Saturday, 4 August, 2012

HONG KONG

APP/AFP

ASIAN markets retreated andthe euro came back underpressure on Friday after theEuropean Central Bank

dashed traders' hopes for strong policyactions to support troubled eurozoneeconomies.

Downbeat earnings reports fromtwo of Japan's biggest electronics firmsalso weighed on the Nikkei, with Sharplosing more than a quarter of its valuein the morning session. Tokyo was 1.62percent lower by the break, Hong Kongshed 1.17 percent, Sydney fell 0.97 per-cent and Seoul eased 0.82 percent whileShanghai was flat.

Markets were deflated by the ECB'sdecision to hold off any concrete movesto support the euro such as bond buy-ing, which many had hoped for afterbank chief Mario Draghi said last weekit would do whatever was needed to savethe euro.

On Thursday he reiterated that theECB was ready to step into the bondmarkets -- but not just yet.

In face of growing pressure, the ECB"may undertake outright open marketoperations of a size adequate to reach itsobjective," he said, but added that thedetails would be worked out "in thecoming weeks".

Whatever the circumstances, Draghisaid it was "pointless" to bet against theeuro. "It stays. It stays. It stays," he in-sisted.

However investors, who had sentglobal markets surging over the pastweek as they factored in some sort of ac-tion, were unimpressed and Spanishborrowing costs bounced back above the

seven percent danger level."The delay in actions may last until

the next ECB meeting (September 6),"said Anthony Lam, strategist at CreditAgricole. "In the meantime, a downbeatmood will continue hanging over themarket."

The let-down came after the US Fed-eral Reserve had said on Wednesdaythat it would take a wait-and-see ap-proach before unveiling any stimulus forthe world's number one economy.

The news rippled around globalmarkets, with London losing 0.88 per-cent, Frankfurt 2.20 percent off andParis 2.68 percent lower while Madridshares plunged 5.16 percent and Milanwas 4.64 percent off.

On Wall Street the Dow fell 0.71 per-cent, the Nasdaq lost 0.36 percent andthe S&P 500 dropped 0.74 percent.

In foreign exchange trade the euro,which tumbled after the ECB announce-ment, remained under pressure inTokyo as investors moved out of riskierassets and into safer bets such as theyen and dollar.

The common unit bought $1.2176and 95.27 yen in early trade, comparedwith $1.2178 and 95.26 yen in New Yorklate Thursday.

It was significantly down from the$1.2250 and 96.12 earlier in Asia beforethe ECB meeting.

The dollar was at at 78.15 yen from78.22 yen.

In Tokyo Sharp shed 30 percent aday after it said losses in the first quar-ter to June almost trebled from last yearas it struggles with the strong yen andweak demand in the key European mar-ket.

Sony also lost around eight percentafter reporting its quarterly loss had

widened while also cutting its full-yearprofit forecast. However, oil prices werehigher. New York's main contract, light

sweet crude for September delivery ad-vanced 35 cents to $87.48 a barrel andBrent North Sea crude for September

delivery was 32 cents higher at $106.22.Gold was at $1,590.80 at 0300 GMT,from $1,602.40 on Thursday.

Asian markets hit by ECB disappointment

Not another

LPG price hike!g Producers raise price

by Rs 19 per kg

KARACHI

APP

Local producers of liquefied petroleum gas(LPG) have increased prices by Rs 19,000per ton in accordance to a rise in its inter-national prices (Saudi Armaco ContractPrice).This was stated by the pattern in chief ofAll Pakistan LPG Distributors AssociationAbdul Hadi Khan here Friday. New pricesare effective from August 3, 2012. He said per kilogram price of LPG hasbeen raised by Rs 19 while 11.8 kg cylinderhas been increased by Rs 224 and price of45.4 kg cylinder went up by Rs 863.Hadi said that in Karachi, LPG will be soldat Rs 118 per kilo, 11.8 kg cylinder at Rs126 and 45.4 kg cylinder at Rs 4,720.In Lahore, the price of LPG will be Rs 123per kg, 11.8 kg cylinder at Rs 1326 and45.4 kg cylinder at Rs 5,100. Similarly, in Khyber Pukhtoonkhwa, LPGwill be available at Rs 128 per kg, 11.8 kgcylinder at Rs 1448 and 45.5 kg cylinder atRs 5,514.In norther areas, Mansehra, FATA, Bat-gram and AJK, price of LPG will be Rs 132per kilo, 11.8 kg cylinder at Rs 1530 and45.4 kg cylinder at Rs 5,877.Hadi alleged that demand for LPG hassurged to 1700 tons per day, but producershave kept their production at 800 tons perday for the last one and a half year. Thereis a need to increase LPG production inthe country on the one hand and reduce itsprices on the other.He feared that LPG sale will decline by 15percent in the country due to this rise andaffect the growth of this industry. This isalso discouraging the investment of bil-lions of rupees in LPG sector, he added.

LAHORE

AGENCIES

Conventional insurance companies canopen window operations of Takaful bytaking benefit from Takaful rules 2012,announced by Securities and ExchangeCommission of Pakistan (SECP).

The Takaful industry will progressrapidly at national level under theerules, said Muhammad Zubair Mughal,Chief Executive Officer of AlHuda Cen-tre of Islamic Banking and Economics,while talking to APP on Friday.

He declared the Takaful Rules 2012a good step for the industry whichwould promote the industry rapidly at

national level and the masses wouldhave an opportunity to fulfill their in-surance needs under Shariah.

"In Pakistan, due to elements of in-terest and gambling in insurance, peo-ple avoid insurance. The PakistanTakaful industry entered into a new eraand the insurance industry will growrapidly by SECP Takaful Rules 2012,"Zubair said.

"The Takaful industry is growingrapidly around the world with 230 com-panies and 13 re-Takaful companieswith a total volume of $11 billion," headded.

Takaful was started in 2005 in Pak-istan when SECP introduced Takaful

Rules 2005 according to which only full-fledged Takaful companies had the per-mission to operate in this regard, fiveTakaful companies came into being dueto efforts of investors of Malaysia,Qatar, Kuwait, UAE, Saudi Arabia andPakistan.

Among the five companies, three aregeneral whereas two are providing serv-ices of Shariah compliance life insur-ance.

Analyzing the insurance industry,he said that there were 37 general insur-ance companies, seven life insurancecompanies; five Takaful and re-Takafulcompanies are operating in Pakistanand now in accordance with the Takaful

Rules 2012, more than 40 insurancecompanies can start a window operationby fulfilling SECP laws and conventionalinsurance companies can be trans-formed into Takaful companies.

He said that there were three typesof business opportunities for the indus-try: 1 people, who do not use insurancedue to interest factor; 2 people who useinsurance by compulsion but they cancome to Islamic insurance when this al-ternative is introduced; and 3 peoplewho do not fall under the category of in-surance as in Pakistan, the penetrationof insurance is less than 1 percent.

These rules are a milestone in thePakistan insurance industry, he added.

Takaful rules 2012, an opportunity for insurance under Shariah

ISLAMABAD

APP

The Islamabad Chamber of Commerce and Indus-try (ICCI) Friday urged the State Bank of Pakistan(SBP) to reduce markup rate by 150 to 200 basispoints in the monetary policy scheduled to be an-nounced on August 10. "The decision to cutmarkup rate to single digit is essential for re-viving the business activities, overcome low-growth scenario, encourage new investmentswhich would ultimately improve the economicgrowth of thecountry," ICCIP r e s i d e n t ,Yassar SakhiButt said in a statement.He was of the view that maintaining mark-up at12 percent by State Bank of Pakistan would fur-ther fuel the non-performing loans and unemploy-ment in private sector. He said that the availabilityof cheaper money to the business doing people is

must to bring down the cost of business in Pakistanas the trade and industry were already facing hugelosses on present level due to high cost of energyand its crisis in the country. He said reduction inbank mark-up rate could encourage fresh invest-ment in the industry which had declined to 13.4percent in FY11, thus reduction in markup ratewould increase employment and exports of the

country in long-term. He was citing the ex-ample of China, where mark-up rate

was 6.56 percent, India 8 per-cent, Sri Lanka 7.75 per-

cent and inBangladesh 7.75

percent against12 percent inPakistan. ICCI

President saidthat the economic meltdown

in recent years had already proved that high policyrate had caused a great harm to economy andwould continue to widen the fiscal deficit.

We need gas!g Textile exporters urge

govt to import gas

FAISALABAD

AGENCIES

Pakistan Textile Exporters Association (PTEA) andthe Pakistan Hosiery Manufacturers Association(PHMA) urged the government here on Friday to im-port gas to bridge the expected supply gap. This was demanded in a joint meeting of PTEA andPHMA held under the chairmanship of Rana ArifTouseef, President PTEA. They said that a regular and efficient supply of gaswas vital for the textile industry as processing, print-ing and finishing of the fabric depended on gas heat-ing. Gas is also an alternative energy source for theindustry in the shortage of electricity and vital base ofproduction, they said. Former Federal Minister and former chairman PTEA,Ch Mushtaq Cheema, Vice chairman PakistanHosiery Manufacturers Association Qamar Aftab,Former Chairman PHMA Dr Khurram Tariq and alarge number of textile exporters were also presenton the occasion.

Bring on the chainsaw!SBP asked to slash key Policy Rate

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02

Saturday, 4 August, 2012

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERUniLever Pak 8300.00 8624.00 8400.00 8444.80 144.80 140Colgate Palmolive 1309.00 1348.99 1244.00 1328.99 19.99 500Mithchells Fruit 347.76 364.95 331.50 364.95 17.19 2,600Siemens Pakistan 796.44 836.26 807.00 811.00 14.56 350Exide (PAK) XD 194.96 204.70 204.70 204.70 9.74 17,200

Major LosersShezan Inter. 272.74 272.00 259.88 262.02 -10.72 1,000Pak Services 150.00 142.50 142.50 142.50 -7.50 200Pak Suzuki Motor 101.07 100.75 96.60 97.38 -3.69 104,500Engro Corporation 92.14 91.50 88.50 88.84 -3.30 2,360,900Cyan Limited 69.00 66.10 66.00 66.00 -3.00 1,500

Volume Leaders

D.G.K.Cement 46.76 46.95 46.21 46.63 -0.13 5,354,500Maple Leaf Cement 6.82 7.00 6.51 6.62 -0.20 3,860,500Bank Al-Falah 18.42 18.45 17.80 17.95 -0.47 3,333,500Hub Power Com 45.17 46.20 45.10 46.08 0.91 3,176,500K.E.S.C. 3.94 3.95 3.60 3.75 -0.19 2,681,500

Interbank RatesUS Dollar 94.4193UK Pound 146.7465Japanese Yen 1.2057Euro 115.9280

Dollar EastBUY SELL

US Dollar 94.30 95.10Euro 116.04 116.91Great Britain Pound 146.75 147.82Japanese Yen 1.1916 1.2002Canadian Dollar 93.81 94.99Hong Kong Dollar 12.00 12.16UAE Dirham 25.63 25.79Saudi Riyal 25.13 25.24Australian Dollar 98.84 101.01

Business

KARACHI

STAFF REPORT

T HE Karachi Stock Exchange’s(KSE) benchmark 100-shareindex on Friday fell by 0.37percent the Pakistan Stocks

closed lower on institutional profit-taking in the earnings announce-ments session at KSE amid cautiousactivity ahead of SBP Policy an-nouncement due next week. This wasviewed by Ahsan Mehanti, Director atArif Habib Investments Limited. Thebenchmark KSE 100-share Index de-clined by 54.24 points, or 0.37 per-cent, to 14, 676.43 points. The indexmoved both sides of the fence by73.62 points, making an intra-dayhigh of 14, 732.87 points and a low of14, 659.25 points. The KSE 30-shareindex dropped 69.16 points, or 0.54percent, to 12, 650.70 points.

Mehanti observed that the activityremained thin despite strong corpo-rate earnings outlook and recovery in

global stocks and commodities. Stocksthat played a major role in driving thebenchmark index down wereD.G.Khan Cement, Maple Leaf Ce-ment, Bank Al-Falah, Hub PowerCompany, Karachi Electricity SupplyCorporation K.E.S.C, Engro Corpora-tion, Jahangir Siddiqui Company,Fauji Fertilizer and Fauji Cement. Atotal of 142 companies’ stocks closedunder selling pressure out of total 252

companies’ stocks that were active onthe board. However, stocks of 96 com-panies managed to close in positiveterritory while 14 companies’ stocksclosed unchanged. He added that theconcerns for rising circular debt inPakistan Energy sector, revenue lossto fertilizer sector on gas supply wor-ries and pending CGT collection issuesplayed a catalyst role in bearish senti-ment at KSE. Moreover, about half a

dozen stocks closed with over fourpercent decline in their share prices inthe session. Turnover decreased to48.437 million shares from 102.963million shares traded in the previoussession. Turnover in futures marketdown to 4.791 million shares from7.503 million shares traded a day ear-lier. Market capitalization declined toRs3.746 trillion from 3.760 trillion.DG Khan Cement was the turnoverleader with 5.354 million shares andit closed at Rs46.63. It was followed byMaple Leaf Cement with turnover3.860 million shares and it closed atRs 6.62. Bank Al-Falah with turnover3.333 million shares and it closed atRs17.95. Hub Power Company was onthe fourth position with 3.176 millionshares turnover and it closed atRs46.08. The UniLever Pakistan andColgate Palmolive, up Rs 144.80 andRs 19.99, led highest price gainerswhile, Shezan Inter and Pak Services,down Rs 10.72and Rs 7.50 respec-tively, led the losers.

Bears end bull parade amid SBP policyapprehension as KSE sheds 54 points

2018 forecast for research performance

shows Pakistan in top 30 countries

ISLAMABAD: An international forecast for research out-put has shown that Pakistan will be among top 30 coun-tries of the world. Scimago, an independent researchorganization and an international evaluation and rankingplatform, has projected in its recent publication how theworld will perform in research by 2018 based on their pastperformance. The top 50 countries are included in theforecast. China, as expected, becomes the number onecountry in the world by 2018 in terms of research output,however three countries which stand out and show themost drastic increase in numbers and rankings are Iran,Malaysia and Pakistan. Iran moves ahead from number 19to number 4, Malaysia from 30 to 13, and Pakistan from43 to 27. The expected output of research in Pakistanmoving up 16 notches, which is the second highest in-crease worldwide, is primarily due to the innovativehigher education policies and reforms taking place in Pak-istan under the Higher Education Commission (HEC). PR

CORPORATE CORNER

Typical bear comeback

SAN FRANCISCO

AGENCIES

Facebook shares crumbled again on Thurs-day, sending the once-feverishly sought-aftername below $20 for the first time as in-vestors scrambled to get out of the way of apotential share deluge in coming weeks.

Thursday marked a five-day losing streakfor the stock. Facebook has shed almost $50billion in value since its debut --more thanthe total valuation of Hewlett-Packard Co orStarbucks Corp. The stock debuted at $38and has headed south since, pummeled bygrowing doubts about its lofty valuation,growth prospects, high-profile departures.

Now, investors are struggling to under-stand the impact of the expiry on Aug. 16 of alockup period on insiders' sales.

That's when the first restrictions barringemployees and early investors from sellinggoes away, opening a spigot to roughly

1.88 billion additional shares for tradingby year's end.

Some investors said the stock's downwardslide may actually lessen the deadline's im-pact as insiders opt to wait. But at the veryleast, doubts about Facebook's business per-meating Wall Street will keep the shares con-strained for some time.

"Just because the lock-ups expire doesn'tmean people are going to rush to the exits,"said Topeka Capital Markets analyst AnthonyVictor. But he saw little upside in the nearterm.

Predicting whether Facebook insiders willsell their shares, even as the stock plumbsnew lows, is a tricky. Most Facebook employ-ees have restricted stock units -- considered amajor draw in fast-growing Web powers'drive to attract top-flight talent but are givenyears to sell them.

Unlike options which become worthless ifa company's stock price falls below an optionholder's "strike price," restricted stock unitsalways provide a profit to the employee theywere granted to - it just diminishes as theprice declines.

Many Silicon Valley employees count onbig paydays when their company goes public:it could mean the chance to pay off hefty col-lege loans, or a down-payment on a firsthome.

One Facebook employee expects to sell asmaller portion of his stake in the companythan he otherwise would have, given the dropin the stock price.

"I will definitely take some. But my de-bate is how much," said the employee, whoasked to remain anonymous.

Euro stays weak

in Asia after ECB

disappointmentTOKYO: The euro stayed bearishagainst other currencies in Asia tradeFriday after taking a hit from the Euro-pean Central Bank's announcement ofno immediate measures to fight the debtcrisis. The euro bought $1.2174 and95.12 yen in Tokyo morning trade, com-pared with $1.2178 and 95.26 yen inNew York late Thursday. The dollar wasalso flat at 78.22 yen. The euro tumbledThursday after the head of the EuropeanCentral Bank (ECB), Mario Draghi, an-nounced no immediate measures toease debt pressures in the eurozone andonly the bank "may" resume bond pur-chases. The markets had wanted morefrom him after he raised expectationslast week by saying the bank would do"whatever it takes" to preserve the em-battled single currency. AGENCIES

SAN FRANCISCO

AGENCIES

With a major patent trial barely un-derway, Apple has asked a judge torule against Samsung, saying lawyersfor the South Korean firm improp-erly disclosed information excludedin court in a bid to sway jurors. AnApple court document releasedThursday said Samsung issued astatement to the press with data ex-cluded from the trial, which beganin San Jose Monday on patent in-fringement over smartphonesand tablet computers. "Appleseeks a finding that Samsungand its counsel have engaged inbad faith litigation misconductby attempting to prejudice thejury," the motion to Judge LucyKoh said. "Samsung apparentlybelieves that it is above the law, andthat it -- not this court -- should de-cide what evidence the jury shouldsee." According to court documents,Samsung provided media with astatement Tuesday expressing dis-pleasure with the judge's exclusion ofevidence. "Samsung was not al-lowed to tell the jury the full storyand show the pre-iPhone design... indevelopment at Samsung in 2006,before the iPhone," said the state-

ment from the South Korean firm."The excluded evidence would haveestablished beyond doubt that Sam-sung did not copy the iPhone design.Fundamental Fairness requires thatthe jury decide the casebased on all the evi-dence." Apple saidin its motion thatreleasing the

statement represented "misconduct"because it could influence the jury."Samsung already has been sanc-tioned four times in this case for dis-covery abuses," Apple's motion said."Most recently, Samsung was sanc-

tioned for destroying evidence. Liti-gation misconduct is apparently apart of Samsung's litigation strategy-- and limited sanctions have not de-terred Samsung from such miscon-duct." Apple said it would notrequest a mistrial but instead ask thejudge to rule in the case. "It is fullywithin the court's authority to orderjudgment in Apple's favor as a sanc-tion for this misconduct," it said,

adding the judge may also "in-struct the jury that Samsung en-gaged in serious misconduct."

Apple's senior vice president ofworldwide marketing, Philip Schiller,was to be on the stand when the trialresumes Friday. Jurors on Tuesdaybegan hearing the biggest US patent

trial in decades, with billions atstake for the tech giants. Appleis seeking more than $2.5 bil-

lion in a case accusing the SouthKorean firm of infringing on de-

signs and other patents from theiPhone and iPad maker. This is oneof several cases in courts around theworld involving the two electronicsgiants in the hottest part of the techsector -- tablet computers and smart-phones. While the results so far havebeen mixed in courts in Europeand Australia, Samsung is clearlyon the defensive in the US case.

Facebook sharesdive as deadline forinsider sales nears

Apple asks for verdict afterSamsung ‘misconduct’

WASHINGTON

AGENCIES

The International Monetary Fund on Thursdaycalled for a "policy game changer" in the eurozone to arrest the spread of the debt crisis it nowsays is clearly engulfing the entire currency blocand its smaller neighbors.

An IMF spillover report that looks at howthe economic policies of the so-called systemicfive economies - the United States, China, eurozone, Japan and the United Kingdom – affecteach other and the rest of the world said theeuro area crisis was by far the biggest concernweighing on policymakers' minds. The IMF saidit had consulted 35 countries for the report in-cluding select number of emerging economiesBrazil, Czech Republic, India, South Africa,Turkey, Russia, South Korea, Poland, Mexicoand Saudi Arabia. "Despite progress in the faceof constraints, the sense is that not enough hasbeen done to stop the spread of stresses and at-

tenuate fiscal-growth-banking feedback loops,"the IMF said of the euro zone's policy actions sofar. In a worst-case scenario simulated by theIMF, it found that euro zone output could be cutby five percentage points if policymakers did notact and the euro zone crisis worsened.

If the euro zone crisis intensified, the IMFestimated that the impact to the world's poorestcountries would be somewhere between mild tosevere, and could push up their external financ-ing needs by some $27 billion by the end of2013. But the IMF said the euro zone was notthe only global worry. Weighing possiblespillovers elsewhere, the IMF also said theUnited States must remove the threat of a so-called "fiscal cliff" in 2013, with $4 trillionworth of expiring tax cuts and automatic gov-ernment spending reductions next year, andnot enough fiscal adjustments over the mediumterm. Most analysts believe that Congress willnot act until after the congressional and presi-dential elections in November.

Not good enough!g IMF says not enough done to stop spread of euro zone crisis

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