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Friday, 28 September, 2012
Another lAte cut? Yet another rate cut likely on October 5 as inflation stays in single digit KARACHI
T
ISMAIL DILAWAR
HE economic observers foresee another 50 basis pints rate-cut by the central bank on October 5 on the back of easing inflation which is expected to remain in single-digit during the first half of FY13. The State Bank on Wednesday reported that it would be releasing its monetary policy decision for the next two months on the 5th of next month. The regulator had slashed the discount rate by an unusual 1.5 percent to 10.5 percent from 12 percent in its last monetary policy announcement on August 10. Governor SBP Yasin Anwar had the told the reporters that the move was aimed at giving a relatively higher weight to the state of private sector credit and investment in the economy. “Inflation outlook has improved with a projection of 10.5 percent for FY13 and loans to private sector businesses have sharply decreased,” noted the governor.
And that the central bank’s projection of the previously backbreaking price hike was ranging on average between 10 and 11 percent for whole of the current fiscal year. The analysts, however, tend to partly differ with the central bank on the rate of inflation which they say would remain in single digit during the first half. In the second half, 2HFY13, it would jump back to the double digits. Perhaps basing their outlook on that of the SBP, the analysts predict the regulator further reducing the discount rate for the next couple of months. “A single digit inflation expectation during 1HFY13 coupled with above mentioned falling yields are signaling towards another discount rate cut (50bps) in the upcoming Monetary Policy Statement,” viewed InvestCap analyst Abdul Azeem. The policy rate, he said, would then stand at 10 percent. The monetary easing was also being expected by the secondary market participants as was evident from the current declining trend of the secondary
market yield of different government securities, said the analyst. About a downward trend in inflation, Azeem said the Consumer Price Index (CPI) during the outgoing month of September was expected to remain in the single digit for the third consecutive month. “During Sep-12 we expect CPI to clock in at 9.02 percent,” said the analyst. However, he said, the prices of commodities like oil and wheat may be the major dampeners as they were likely to push the CPI up by 0.97 percent. During the month in review, the local motor fuel prices increased by 10.7 percent and kerosene oil prices went northwards by 8.6 percent against the previous month’s prices. Increase in oil prices influence the over all CPI index, as most commodities’ price react to fluctuation in oil prices. In addition, sharp jump of 10.7 percent was witnessed in the price of wheat floor, and is estimated to propel food group containing the highest weight in the CPI basket up by 1.03 percent. Continuing with the motioned trend of price uptick, the prices of rice, eggs and vegetables also increased by 16.5 percent, 12.57 percent and 8.6 percent, respectively. On the other hand, yearly moving average basis CPI would remain in double digit staying at 10.43 percent for Sep-12. The analyst anticipated that low inflation would prevail during 1HFY13 as the high base impact of CPI was expected to come to a halt by December 2012. “In 2HFY13, however, we see inflation to come yet again in double digit,” Azeem said. Moreover, he said, the upcoming payments of $ 2.3 billion to the IMF were expected to exert pressure on Pak rupee against the greenback. And that any upward movement in international oil prices coupled with flat textile exports are foreseen as another trigger for the widening trade balance that may also negatively impact the stability of rupee.
OGDCL’s 15th annual general meeting on 4th October ISLAMABAD: The Annual General Meeting (AGM) of OGDCL share holders is scheduled to be held by Ch. Muhammad Shafi Arshad Chairman of the Board of Directors and Masood Siddiqui MD/CEO OGDCL alongwith other directors at OGDCL Headquarter, Islamabad on 4th October, 2012 to dispose off ordinary business of the company carried out during the last financial year. The AGM will confirm the minutes of last AGM which was held on 28th September, 2011. This meeting will consider and adopt the audited accounts of the company for the year ended on 30 June 2012 together with the Director’s and auditor’s reports thereon. In the meeting the final cash dividend @ 27.75 per share will be approved for the year ended 30 June 2012 as recommended by the Board of Directors. This is in addition to other three interim cash dividends totaling to 45% i.e. Rs. 4.5 per share already paid during the FY 2011-12. Approval for appointment of Auditors for the year 2012-13 and to fix their remuneration will be accorded and the present auditors M/s KPMG Taseer hadi & Co. Chartered Accountants and M/s M. Yousuf Adil Saleem & Co. Chartered Accountants will stand retired on the conclusion of this meeting. The share transfer books of the Company will remain closed and no transfer of shares will be accepted for registration from Thursday, 27 September 2012 to Thursday 04 October 2012 (both days inclusive). Transfers received in order at the Shrae Registrars office by the close of business on Wednesday, 26th September 2012 will be treated in time for the purpose of payment of final cash dividend, if approved by the Shareholders. STAFF REPORT
Oil rebounds Prices rebound in Asia, Europe woes cap gains SINGAPORE AFP
Oil prices rebounded in Asian trade Thursday on bargain-hunting but escalating turmoil in debt-wracked Greece and Spain limited gains. New York’s main contract, light sweet crude for delivery in November was up 39 cents to $90.37 a barrel in morning trade after closing overnight below $90 a barrel for the first time since August 2. Brent North Sea crude for November delivery gained 29 cents to $110.33. A general strike in Greece and violent demonstrations in Spain to protest against tough austerity measures in exchange for much-needed financial lifelines hammered sentiment. “The main focus for investors globally is once again Europe, with Greece and Spain remaining the main concerns,” said Jason Hughes, head of premium client management at IG Markets Singapore. “Neither seems able to do enough to put its house and mountains of debt in order, and most developments have not appeased markets for long,” he said in a market commentary. “Despite all that has been promised so far by the ECB (European Central Bank) and the moves forward by politicians, we seem to be as far as ever from the end game for the eurozone crisis.” Police in Athens on Wednesday clashed with masked demonstrators during a nationwide strike over a new round of austerity cuts introduced in return for vital EU-IMF loans. Youths threw firebombs, smashed windows and set fire to rubbish on the sidelines of the demonstration near luxury hotels on the capital’s central Syntagma square. Police responded by firing tear gas and stun grenades to disperse a group of around 200 protesters. In Spain, police beat and fired rubber bullets at demonstrators Tuesday as the government prepares to pass its 2013 austerity budget Thursday, with 39 billion euros ($50 billion) in savings, including an anticipated third straight year of salary freezes for civil servants. Adding to Spain’s troubles was news that its recession has deepened “significant pace” in the third quarter of the year.
Asian markets mixed, eurozone fears return HONG KONG AFP
Asian markets were mixed in tentative trade Thursday, with bargain hunters moving in after recent losses while fears over Spanish and Greek debt returned to the fore. As violent anti-austerity protests broke out on the streets of Madrid and Athens, investor concerns mounted that the market euphoria from this month’s central bank stimulus announcements had evaporated. Tokyo was flat by the break, Hong Kong added 0.62 percent, Sydney eased 0.10 percent, Shanghai added 0.50 percent and Seoul was 0.15 percent higher.
After a month of calm that saw the European, US and Japanese central banks unveil plans to boost economic growth, focus has returned to the eurozone sovereign debt crisis, and in particular Spain and Greece. In Madrid thousands of protestors rallied near parliament for a second straight night after as the government prepares to pass its 2013 austerity budget on Thursday, with 39 billion euros ($50 billion) in savings. The trouble came as the country’s borrowing costs broke back above six percent and towards the seven percent danger level seen as unsustainable. With the passage of the budget Spain
should be able to apply for much-needed bailout cash from the European Union, European Central Bank and International Monetary Fund, which will open the door for the ECB to begin buying bonds. However, Prime Minister Mariano Rajoy has refused so far to ask for help until he knows what the conditions are —
a situation that has left dealers in limbo. Meanwhile in Athens police and masked youths clashed during a general strike in protest at a new round of austerity introduced as it tries to unlock the next batch of cash from a rescue package that is needed to pay wages and bills. “The main focus for investors globally
is once again Europe, with Greece and Spain remaining the main concerns,” said Jason Hughes, head of premium client management at IG Markets Singapore. “Neither seems able to do enough to put its house and mountains of debt in order, and most developments have not appeased markets for long,” he said in a market commentary. “Despite all that has been promised so far by the ECB (European Central Bank) and the moves forward by politicians, we seem to be as far as ever from the end game for the eurozone crisis.” Despite troubles the euro managed to hold up. In early trade it bought $1.2874 and 100.02 yen, compared with $1.2870 and 100.04 yen late Wednesday in New York. The dollar changed hands at 77.69 yen, against 77.70 yen. New York’s main contract, light sweet crude for delivery in November was up 39 cents to $90.37 a barrel in morning trade after closing late Wednesday below $90 a barrel for the first time since August 2. Brent North Sea crude for November delivery gained 29 cents to $110.33. Gold was at $1,755.60 at 0200 GMT compared with $1,763.60 on Wednesday.