Wednesday, June 17, 2009

Karachi: The Results of latest draw of P.B. Rs. 200 has been announced in Hyderabad on Monday, June 15, 2009. According to the details, PB # 055127 has won the 1st Prize of Rs. 750,000 , 2nd Prize of Rs. 250,000 is won by to PB# 889419, PB# 668785, PB# 523394, PB# 246922, and PB# 914331.


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Wednesday, June 17, 2009


U.K. unemployment rose less than economists forecast in May and the Bank of England said the risk of a deeper slump has receded, the latest evidence to indicate the economy is past the worst.

Claims for jobless benefits rose 39,300 to 1.54 million in May, the smallest increase since July last year, the Office for National Statistics said today. Economists predicted a gain of 60,000, the median of 28 forecasts in a Bloomberg News survey shows. Separately, the Bank of England said in London “the risk of a continued sharp contraction” has “receded somewhat.”

Signs are mounting that the U.K. economy is recovering from the worst recession since 1979, with manufacturing output rising for a second month in April and services activity expanding for the first time in a year last month. At the same time, the Bank of England said in minutes of its June 4 policy meeting published today it’s too soon to say that its emergency money- printing program is working.

“While the economy may see positive growth at some point later this year, the risk of relapse is still high,” said James Knightley, an economist at ING Financial Markets in London.

A broader measure of unemployment rose 232,000 to 2.26 million in the three months through April, the highest since November 1996, the statistics office said. The Confederation of British Industry expects unemployment to peak in the second quarter of 2010 at 3.03 million, a rate of 9.6 percent, instead of the 3.25 million forecast in April.

(Bloomberg)

Wednesday, June 17, 2009

European stocks fell for a fourth day, the longest streak since the rebound began in March, on concern the global economy will be slow to recover from the recession.

The Dow Jones Stoxx 600 Index of European shares slid 1.2 percent at 12:22 p.m. in London after a three-month, 36 percent rally that drove price-earnings valuations to the highest levels in five years. The Dollar Index was little changed after falling as much as 0.5 percent earlier as futures traders pared bets that the Federal Reserve will raise its target interest rate by year-end. The pound dropped as U.K. unemployment climbed to the highest since 1998.

While U.S. President Barack Obama said “you’re starting to see the engines of the economy turn,” in an interview with Bloomberg News, he also said “it’s going to take a long time” for a full recovery. The jobless rate will continue to climb from its current 25-year high of 9.4 percent to 10 percent as employers balk at taking on new workers, the president said.

“The turn in risk assets, while still relatively modest, is broad enough and deep enough to suggest that the uptrend has stalled,” Greg Gibbs, a currency strategist in Sydney at Royal Bank of Scotland Group Plc, wrote in a note today. “With valuations no longer compelling, more volatile bond markets and economic data more mixed, the investment community is less hurried to extend further into risk assets.”

(Bloomberg)

Wednesday, June 17, 2009

NEW YORK: The US dollar rose broadly on Monday after Russia expressed confidence in the greenback as the world's reserve currency, while concerns about the euro zone economy undermined the euro. The single European currency fell below $1.38 to its lowest level in more than three weeks after the European Central Bank said euro zone banks will probably need to write down another $283 billion.

Speaking on the sidelines of a Group of Eight finance ministers meeting in Italy, Russian Finance Minister Alexei Kudrin said the dollar's role as the world's main reserve currency is unlikely to change in the near future. The comments followed statements from a top Russian central bank official last week that it would cut the share of US Treasuries in its reserves. But Kudrin's comments alleviated concerns that major emerging market countries may be diversifying away from the dollar ahead of a summit of leaders of Brazil, Russia, India and China (BRIC) in Russia on Tuesday.

"Reserve diversification has really come into question given the complete U-turn in the comments from the Russian finance minister," said Kathy Lien, director of currency research at GFT Forex in New York. "We have started the new trading week on a dollar-friendly tone."

The International Monetary Fund on Monday also threw its support behind the US unit, saying the dollar's status as the world's dominant reserve currency is likely to remain. "Markets have been increasingly concerned about the status of the US dollar," said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto. "It's fairly clear to most people there's no alternative."


(BRecorder)

THE RUPEE: rates mixed

Wednesday, June 17, 2009

KARACHI (June 17 2009): The rupee gave up its overnight firmness against dollar on the interbank market on Tuesday, shedding 10 paisa for buying and selling at 81.05 and 81.10, marketmen said. Importers' buying of dollars pushed the rupee lower, and it was most likely that the rupee may show slight weakness versus dollar in the coming days also, they said.

During the second session, the yen jumped broadly after a slide in global stocks boosted caution about the global economy, prompting investors to cut bets on riskier assets. The euro fell sharply versus the yen and hit its lowest level in almost a month against the dollar after the European Central Bank said euro zone banks will probably need to write down another $283 billion.



(BRecorder)


Wednesday, June 17, 2009


YEKATERINBURG: China and Russia sought greater international clout at a summit Tuesday, with China promising a $10 billion loan to Central Asian countries, while Russia challenged the dominance of the US dollar as a global reserve currency. Russia also gave a prominent platform to Iranian President Mahmoud Ahmadinejad amid massive protests in Iran over his bitterly disputed re-election and questions in the West about the vote.

Chinese leader Hu Jintao said China will extend a $10 billion loan to a regional group that also includes Russia and four Central Asian states.

The move adds muscle to China's role in the Shanghai Co-operation Organisation, a six-nation group Russia and China use to counter the Western influence in resource-rich, strategically placed Central Asia. The other members of the organisation Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

The leaders of Afghanistan, Iran, India and Pakistan were also at the table, underscoring Russia and China's reach for regional clout and global influence. Hu said the loan is intended to shore up the struggling economies of its members amid the global financial crisis.

Meanwhile, President Dmitry Medvedev pushed his call for new global reserve currencies to complement the dollar at the summit. ``No currency system can be successful if we have financial instruments denominated in just one currency,' Medvedev said. ``We must strengthen the international financial system not only by making the dollar strong, but also by creating other reserve currencies.'


(BRecorder)p

Wednesday, June 17, 2009

KARACHI: Net foreign investment has declined by 47 percent during the first 11 months of the current fiscal year mainly due to massive outflow of the portfolio investment and poor law and order situation. Net foreign investment comprising foreign direct investment (FDI) and portfolio investment is constantly on the decline due to worsening law and order situation, slow economic activities and global recession.

Net foreign investment has registered a decline of some 2.01 billion dollars during the first 11 months (July-May) of FY09. With current decline, overall net foreign investment has declined to 2.222 billion dollars during July-May of the current fiscal year as compared to 4.23 billion dollars in the same period of FY08.

Massive outflows of portfolio investment have major share in the overall decline in the net foreign investment, while slow privatisation process has also contributed to this trend in a negative way, as during the current fiscal year no new privatisation transaction could take effect.

FDI and portfolio investment have posted a decline of 19.8 percent and 1365 percent respectively during the first 11 months of current fiscal year. FDI reduced to 3.325 billion dollars in July-May of FY09 against 4.147 billion dollars in the corresponding period of FY08, depicting a decrease of 815 million dollars.

With a dip of 1365 percent, portfolio investment stood in a negative position of 1.103 billion dollars during the first 11 months of FY09 as compared to an investment of 87.2 million dollars in the same period of FY08. However, economists said that some 3.325 billion dollars foreign direct investment during the first 11 months is also an encouraging figure despite uncertainty in the country.

They said that FDI inflows are more than expectations, which is a positive sign and it means that foreign investors are still interested in investing in the Pakistan. Inclusive of privatisation proceeds, total private investment shows a decline of 34.20 percent to 2.764 billion dollars during July-May of FY09. Previously it stood at 4.2 billion dollars.

(BRecorder)


KARACHI: In the post budget scenario, the Karachi stock market remained under the tight grip of bears on second consecutive day on Tuesday as well where lacklustre behaviour of investors shrank the day turnover to three month low.

The KSE 100-share Index posted another fresh fall of 1.15 per cent or 80.13 points and closed at 6,872.96 points. Its junior partner the 30-Index shed more 1.24 per cent or 91.69 points and ended at 7,280.78 points.

The day turnover fell to 64.4 million shares, which is three months low, according to M Sohail at Topline Securities. Moreover, the day turnover is about 40 per cent less than a day earlier volume of 106.3 million shares.

The future market saw zero trade and the overall market capitalisation dropped by Rs12 billion to stand at Rs2,041 billion.

Interesting, the overseas investors injected a small tranche of $2.15 million at local bourses in this sluggish trading session, according to NCCPL.

Among the notables, the National Bank, United Bank, Bank of Punjab and Attock Refinery managed to close in the positive territory against closing of majority of the actives in red.

Out of total 265 actives on board, losers outnumbered gainers 191 to 60 with 14 stocks closing unchanged.



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Wednesday, June 17, 2009


KARACHI: The proposed imposition of carbon tax on Compressed Natural Gas (CNG) is technically wrong and completely unjustified, as this is a carbon-free environment-friendly fuel for vehicles.

The CNG Station Owners Association of Pakistan (CSOAP) Chairman, Malik Khuda Bux, said this at a press conference held here on Tuesday.

“If this decision comes into effect from the proposed date of July 1, then it will result in an increase of Rs6 per kg in CNG price as per media reports and may hurt an investment of Rs20 billion in the pipeline,” he stressed.

“The proposed imposition of carbon tax also goes against the government’s participation in the Kyoto Protocol in which the government has agreed to cut vehicular carbon emissions in the country,” according to a statement issued at the press conference.

Khuda Bux demanded of the government to withdraw its decision of imposing this new levy on CNG in the remaining days of the current month. If the government does not do the needful in the given timeframe, the association would issue a strike call as a last resort, he added.

But before they give a strike call, the CNG station owners have already invited the government on table to resolve the issue through dialogue. At the second stage, they would knock the door of the judiciary for justice, he unveiled the strategy and warned to observe strike as the third and the last option.

“We have never gone on strike in the past and resolved all outstanding issues with the government through negotiations. And this time too, if government officials give us time to present our viewpoint we are confident of convincing them that the carbon tax on carbon-free fuel is illogical and unjustified,” the CSOAP chairman said.

At present, the CNG station owners were already paying four per cent Withholding Tax and 16 per cent General Sales Tax to the government and paying in total 25 per cent taxes under different heads to avoid the filing of return and revitalizing the corruption.

The purpose of setting up CNG stations across the country was to make the environment pollution-free. Under the 1994 CNG policy, it was said that CNG would be kept 50 per cent cheaper than the petrol to fulfil the purpose. But every day rising utility prices i.e. gas and electricity was making the CNG business less competitive against petrol pumps.

Khuda Bux further demanded of the government to make CNG at least 40 per cent cheaper than the petrol and save them from falling into default and bankruptcy.

The other menace was change in gas price for CNG stations in 2006-07, as before government was charging the same rate as it was collecting from industrial sector. But change in price made the gas most expensive for CNG stations in the country.

At present, CNG stations were being provided gas at Rs427 per mmbtu as compared to Rs339 per mmbtu for industry and Rs393 for commercial tariffs.




Wednesday, June 17, 2009



LONDON: Oil rose $2 to above $72 a barrel on Tuesday as the dollar slid and US housing data showed a jump in new construction starts and permits.

US crude rose $2.07 cents to $72.69 by 1312 GMT, after trading below $70 when the dollar was stronger. London Brent crude rose $2.11 to $72.35.

“The housing data was quite good, but stock markets are not shooting away just yet,” said trader Robert Montefusco at Sucden Financial. “The dollar is still the main crux of it.”

The dollar fell broadly as higher European shares piqued appetite for currencies seen as higher risk, and lost more ground after the US housing data.

A weaker dollar can strengthen commodity markets by improving the purchasing power of buyers using other currencies. The Commerce Department said on Tuesday US housing starts jumped 17.2 per cent to a seasonally adjusted annual rate of 532,000 units, from April’s revised 454,000 units, and new building permits rose 4 per cent, the biggest advance since June last year.

Iran’s top legislative body ruled out annulling a disputed presidential election that has prompted the biggest street demonstrations since the 1979 Islamic revolution, but said it was prepared for a partial recount.

The world’s fifth-biggest oil exporter has seen three days of the largest and most violent anti-government protests in three decades, though no disruption to Iran’s 2.1 million barrels-per-day exports have been felt.

“We’ve seen a downward spiral over the years in light of sanctions in Iran’s ability to bring projects online. It’s a slow trend that had pretty much been continuously priced in,” said Samuel Ciszuk, analyst at IHS Global Insight in London.

Expectations of an economic recovery drove crude prices to a near eight-month high above $73 a barrel last week. Traders will look out for weekly US government inventory data on Wednesday, which is expected to show a 1.8-million barrel fall in crude oil stocks, a 600,000-barrel rise in gasoline stocks and 900,000 barrel rise in distillate stocks, based on a preliminary Reuters’ poll.

The American Petroleum Institute (API) will issue its report later in the day. With oil rising almost $20 since the end of April, there were concerns that speculation in the market had pushed oil prices up too high, too fast.

OPEC Secretary-General Abdullah al-Badri said too quick a rise in oil prices, could harm a global economic recovery, though a price of $80 a barrel would not stem growth.

The head of the International Monetary Fund, Dominique Strauss-Kahn, also sounded a cautious note, saying on Monday the worst of the global crisis was not yet over.

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ISLAMABAD: The Asian Development Bank (ADB) Board of Directors has approved allocation of $3.4 billion as additional fund to help developing member countries (DMCs) respond to the global economic crisis.

According to an announcement of the ADB here on Tuesday, it has established a $3 billion Countercyclical Support Facility (CSF) that will provide short-term, fast-disbursing loans. It will support DMCs aiming to ramp up fiscal spending to counter the crisis, but lack financial means to do so amid tight global credit conditions and a sharp increase in funding costs.

The CSF, which will be available to DMCs which qualify for loans from ADB’s Ordinary Capital Resources (OCR), will be capped at $500 million per country.

The ADB will also make available a further $400 million to the Asian Development Fund (ADF). This will benefit countries with no access to OCR. ADF resources are provided in the form of concessional loans and grants to low-income DMCs with limited debt repayment capacity.

The additional ADF resources will be used to provide funds to finance key development investments in low-income countries that are among the most fiscally constrained in responding to the crisis.

Conditions for accessing the CSF include a significant slowdown in growth, exports and remittances; fiscal constraints; and difficulty in sourcing finance from international capital markets on favourable terms. DMCs will also need to put in place a specific countercyclical development programme, to be supported by CSF, which includes investment in public infrastructure or a social safety net scheme targeting the poor and vulnerable.

Loans under the new facility will have a five-year tenor, with a three-year grace period, and will cost around 200 basis points above ADB’s financing cost, the pricing that is lower than its special programme loan facility set up to help the region in the wake of the 1997-98 Asian financial crisis.

The ADB plans to increase its lending assistance by more than $10 billion in 2009-2010, bringing total assistance for these two years to about $32 billion. This compares with about $22 billion in 2007-2008. Of the proposed $10 billion increase in lending, $1 billion is committed to supporting trade finance, $3 billion to the CSF and $6 billion to extending loans such as those for infrastructure investment.

The ADB will also expand its crisis-related support through grants for policy analysis and capacity building.



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KARACHI: Atlas Bank has to finalise a merger with Silkbank by July 31 to shore up its capital which currently falls short of the central bank’s minimum capital requirement for banks, people involved in the deal said.

In a notice sent to the Karachi Stock Exchange on Tuesday, Atlas reaffirmed that the merger is on track and the swap ratio in the new entity will be discussed by its board of directors and shareholders once due diligence is completed. It did not say when the matter will be put before the board of directors. Atlas started talks with Silkbank, formerly Saudi Pak Commercial Bank, after its previous deal to merge with KASB Bank collapsed earlier in the year.


Both Atlas and KASB needed to raise their equity to at least Rs5 billion by the end of 2008. This was one of the main reasons behind the merger. While KASB succeeded by merging with its sister concern KASB Capital, a large part of Atlas’ equity was wiped off by its accumulated losses. By the end of first quarter in March, Atlas had equity of Rs3.4 billion.

Silkbank, which was acquired by a consortium of IFC, Bank Muscat, Nomura International and Sinthos Capital last year, also faces the dilemma of equity falling short of SBP’s minimum capital requirement (MCR) for 2008. At the end of first quarter of 2009, it had equity of Rs4bn.

The merger between Atlas and Silkbank will allow both banks to raise capital to over Rs6bn, which all banks must have by December 31, 2009.

Asked if a successful merger is possible, a senior executive involved in the deal said: “We can only hope that it happens because it is in the best interest of both the entities.” Merger of these two smaller banks would result in creation of a larger entity with a wider reach and sufficient capital to guarantee security to the depositors The SBP has been pushing for mergers and acquisitions to consolidate the banking industry. Another such deal, which included takeover of Arif Habib Bank by a consortium led Hussain Lawai is still not finalized.

Lawai’s consortium was supposed to increase authorized capital of the bank to Rs25 billion. Entire transaction was expected to be completed by Feb 28, 2009. After seeing that even the global banking system was in crisis, the SBP revised the MCR for banks in Pakistan.

Now banks are required to have MCR of Rs6bn by end 2009 and then they have to increase it by Rs1bn each year till 2013.


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Wednesday, June 17, 2009

ISLAMABAD: The Advisor to Prime Minister on Finance, Shaukat Tarin, has said that talks with International Monetary Fund (IMF) will be held on June 28 in Dubai to review the economic performance of Pakistan along with budgetary measures taken to increase revenue collection in the next fiscal year before the release of third tranche.

The Advisor said this at the post-budget meeting of Senate standing committee on finance here on Tuesday. Senator Ali Ahmed in the chair. IMF was earlier scheduled to release third tranche of about $850 million on June 30, but later announced to release it in July.

During the talks in Dubai, IMF team will review the measures announced by the government of Pakistan in the 2009-10 budget to enhance revenue collection. The review will pave the way for releasing the third tranche. Pakistan, in April had received $848 million as second instalment of a $7.6 billion loan from the IMF under the standby arrangement.

Tarin informed the committee that the economic managers of the country would brief the IMF team about the fiscal measures taken by Pakistan government to meet IMF targets and the targets set in the budget. He said that Federal Board of Revenue (FBR) would conduct audit of taxpayers, at random, and audit officers would not take away the record of a company in the process of audit.

The senate committee proposed that the Advisor to Prime Minister on Finance should be banned from attending post-budget seminars until the budget is approved by National Assembly. The meeting was told that the Federal Bureau of Revenue (FBR) would amend the Sales Tax Act to cap the powers of the collectors that cause harassment among the taxpayers. The members of the committee strongly criticised the role of finance managers in preparing budget and complained that they had ignored their budget recommendations while finalising the budget proposals for 2009-10. The members asked the chairman to take up the matter with Senate Chairman and Speaker.

The members regretted that they were the people's representatives but their recommendations were not given due consideration to provide relief to the masses during the upcoming financial year 2009-10. The committee also showed reservations over heavy supplementary grants issued during financial year 2008-09, and proposed that the finance division should hold quarterly budget meeting with Senate standing committee on finance to conduct mid-year budget review.


(BRecorder)