Friday, 24 August, 2012

EU hails Russia’s

WTO accessionBRUSSELS

AFP

EU trade commissioner Karel De Guchton Wednesday hailed Russia’s WorldTrade Organization entry as a major boostfor the recession-threatened Europeaneconomy. “Today’s WTO accession is amajor step for Russia’s further integrationinto the world economy,” De Gucht said ina statement as Moscow crowned a tortu-ous 18-year campaign and finally joinedthe world’s premier free-trade club. DeGucht said that the accession of Russiaand its $2.0-trillion economy (1.6 trillioneuros) to the Geneva-based trade policingbody “will facilitate investment and trade,help to accelerate the modernisation ofthe Russian economy and offer plenty ofbusiness opportunities for both Russianand European companies.” De Gucht said:“I trust that Russia will meet the interna-tional trading rules and standards towhich it has committed.” The EuropeanUnion is Russia’s first trading partner andRussia the EU’s third. In 2011, EU im-ports from Russia totalled 199.5 billioneuros, a large proportion being cars orauto parts and medicines, and Russianimports from the EU reached 108.4 billioneuros, the bulk of which was oil and gas.

Fish, meat exportssurge in July

ISLAMABAD

APP

Despite decline in overall food trade, theexports of fish and fish preparations in-creased by 23.83 percent during the firstmonth of the current fiscal year (2012-13)as compared to the same month of lastyear. However, as compared to the ex-ports of June 2012, the seafood exportsin July 2012 witnessed negative growthof 5.20 percent, Pakistan Bureau of Sta-tistics (PBS) reported. The over all ex-ports of fish and fish preparations duringthe month under review were recorded atUS$ 17.769 million against the exports ofUS$14.350 million in July 2011 andUS$18.742 million in June 2012. Exportof meat and meat preparations also in-creased by 31.62 percent and 31.16 per-cent during July 2012 as compared to theexports of July 2011 and June 2012. Theexports of meat and meat preparationsreached to US$22.632 million in July2012 as compared to the exports ofUS$17.195 million in July 2011 andUS$17.255 in June 2012, the data re-vealed. The other food items that wit-nessed increase in exports during July2012 included spices, exports of whichincreased by 2.70 percent as comparedto the exports of July 2011. However, ascompared to the exports of June 2011,the export of spices also declined by17.39 percent. Exports of sugar in-creased by 100 percent and 51.55 per-cent in July 2012 as compared to theexports of July 2011 and June 2012, re-spectively, the data revealed.

MADRID

AFP

Spain will empower its banking authori-ties to swoop in on lenders that appear tobe heading to trouble and if necessary liq-uidate them, Spanish media said Thurs-day.

The new legislation, reportedly to bepassed by government ministers eitherthis Friday or on August 31, was leaked tothe leading daily El Pais and the businesspaper Expansion.

Aimed at preventing new banking ca-tastrophes, it gives the Bank of Spain andthe state-backed Fund for Orderly BankRestructuring (FROB) new powers to in-

tervene before crises erupt.Spain’s eurozone partners agreed in

June to lend up to 100 billion euros ($124billion) to salvage the nation’s banks,buckling under record bad loans built upsince a 2008 property crash.

Eurozone powers agreed the loan inreturn for a list of conditions drawn up ina June 20 memorandum of understand-ing. The new laws aim to comply withthose demands.

The Bank of Spain could interveneearly even in a bank that complies withliquidity and solvency requirements, ifthere is objective evidence that it cannotcontinue to meet those standards, the pa-pers said.

The central bank would have exten-sive powers to demand that the suspectbank provide an action plan within 10days, agree a debt restructuring plan withcreditors or fire the management.

The FROB would be in charge of therestructuring or “orderly resolution” ofbanks, with powers to liquidate those en-tities it considers to be non-viable andunable to repay public money in a reason-able time frame.

According to Expansion, already na-tionalised banks would be first in line forthe new treatement, except for thosewhose liquidation would present “sys-temic risk”, an allusion to Bankia.

Non-viable banks may be placed in

bankruptcy or subjected to a resolutionplan by the FROB. A FROB resolutionplan would have to include a valuation ofthe lender, the method to be used to dis-pose of the bank, and the financing re-quired by the Deposit Guarantee Fund.

The FROB has three options to dis-pose of a bank, said Expansion: Sell thebusiness; transfer its assets and liabilitiesto a “bridge bank”; or cede them to anasset management company.

The new legislation foresees the cre-ation of a “bad bank” to pool troubledbanks’ bad assets and also a “bridgebank” to manage healthy assets for up tofive years until a buyer can be found, thereports said. Whether a bank is restruc-

tured or liquidated, investors in thelender would suffer, the reports said.

Shareholders and subordinated cred-itors would have to suffer losses in caseof restructuring or liquidations under thenew law, Expansion said, complying witha condition set by the eurozone.

Such a requirement would hurt manyordinary customers who were pursuadedby their banks to invest in preferenceshares without fully understanding therisks, Expansion said.

Three nationalised banks — Bankia,CatalunyaCaixa and NovaGalicia — alonehad 150,000 such customers with a totalinvestment of 4.5 billon euros in prefer-ence shares, Expansion said.

spain to ease liquidation of troubled banks

ISLAMABAD

APP

THE National HighwayAuthority plans to spendRs 8550.425 million onimprovement andwidening of Nowshehra-Chitral Highway (N-45).

“Improvement and widening of Chak-dara-Timergrah-Dir-Chitral (141 km)section” is a new project which will com-plete left over sections of the project“improvement of N-45 for dualisation,rehabilitation and reconstruction, whichwas undertaken in 2006 at the cost of Rs2399 million,” a source in the Ministryof Communications told APP on Thurs-day. Regarding the new project globalPC-I worth Rs 9202.488 mln was dis-cussed by Central Development Work-ing Party (CDWP) in October 2011,

which was recommended with revisedscope of work with rationalized cost ofRs 8550.425 million, he said.

The Takhtbai flyover project wasalso included in the PC-I of the project,he added. However, the commence-ment of work on the project, hesaid, depended on the ap-proval by ECNEC and allo-cation of funds.

A durable and effec-tive communicationsinfrastructure is veryimportant for the pro-motion of trade,tourism, industry andagriculture in Swatand Malakandareas and the Min-istry of Commu-nications iscarrying out

construction activity on priority basis inthese areas where people have sufferedgreat hardships, he added.FOURTH SECTION OF N-50 TO BECOMPLETED NEXT YEAR: The Na-

tional Highway Authority (NHA)has completed work on

three sections of roadfrom Khanozai to D I

Khan via MuslimBagh, Qila Saiful-lah and Zhob (N-50) while thefourth sectionwill be com-pleted by May

next year.The NHA has

undertaken workon five sectionsof N-50, includ-ing Kuchlac-

Khanozai-Muslim Bagh section, MuslimBagh-Qila Saifullah section, Qila Saiful-lah - Zhob section, Zhob-Mughalkot sec-tion and Mughalkot-D.I. Khan section.

Work on three sections, including73-kilometre Kuchlac Khanozai- MuslimBagh section, 50-km Muslim Bagh-QilaSaifullah section for which financial as-sistance was given by Asian Develop-ment Bank (ADB) and 143-kmMughalkot-D I Khan section, which fallsin Khyber Pakhtunkhwa, was completedin 2009.

Work on 155-km Qila Saifullah -Zhob section is going on with the finan-cial assistance of ADB. Uptill June 2012,it progress was over 55 per cent and itscompletion date is May 2013.

Meanwhile, 78-km Zhob-Mughalkotsection of N-50 is at planning stagethrough ADB funding and work is likelyto commence next year.

EXPANDING THE PATH TO RECOVERYnHa to spend rs 8550.425m on widening of n-45

Sales fall with the rise of localunemployment rates: IMFISLAMABAD: The International Monetary Fund(IMF) said that the frequency and size of sales fall withthe rise of local unemployment rates and yet the infla-tion rate for effective prices paid by consumer’s de-clines significantly with higher unemployment. TheIMF latest Study said that this discrepancy can be rec-onciled by consumers reallocating their expendituresacross retailers, a feature of the data and quantify forwhich the Fund propose a simple model with house-hold shopping effort and store-switching consistentwith these stylized facts and document its implicationsfor business cycles and policymakers. The Study ar-gued that both the counterintuitive cyclical behavior ofsales prices and the discrepancy between the cyclicalchanges in posted and paid prices can be accountedfor by consumers switching across stores in responseto economic conditions. Intuitively, given consider-able dispersion of prices across stores in any giventime period, a deterioration in local economic condi-tions should lead some price sensitive consumers toreallocate some of their consumption expenditurestoward low-price retailers, thereby lowering the aver-age price paid for any given good. ONLINE

Pakistan cement exportsto Afghanistan plummetKARACHI: Pakistan cement exports toAfghanistan have plummeted by 10 percent annu-ally, owing to availability of cheaper Iranian ce-ment there. The Pakistan cement manufacturersclaim that the energy crisis and increasing prices ofpetroleum products have made its product uncom-petitive in Afghanistan. Afghanistan has been thesteadiest market for the Pakistani cement industry,according to an ARI report Thursday. The U.S.sanctions on Iran had been an impediment forIranian exports to penetrate in Afghanistan. Thisallowed Pakistan to benefit with exports to thecountry growing at a four-year CAGR of 14 percent.The overall cement exports plunged by 9.2 percentYoY to 0.76Mt. Total cement sales in July 2012 wereregistered at 2.81Mt compared to 2.86Mt last year,depicting a decline of 1.6 percent YoY. The recentpledge of US$16bn at an international donor con-ference as civilian aid for economic development ofAfghanistan is likely to bolster construction activityin the country. This should increase the demand forPakistani cement in the long run. NNI

Oil prices drop after recent rally

LONDON: Crude oil prices fell Wednesday fol-lowing recent gains, mirroring events across worldstock markets, as traders showed caution ahead ofGreek talks, Fed minutes and US energy inventorydata. Brent North Sea crude for delivery in Octo-ber dropped 79 cents to stand at $113.85 a barrelin London midday trade compared with Tuesday’sclosing level. New York’s main contract, lightsweet crude for October slipped 22 cents to$96.62. Crude oil prices had risen in earlier Asiandeals, building on the week’s strong gains, ongrowing hopes of imminent European CentralBank intervention to ameliorate the eurozone debtcrisis. New York crude on Tuesday reached $97.60a barrel, which was the highest level since May 10.Middle East tensions have also lent support to oilprices in recent days, traders said. In Europe,Greek Prime Minister Antonis Samaras onWednesday called for more time to make spendingcuts and reforms to unlock funds to keep the debt-wracked country afloat, two days before Greece’scrunch talks in Germany. Investors were also wait-ing for the release of minutes from the Federal Re-serve’s last monetary policy meeting. AFP

BERLIN

AFP

Giving Greece more time to implementnecessary structural reforms and auster-ity measures would not solve its severeproblems, German Finance MinisterWolfgang Schaeuble told public radio onThursday. “More time is not a solutionto the problems,” Schaeuble told SWRradio. “More time would, in case ofdoubt, mean more money” and the euro-zone had already gone to its very limitsin hammering out the deal with Athenslast year, the minister argued.

It was not an issue “of being moregenerous or less generous” but aboutfinding a way for the eurozone as awhole to regain the confidence of the fi-

nancial markets, Schaeuble argued. In a newspaper interview Wednes-

day, Greek Prime Minister AntonisSamaras called for more time to makespending cuts and reforms to unlockfunds to keep the debt-wracked countryafloat.

“All that we want is a little ‘breathingspace’ to revive the economy quickly andraise state income. More time does not

automatically mean more money,” Sama-ras told the German daily Bild ahead oftalks with Chancellor Angela Merkel inBerlin on Friday. As part of a rescuepackage with its international creditors,Greece has committed to slashing some11.5 billion euros ($14.2 billion) fromspending over two years from 2013.

Samaras reportedly wants to discussextending that period to four years in his

talks in Berlin and with French Presi-dent Francois Hollande in Paris on Sat-urday. Berlin has insisted that there canbe no wiggle room for Greece either interms of the substance of the reformsand cuts it must make or in terms of thetime it takes to achieve them.

A team of auditors from the so-called Troika — the European Commis-sion, International Monetary Fund andEuropean Central Bank — is due to re-port next month on whether Greece hasdone enough to unlock a further trancheof aid to stave off bankruptcy.

In his interview on Thursday, theGerman finance minister said the find-ings of that report would have to bemade public first before deciding theway forward for Greece.

Not a solutioNMore tiMe for Greece ‘not asolution’: Germany’s schaeuble

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Tourism to Spain’s rescue?

02

Friday, 24 August, 2012

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERBata (Pak) Limited 789.60 829.08 780.00 829.08 39.48 1,150Siemens Pakistan 884.99 910.00 900.00 900.00 15.01 550Exide (PAK) XD 230.88 242.42 232.50 242.42 11.54 19,700Atlas Battery Ltd. 256.86 267.90 256.86 266.06 9.20 21,100Pak Gum & Chemical139.00 145.95 144.98 145.95 6.95 1,500

Major LosersColgate Palmolive 1496.25 1510.00 1440.00 1440.00 -56.25 400Shezan Inter. 240.00 230.60 228.38 229.80 -10.20 600Mithchells Fruit 354.90 370.00 340.00 346.00 -8.90 1,800Philip Morris Pak. 150.50 149.00 144.00 145.43 -5.07 1,300National Foods 220.00 219.90 215.00 215.52 -4.48 1,600

Volume Leaders

Lafarge Pakistan 5.27 5.76 5.27 5.70 0.43 39,419,500K.E.S.C. 5.73 6.73 5.57 6.67 0.94 24,135,000Fauji Cement 6.50 6.95 6.56 6.85 0.35 22,298,500D.G.K.Cement 49.32 50.70 49.40 50.47 1.15 16,902,500Pace (Pak) Ltd. 1.90 2.90 1.99 2.88 0.98 15,009,500

Interbank RatesUS Dollar 94.6866UK Pound 150.3244Japanese Yen 1.2051Euro 118.8885

Dollar EastBUY SELL

US Dollar 94.15 94.95Euro 117.56 118.63Great Britain Pound 148.77 150.08Japanese Yen 1.1890 1.1994Canadian Dollar 94.22 95.56Hong Kong Dollar 11.98 12.15UAE Dirham 25.58 25.78Saudi Riyal 24.95 25.23

Australian Dollar 97.67 99.98

Business

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 Groupreleases interim resultsLAHORE: The Cathay Pacific Group reported an attribut-able loss of HK$935 million for the first six months of2012. This compares to the profit of HK$2,808 million inthe first half of 2011.

CORPORATE CORNER

KARACHI

STAFF REPORT

THE bulls kept dominatingKarachi stocks marketon Tuesday withbenchmark, KSE1 0 0 - s h a r eindex gaining

80.47 points. The day sawthe index closing up by0.54 percent at15,080.55 pointsagainst 15,000.08points of last week.Pakistan Stocks closedbullish amid strong val-uations in the earning an-nouncement session at KSEafter strong recovery in global commodi-ties, said Abdul Azeem, an analyst at In-vestCap. On Wednesday, the tradingvolumes at the ready-counter wererecorded higher at 222.195 millionshares against 96.743 millionshares of the previous day. Thetrading value increased to Rs5.464 billion compared to Rs2.538 billion of the previoussession. The intraday high andlow, respectively, stood at15,101.12 and 15,000.08 points. He

added that the renewed foreign interest, higherlocal POL prices, hopes for revival of gas supplyto fertilizer units in the country played a cata-lyst role in bullish senti-ments despite concernsfor political backlash onjudicial decisions.

The market capitaliza-tion increased to Rs 3.844trillion from Rs 3.827 tril-

lion a day earlier. Of the total 310 traded scrips,190 gained, 98 lost and 22 finished as un-

changed. The free-float KSE-30 index also gained 24.96points to close at 12,902.88points against the previous12,877.92 points. LafargePakistan was the day’s vol-

ume leader counting itstraded shares at 39.419 mil-

lion with the opening and clos-ing rates standing at Rs 5.27 andRs 5.70, followed by KarachiElectricity Supply Corporation(K.E.S.C), Fauji Cement, D.G.K

Cement and Pace Pakistan Limitedwith turnover of 24.135 million,22.298 million, 16.902 million and15.009 million shares respectively.

On the future market, theturnover remains higher by over 5

million shares to 14.082 millionagainst 9.157 million shares oflast working day.

The Bata Pakistan Limitedand Siemens Pakistan, up Rs39.48 and Rs 15.01, led high-est price gainers while, Col-

gate Palmolive and ShezanInter, down Rs 56.25 and

Rs 10.20 respectively,led the losers.

BULLS ALL FRESH AND VIVACIOUSafter Eid holidays Kse goes up 80 points, amid strong valuations in earning announcement

MOSCOW

AFP

Russia on Thursday admitted that apoor harvest will force the world’sthird-largest wheat exporter to “con-siderably” cut its foreign deliveriesdespite worrying spikes in globalfood prices.

But Agriculture Minister NikolaiFyodorov stressed that he firmly op-posed a grain export ban like the oneimposed two years ago and insistedthat some shipments to key clientssuch as Egypt would still be made.

“Unfortunately, our forecasts arechanging literally by the day,” Fyo-dorov told the state’s Vesti 24 newschannel.

“At the moment, the trend is notvery good,” he added.

“Obviously, our exports andother things like reserves will beslightly lower — considerably lower.”

Fyodorov said Russia went into

the year expecting to match the 2011output level of 94 million tonnes ofgrain. An early winter frost quicklyput that target out of reach, withdrought now taking its toll.

The latest cut in forecast broughtthe annual output level down close to75 million tonnes — just five milliontonnes higher that the annual do-mestic consumption mark and onemaking any exports extremely risky.

“We started the year expecting —hoping for — last year’s level,” saidthe minister.

“Until a few days ago, we wereforecasting 75-80 million tonnes.But today, we should probably stoptalking about 80 million tonnes. Weshould be talking more about a fig-ure closer to 75 million tonnes,” Fy-odorov said.

He called ongoing drought con-ditions in Russia’s southern farmingregion “abnormal” and tried to calmconsumers by noting that two special

state reserves held some 23 milliontonnes of grain for emergency situa-tions.

“This figure does not scare us atall,” he said of the 75 million tonneforecast.

“In the drought-hit, dangerousand difficult year of 2010, our vol-ume was 60 million tonnes.”

Russia that year temporarilyhalted all grain exports in a move ex-perts said contributed to the socialunrest in the Middle East and north-ern Africa that eventually developedinto the Arab Spring revolts.

But the latest drought conditionsare also putting a strain on the Russ-ian economy and leading to pricerises that could worry Putin in a yearof the largest political protests on thestreets of Moscow since Soviet times.Putin had strongly backed the 2010grain export ban as prime ministerbut has not mentioned the idea sincereturning to a third presidential term

in May.Russia’s farmers have also com-

plained that turmoil on Europeanmarkets was making it difficult to ac-cess loans necessary for makinglong-term investments needed toupgrade to more modern and effi-cient production methods.

The country’s output still recov-ered quickly from the heavy droughtyear of 2010 and brought it farmersback out onto the global markets enforce. The US Department of Agri-culture has put Russia’s wheat ex-ports for the 2011-2012 season atabout 21 million tonnes. It predictsthat figure to fall to 11 million tonnesin this harvest year.

Fyodorov for his part said Russ-ian consumers had little to worryabout because the country was cer-tain to remain self-sufficient thisyear. “The nation and our people areprotected 100 percent,” the ministertold state television.

Russia to ‘considerably’ cut grain exports amid drought

Indonesia has eyes onour clothes and jewelry

ISLAMABAD: Ms Ir Sharmila, IndukKoperasi Wanita Pengusaha Indonesia(Indonesian Women Entrepreneurs Par-ent Cooperative) Chairman accompaniedby two women entrepreneurs called onPakistan Ambassador to IndonesiaSanaullah on Thursday and discussedmeasures to improve trade and commer-cial relations between Indonesia andPakistan. According to a message re-ceived here from Jakarta (Indonesia),Sharmila, who is also an active memberof Golkar Party, agreed with the Ambas-sador’s suggestion to participate in thePakistan Expo 2012 being held inKarachi in the first week of October. She said that she would undertake a 20-member delegation of women entrepre-neurs to Karachi and other cities ofcountry. The delegation will mainlyfocus on the garment industry as well asjewellery, she remarked. She requestedthat the embassy might kindly arrangemeetings for the delegation with Pak-istani women entrepreneurs and govern-ment officials responsible for exportsfrom Pakistan. Ambassador Sanaullahre-assured them that during their stay inPakistan, their meetings with all the rele-vant business women associations andreliable exporters would be arranged. APP

MADRID

AFP

Holidaymakers headed to recession-hit Spainin record numbers in July, official data showedWednesday, propelled in particular by a boomin the number of German tourists. Foreigntourist numbers surged by 328,000, or 4.4 per-cent, from last year to an unprecedented 7.7million in July, said a tourism survey releasedby the government. Tourism is crucial to theSpanish economy, accounting for 10 percent ofgross domestic product.

A surge in the number of German touristspacking their bags for Spain was mostly respon-sible for the gains, but numbers were also upsharply from France, the United States, Portu-gal and the Nordic nations. But despite BritishPrime Minister David Cameron and DeputyPrime Minister Nick Clegg taking their holidaysin Spain, overall British tourist arrivals stag-nated, rising just 0.5 percent.

Some 1.76 million British tourists came toSpain in July, still making up the biggest singleshare — 22.9 percent of the total. The most pop-ular destination for Britons was the Balearic is-lands, which include Majorca, Minorca and Ibiza.

Tourism numbers from Germany surged by9.7 percent to 1.18 million, accounting for 15.2percent of the total. “It was the main driver ofthe increase for the month,” the survey said.

French holidaymaker arrivals were also amajor factor, with numbers up by 7.7 percentaccounting for 16.5 percent of the total.

Among other nations, tourist numberssurged from the United States by 27 percent,from Portugal by 14.7 percent and from Nordiccountries including Sweden, Norway, Finlandand Denmark by 14.5 percent.

The favourite region was northeasternSpain’s Catalonia, whose capital is Barcelona,with tourist numbers up by nine percent from ayear earlier to more than two million, morethan a quarter of the national total.

Spain’s economy is in engulfed in the sec-ond recession in three years with unemploy-ment at 24.6 percent — the highest in theindustrialised world — and the banking sectorin crisis. As the world’s fourth biggest tourismdestination, Spain hopes to leverage the indus-try to keep its economy going. Foreign touristsare awaited with even more interest this yearafter the tourism industry warned in July thatsummer bookings by Spaniards.

spain enjoys record tourist numbers in July

ICCI whines about POL, CNG prices

ISLAMABAD: While rejecting the government’s decision ofincreasing oil prices, Islamabad Chamber of Commerce andIndustry (ICCI) has stressed upon the government to reducePOL and CNG rates immediately to facilitate industry andgeneral masses. ICCI President Yassar Sakhi Butt expressedhis apprehension over massive hike in POL prices and saidthat Government has again failed to honor its promise as Ad-viser to the Prime Minister on Petroleum and Natural Re-sources had announced to keep POL prices unchanged for thenext 15 days. ONLINE

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