gains, but numbers were also up sharply from France, the United States, Portugal and the Nordic nations. But despite British Prime Minister David Cameron and Deputy Prime Minister Nick Clegg taking their holidays in Spain, overall British tourist arrivals stagnated, rising just 0.5 percent. Some 1.76 million British tourists came to Spain in July, still making up the biggest single share — 22.9 percent of the total. The most popular destination for Britons was the Balearic islands, which include Majorca, Minorca and Ibiza.
Tourism numbers from Germany surged by 9.7 percent to 1.18 million, accounting for 15.2 percent of the total. “It was the main driver of the increase for the month,” the survey said. French holidaymaker arrivals were also a major factor, with numbers up by 7.7 percent accounting for 16.5 percent of the total. Among other nations, tourist numbers surged from the United States by 27 percent, from Portugal by 14.7 percent and from Nordic countries including Sweden, Norway, Finland and Denmark by 14.5 percent. The favourite region was northeastern Spain’s Catalonia, whose capital is Barcelona, with tourist numbers up by nine percent from a year earlier to more than two million, more than a quarter of the national total. Spain’s economy is in engulfed in the second recession in three years with unemployment at 24.6 percent — the highest in the industrialised world — and the banking sector in crisis. As the world’s fourth biggest tourism destination, Spain hopes to leverage the industry to keep its economy going. Foreign tourists are awaited with even more interest this year after the tourism industry warned in July that summer bookings by Spaniards.
Russia to ‘considerably’ cut grain exports amid drought MOSCOW
Major Gainers
the year expecting to match the 2011 output level of 94 million tonnes of grain. An early winter frost quickly put that target out of reach, with drought now taking its toll. The latest cut in forecast brought the annual output level down close to 75 million tonnes — just five million tonnes higher that the annual domestic consumption mark and one making any exports extremely risky. “We started the year expecting — hoping for — last year’s level,” said the minister. “Until a few days ago, we were forecasting 75-80 million tonnes. But today, we should probably stop talking about 80 million tonnes. We should be talking more about a figure closer to 75 million tonnes,” Fyodorov said. He called ongoing drought conditions in Russia’s southern farming region “abnormal” and tried to calm consumers by noting that two special
state reserves held some 23 million tonnes of grain for emergency situations. “This figure does not scare us at all,” he said of the 75 million tonne forecast. “In the drought-hit, dangerous and difficult year of 2010, our volume was 60 million tonnes.” Russia that year temporarily halted all grain exports in a move experts said contributed to the social unrest in the Middle East and northern Africa that eventually developed into the Arab Spring revolts. But the latest drought conditions are also putting a strain on the Russian economy and leading to price rises that could worry Putin in a year of the largest political protests on the streets of Moscow since Soviet times. Putin had strongly backed the 2010 grain export ban as prime minister but has not mentioned the idea since returning to a third presidential term
in May. Russia’s farmers have also complained that turmoil on European markets was making it difficult to access loans necessary for making long-term investments needed to upgrade to more modern and efficient production methods. The country’s output still recovered quickly from the heavy drought year of 2010 and brought it farmers back out onto the global markets en force. The US Department of Agriculture has put Russia’s wheat exports for the 2011-2012 season at about 21 million tonnes. It predicts that figure to fall to 11 million tonnes in this harvest year. Fyodorov for his part said Russian consumers had little to worry about because the country was certain to remain self-sufficient this year. “The nation and our people are protected 100 percent,” the minister told state television.
The Pearl Continental Hotel Karachi, and Hashoo Group held a night of Sufi Music Qawwali by Fareed Ayaz, Abu Mohammad & Brothers at its premises. Picture show PCHK General Manager M.Azeem Qureshi, Director Sales and Marketing Naveed Ishtiaq other sales team members.
Honorary Consul for Republic of Belarus in Sindh and Tabani Group of Companies Vice Chairman Abdul Rauf Tabani paying courtesy call to Prime Minister, Raja Pervez Ashraf at the Prime Minister House.
Cathay Pacific Group releases interim results LAHORE: The Cathay Pacific Group reported an attributable loss of HK$935 million for the first six months of 2012. This compares to the profit of HK$2,808 million in the first half of 2011.
ICCI whines about POL, CNG prices ISLAMABAD: While rejecting the government’s decision of increasing oil prices, Islamabad Chamber of Commerce and Industry (ICCI) has stressed upon the government to reduce POL and CNG rates immediately to facilitate industry and general masses. ICCI President Yassar Sakhi Butt expressed his apprehension over massive hike in POL prices and said that Government has again failed to honor its promise as Adviser to the Prime Minister on Petroleum and Natural Resources had announced to keep POL prices unchanged for the next 15 days. ONLINE
Friday, 24 August, 2012