MONDAY, SEPTEMBER 16, 2013
BUSINESS
Sharp dip in gold, silver prices last week: Report KUWAIT: The price of gold “collapsed” by end of last week to hit bottom at $1,304 per ounce, down $83 from start of trade, a special report said yesterday. The Sabaek company report indicated the decline was over 6 percent, and an ounce of gold was trading for the least value after four weeks of gains, for reasons including easing tension over Syria as talk moved from military options to diplomatic mediation, thus dampening demand for gold as a sanctuary good. The report also said investors’ anxiety over the US Federal Reserve decision as to stimulus policy also brought down demand amid expectations the bank would be tapering down quantitative easing, and even some predictions there would be total stop of stimulus measures. Another factor weighing down the price of the yellow metal was US President Barack Obama’s intention to appoint Lawrence H. Summers as head of the reserve to succeed Ben Bernanke. “This gave investors the impression that the US economy is now in a stage of recovery and can rely upon the usual mechanism of supply and demand without extra or stimulus support. “This in turn means there is no longer the need for safe sanctuary hedging.” The report pointed out that should quantitative easing continue, it is not unlikely that gold would again hit $1,400 per ounce and even end the year just shy of $1,500 per ounce. Other factors also contributed to the drop in prices, such as drop in demand for material goods from east Asia, particularly from India where last week showed the weakest figures in a long time. “Quick speculation and electronic trading also helped bring gold below the $1,350 benchmark.” The specialized report forecast some gains for next week as expected correction, and added current prices would induce many investors to buy again. Silver dipped even more than gold, the report said, losing 9 percent of its value. Other precious metals were not as affected by the political atmosphere and showed lack-luster performance. In the local gold market, demand increased for pure gold and small items with 21 and 18 carat gold peaking in Thursday and Friday sales. —KUNA
Egypt’s Citadel Capital plans $528m capital hike DUBAI: Egyptian private equity firm Citadel Capital has won regulatory clearance to ask shareholders to approve a capital increase, it said yesterday, underlining a more confident mood on local markets. If the 3.64 billion Egyptian pound ($528 million) share issue goes ahead, it will be one of the biggest in Egypt since its 2011 revolution. Citadel, which has struggled with losses over the past two years, originally requested regulatory approval for the share sale last year. But like many business plans during the chaotic administration of Islamist President Mohammed Morsi, it did not go ahead because of bureaucratic obstacles and poor market conditions. Morsi was ousted by the army after popular protests in early July. The company will now hold a shareholders’ meeting to propose issuing 182.1 million preferred shares and 546.3 million common shares at a par value of 5 Egyptian pounds, raising its total number of shares to 1.6 billion and paid-in capital to 8 billion pounds. The money raised would be used to boost Citadel’s ownership to between 51 and 100 percent in most of the major companies in which it invests, particularly in the energy, transport, agriculture, mining and cement sectors, it said. Other investors and partners in these firms would be given a chance to become shareholders in Citadel. Meanwhile, the company plans gradually to sell off its noncore investments over a period of at least three years. Citadel, which says it controls investments worth $9.5 billion, posted a group net loss of 702.4 million Egyptian pounds in 2012, after a loss of 800.5 million pounds in 2011. The company’s shares were trading up 0.9 percent at 3.30 Egyptian pounds around midday yesterday, down 13 percent since the end of last year. — Reuters
Americans still angry at Wall Street, five years after Lehman Summers chastised bankers for being out of touch
NEW YORK: A few years ago, Larry Summers, then the director of President Barack Obama’s National Economic Council, held a private meeting with some of Wall Street’s top bankers and executives. Although the worst of the financial crisis was over by then, Summers - now seen as a candidate to be the next chairman of the US Federal Reserve chastised bankers for being out of touch, saying they didn’t understand how angry average Americans were with them, according to a participant in the meeting. A spokeswoman for Summers said it sounded like something he might have said, though she did not provide more specific confirmation. Five years after the collapse of Lehman Brothers and two years after the start of the Occupy Wall Street movement, Wall Street has drastically changed under an onslaught of new regulations and by some accounts become more conscious of its image on Main Street. The anti-Wall Street sentiment bodes ill for the sector: It serves to pressure lawmakers and regulators into further restraining perceived excesses on Wall Street, threatening the long-term profitability of the industry.
‘NOTHING’S REALLY CHANGED’ The poll of more than 1,400 adults, representing a cross-section of the US population, shows that half of the respondents believe there has not been enough reform to prevent a future crisis. As many as 44 percent of those polled believe the government should not have bailed out financial institutions, while only 22 percent thought it was the right move. Fifty-three percent think not enough was done to prosecute bankers; 15 percent were satisfied with the effort. Henry Paulson, the former US Treasury Secretary who was the architect of the bailouts in 2008, said he believes the government botched its chance to portray them as a necessity for the financial stability of all Americans. “I never was able to convince the average American that what we did with these rescues wasn’t for Wall Street but it was for them,” Paulson said in an interview. “To understand the financial system, it’s a little like plumbing in your house - you don’t know where the pipes are and you just realize it when the pipes get clogged and everything grinds to a halt.” Among those polled, the concerns go deeper. “I can’t see any reforms they’ve done. Nothing’s really changed,” said Judith Klatt, 67, a retiree from Wisconsin who responded to the survey. “I’m angry at the government and Wall Street. I think they’ve both, in plain language, screwed the public and are still doing so.”
A WORSE CRISIS FORESTALLED Many financial experts believe bailouts of financial institutions after the collapse of Lehman Brothers in September 2008 and subsequent actions by the U.S. government to prop up the economy helped stop the country’s spiral into what could have been a crisis even as dire as the Great Depression. New regulations, including the Dodd-Frank finance reform law and Basel III capital rules, have also forced Wall Street to rein in risky behavior. And while Wall Street gets poor scores on many questions, the results of the poll are not as damning as some polls about attitudes to Wall Street taken soon after the financial crisis. Lindsay Owens, a Stanford University doctoral student who has tracked American attitudes toward Wall Street, said animosity toward the financial sector reached its highest level in 40 years in 2010. When it declined slightly in 2012, the level was still higher than it had been in that period before the crisis, she said. (There is no direct previous comparison to the Reuters/Ipsos poll.) The cost of the crisis has been severe. A paper from the Federal Reserve Bank of Dallas estimated that the financial crisis and the recession cost the US economy as much as $14 trillion, or about $120,000 for every household.The recovery has also been slow, and high levels of unemployment have persisted. In September 2011, a groundswell of rage led to the creation of the Occupy move-
polled said Wall Street bankers, traders and executives were still paid too much. More than half also want the government to do more to punish those responsible for the crisis. “I haven’t seen anybody prosecuted and joining Bernie Madoff in jail as a cell mate,” said Francisco Ramos, 47, a Florida-based former land surveyor, in reference to the fraudster. Ramos, who was among those polled, said he wants to see bankers jailed “just to scare them so they don’t pull the same shenanigans again.” Barney Frank, who recently retired as the top Democrat on the House Financial Services Committee, said past convictions were an unfair standard to use when considering the government’s success in reforming the financial sector. “People don’t fully understand. One of the reasons we had to pass a lot of new laws is a lot of bad things weren’t illegal. It will be fair to judge going forward,” Frank said. Kenneth Feinberg, the so-called pay czar who was charged by the US government with keeping bonuses in check at bailed-out firms after the crisis, agreed with the respondents that pay was still too high on Wall Street but said he didn’t believe it was the government’s job to regulate compensation. “American history teaches us that there’s always been a wide chasm between Wall Street and Main Street,” Feinberg said. “I don’t think anything that Wall Street can do will bridge that divide.” —Reuters
ment and the concept of the 99 percent of people against the 1 percent of highest income earners, including bankers on Wall Street. “We have, on the one hand, the bankers and the lobbyists and the politicians that have been bought by those lobbyists and think that any regulation is too much regulation,” said Cathy O’Neil, a former quantitative hedge-fund analyst who is the organizer of the Occupy Wall Street alternativebank group, which wants to make the financial system more accountable and transparent. “On the other hand, we have the 99 percent who see it from a very different angle, and in particular don’t see why we had to bail out the banks or any improvement to the system since then,” said O’Neil. LESS PAY, MORE PUNISHMENT The Reuters/Ipsos poll shows that as many as 30 percent of Americans believe Wall Street banks and traders do not help the economy grow and create jobs. (Twenty-six percent of those polled said they believed the financial services sector was good for the economy.) Fifty-one percent believe Silicon Valley and the technology industry do better than the financial services industry at creating jobs and helping the US economy, while only 10 percent said they thought Wall Street did better. About one-third of those polled said breaking up the big banks will help the economy, nearly twice the number of people who thought it would hurt. A majority of those
MSM’s sharia-compliant index becomes effective MUSCAT: Muscat Securities Market (MSM) started yesterday working with the new sample of MSM sharia-complaint index, which includes 32 public joint stock companies listed on the market. Head of the Indicators Section at the Operation Department in MSM Jameeal bint Ali Al-Hamhamiya said in a statement that this came after the approval of sample at the beginning of this month, pointing out that the sample will be reviewed every three months in order to add or delete companies according to the criteria commitment.
She added that the sharia index contains 32 joint stock companies listed on MSM whose activities and financial conduct comply with the requirements of the sharia, depending on the standards of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). Al-Hamhamiya also said that the index includes 19 companies from the industry sector, nine companies from the service sector and four companies from the financial sector. The sharia index helps to attract a new segment on investors as it meets their aspirations, and they prefer a reliable
contains Oman Chlorine, Oman Cement, Oman Education and Training, Oman Flour Mills, Oman Oil Marketing, Oman Refreshments, Oman Telecommunications Company, Oman Textile Holding, Port Services Corporation, Raysut Cement Company, Shell Oman Marketing, A’Saffa Foods, Oman Fisheries, Oman Sweets, Salalah Flour Mills and Voltamp Energy. Criteria for compatibility with the Islamic law, according to the AAOIFI, cover two aspects, business and financial, and The Muscat Securities Market has provided more information on its website. — KUNA
reference to select investments that comply with requirements and provisions of the Islamic sharia. The index list comprises the following companies: Al-Anwar Ceramic Tiles, Al-Jazeera Services, Al-Izz Islamic Bank, Bank Nizwa, Construction Materials Industry, Dhofar Beverages and Food Stuff, Al-Batinah Development and Investment Holding, Dhofar Poultry, Gulf International Chemicals, Gulf Mushroom Products, Majan Glass, Muscat Gases, AlMaha Petroleum Products Marketing, National Real Estate Development and Nawras and Oman Chromite. The list also
EXCHANGE RATES Al-Muzaini Exchange Co. Japanese Yen Indian Rupees Pakistani Rupees Srilankan Rupees Nepali Rupees Singapore Dollar Hongkong Dollar Bangladesh Taka Philippine Peso Thai Baht Irani Riyal Irani Riyal
Saudi Riyal Qatari Riyal Omani Riyal Bahraini Dinar UAE Dirham
ASIAN COUNTRIES 2.867 4.477 2.713 2.153 2.784 225.710 36.736 3.657 6.490 8.959 0.271 0.273 GCC COUNTRIES 75.990 78.299 740.160 756.880 77.605
ARAB COUNTRIES Egyptian Pound - Cash 41.200 Egyptian Pound - Transfer 40.845 Yemen Riyal/for 1000 1.329 Tunisian Dinar 172.850 Jordanian Dinar 402.330 Lebanese Lira/for 1000 1.912 Syrian Lier 30.962 Morocco Dirham 34.527 EUROPEAN & AMERICAN COUNTRIES US Dollar Transfer 284.850 Euro 383.120 Sterling Pound 455.760 Canadian dollar 277.900 Turkish lira 140.600 Swiss Franc 308.950 Australian Dollar 265.480 US Dollar Buying 283.650
20 Gram 10 Gram 5 Gram
GOLD 251.000 127.000 66.000
UAE Exchange Centre WLL COUNTRY Australian Dollar Canadian Dollar Swiss Franc Euro US Dollar Sterling Pound Japanese Yen Bangladesh Taka Indian Rupee Sri Lankan Rupee Nepali Rupee Pakistani Rupee UAE Dirhams Bahraini Dinar Egyptian Pound Jordanian Dinar Omani Riyal Qatari Riyal Saudi Riyal
SELL DRAFT 265.33 276.98 306.57 377.70 285.35 448.23 2.92 3.681 4.316 2.141 2.741 2.725 77.62 758.15 41.24 405.40 740.79 78.66 76.09
SELL CASH 263.000 282.000 311.000 384.000 287.400 443.000 3.000 3.800 5.150 2.700 3.600 2.920 78.000 759.500 41.100 416.200 746.400 79.000 76.300
Dollarco Exchange Co. Ltd Rate for Transfer US Dollar Canadian Dollar Sterling Pound Euro Swiss Frank Bahrain Dinar UAE Dirhams Qatari Riyals Saudi Riyals Jordanian Dinar Egyptian Pound Sri Lankan Rupees Indian Rupees Pakistani Rupees Bangladesh Taka Philippines Pesso Cyprus pound Japanese Yen Thai Bhat Syrian Pound Nepalese Rupees Malaysian Ringgit
Selling Rate 285.000 278.290 448.020 378.675 304.795 754.545 77.570 78.230 76.865 401.755 41.281 2.143 4.463 2.716 3.664 6.493 699.120 3.830 9.195 4.070 3.900 86.710
Bahrain Exchange Company CURRENCY Europe British Pound Czech Korune Danish Krone Euro Norwegian Krone Scottish Pound Swedish Krona Swiss Franc
Australian Dollar New Zealand Dollar Uganda Shilling
Canadian Dollar Colombian Peso US Dollars
Bangladesh Taka Cape Vrde Escudo Chinese Yuan Eritrea-Nakfa Guinea Franc Hg Kong Dollar Indian Rupee Indonesian Rupiah Jamaican Dollars Japanese Yen Kenyan Shilling Malaysian Ringgit Nepalese Rupee Pakistan Rupee Philippine Peso Sierra Leone Singapore Dollar Sri Lankan Rupee Thai Baht
BUY 0.4412516 0.0067435 0.0468125 0.3734515 0.0442288 0.4374753 0.0395092 0.3001475 Australasia 0.2549161 0.2214896 0.0001129 America 0.2685932 0.0001450 0.2829000 Asia 0.0036198 0.0031622 0.0457241 0.0164700 0.0000442 0.0342043 0.0043910 0.0000201 0.0028477 0.0027570 0.0031949 0.0822853 0.0026321 0.0026904 0.0060392 0.0000728 0.2207630 0.0021035 0.00854922
Arab
SELL 0.4502516 0.0187435 0.0518125 0.3809515 0.0494288 0.4449753 0.0445092 0.3071475
0.2669161 0.2314896 0.0001129
0.2775932 0.0001630 0.2850500
0.0036748 0.0033922 0.0507241 0.0195700 0.0000502 0.0373043 0.0044560 0.0000252 0.0038477 0.0029370 0.0034249 0.0892853 0.0028321 0.0027304 0.0065092 0.0000758 0.2267630 0.0021455 0.0090922
Bahraini Dinar
0.7496745
0.7581745
Egyptian Pound
0.0392690
0.0412840
Ethiopeanbirr
0.0126460
0.0191460
Ghanaian Cedi
0.1449331
0.1467231
Iranian Riyal
0.0000793
0.0000798
Iraqi Dinar
0.0001842
0.0002442
Jordanian Dinar
0.3964753
0.4039753
Kuwaiti Dinar
1.0000000
1.0000000
Lebanese Pound
0.0001748
0.0001948
Moroccan Dirhams
0.0223730
0.0463730
Nigerian Naira
0.0012114
0.0018464
Omani Riyal
0.7293790
0.7403790
Qatar Riyal
0.0776409
0.0784239
Saudi Riyal
0.0754800
0.0761200
Sudanese Pounds
0.0463475
0.0468975
Syrian Pound
0.0019425
0.0021625
Tunisian Dinar
0.1710367
0.1770367
UAE Dirhams
0.0761813
0.0776313
Yemeni Riyal
0.0012859
0.0013859
Al Mulla Exchange Currency
Transfer Rate (Per 1000)
US Dollar
284.200
Euro
380.650
Pound Sterling
453.150
Canadian Dollar
276.700
Indian Rupee
4.476
Egyptian Pound
41.210
Sri Lankan Rupee
2.152
Bangladesh Taka
3.653
Philippines Peso
6.482
Pakistan Rupee
2.710
Bahraini Dinar
757.000
UAE Dirham
77.450
Saudi Riyal
76.000
*Rates are subject to change