PRO 06-01-2013_Layout 1 1/5/2013 11:10 PM Page 1
Inflation’s not that bad after all… Inflation rate in Pakistan lower than regional countries ISLAMABAD APP
eSPITe experiencing inflationary pressure in the region, Pakistan has managed to contain inflation rate within single digit which is lower than the regional countries including India and Sri Lanka. Pakistan’s year on year inflation rate (Consumer Price Index) registered an increase of 7.9 percent in December 2012 as compared to same period of last year. While in India the CPI was registered at 9.2 percent followed by Sri Lanka 9.2 percent and in Bangladesh the CPI increased by 7.2 percent (October 2012), the official sources told this news agency. The price comparison of essential consumer items prevailing on December 27, 2012 in Pakistan as compared to neighboring countries including India, Bangladesh, Sri Lanka and Afghanistan indicates that prices of wheat, wheat flour, rice, sugar and red chillies were found lower in Pakistan than other regional countries. Currently the wheat flour is being sold at the rate of Rs 34.5 in Islamabad while its price in New Delhi (India), Dhaka (Bangladesh), Colombo (Sri Lanka) and Kabul (Afghanistan) is Rs 37.6, Rs 49.6, Rs 132.5 and Rs 54 per kilogram respectively. The rate of sugar in Islamabad, New Delhi, Dhaka, Colombo and Kabul is Rs 58.8, Rs 71.2, Rs 68.5, Rs 89 and Rs 90 per kg respectively. Similarly Rice is being sold at Rs 114.1, Rs 163, Rs 188.8, Rs 132.5 and Rs 171 per kg in Islamabad, New Delhi, Dhaka, Colombo and Kabul respectively. The prices of Mutton and beef in Islamabad, New Delhi, Dhaka, Colombo and Kabul are Rs 565 and Rs 280, Rs 543 and Rs 273, Rs 531 and Rs 318, Rs 883 and Rs 412 and Rs 679 and Rs 540 respectively. The sources added that the petrol price in Pakistan is lower than in India and Bangladesh as the petrol is being sold at Rs 102.65, Rs 120.07 and Rs 108.85 respectively in Pakistan India and Bangladesh. The price of diesel in Pakistan however is higher as compared to the regional countries. The diesel price is Rs 109.77, Rs 84.2 and Rs 74.61 in Pakistan, India and Bangladesh respectively. According to the sources the government has constituted the National Price Monitoring Committee under the Chairmanship of Secretary Finance.
Egypt’s Mursi to meet IMF aide on $4.8 billion loan request CAIRO AGENCIES
A senior official in the International Monetary Fund (IMF) will meet egyptian President and other top officials on Monday to discuss Cairo’s request for a $4.8 billion loan, a major state-run egyptian newspaper reported on Saturday. The IMF loan is seen as crucial to easing egypt’s budget deficit and an economic slump caused by the turmoil that followed the popular uprising that ousted autocratic president Hosni Mubarak in February 2011. “egyptian President Mohamed Mursi will receive on the day after tomorrow Masood Ahmed, the IMF director for the Middle
Frost not good for fruit producing plants: experts LAHORE APP
Agriculture experts have advised gardeners to properly look after fruit producing plants for proper yield as the plants are affected by a change in weather. Talking to APP on Saturday, agriculture experts said at night dew on plants leaves freezes due to minimum temperature which ultimately harms leaves badly. Frost also harms branches of a plant and they fall down which affects production of plants, they added. Fruits like Bananas, mangoes, lychees and lemons are affected by frost. It can damage plants in December, January and sometimes in February, they added. They asked gardeners to stay alert during December, January and February and keep monitoring temperatures with a thermometer to save plants from severe cold. One thermometer is enough to monitor a four-hectare area, they added. Gardeners should also use polyethylene sheets to cover plants against frost and sheets should not be placed directly on plants. Some gardeners grow banana plants near mango trees to save them from frost but in such a case banana plants take maximum nutrition of mango plants which affects the growth of mango plants, they added.
east and Central Asia... and it is expected that the meeting will include talks about the IMF’s loan to egypt,” the Akhbar Al-Youm daily reported. It said Masood would also meet Prime
Minister Hisham Kandil, some ministers and the central bank governor. Officials from the cabinet, presidency and IMF were not immediately available to comment on the report.
PIAMS to bridge knowledge gap in aviation studies KARACHI STAFF REPORT
PALPA Chairman Institute of Aviation and Management Sciences (PIAMS) Captain Suhail Baluch said Pakistan’s first institute for aviation studies is striving to bridge the knowledge-gap of the country’s professionals to keep pace with the dynamics of international aviation business. Addressing an introductory session on first Masters degree in business aviation, he said: “Our inability to keep pace with the evolving trends of international aviation and the knowledgegap of our aviation professionals has been identified as a major factor contributing to the downfall of Pakistan’s aviation industry’ specially PIA, the national flag carrier, which was once a symbol of national pride and was known all over the world for excellence, is now only a shadow of its glorious past.”. In the current scenario, the establishment of PIAMS is a breath of fresh air and provides hopes for the revival of the local
France won’t buy troubled Petroplus refinery: Hollande France will not take over insolvent Swiss refiner Petroplus’ oil refinery in Normandy, but could help the plant financially once a suitable buyer is found, President Francois Hollande said on Saturday VAL-DE-REUIL AGENCIES
About 500 jobs at the 161,000 barrels-aday Petit-Couronne refinery are at risk, the latest industrial headache for the Socialist leader who has vowed to stem rising unemployment by the end of the year. “It’s difficult to find a serious buyer. We must do everything to find one,” Hollande told reporters after meeting union leaders in Val-De-Reuil, a town about 110 kilometers (70 miles) north-west of Paris. “The state will do its duty, but it cannot take the plant over, and the workers know that,” he said. He added the state could at some point provide financing. Petroplus poses a major test for Hollande’s government after it faced criticism over the tactics it used in a two-month battle over the future of ArcelorMittal’s (ISPA.AS) Florange steel
Sunday, 6 January, 2013
plant, which unnerved investors in the euro zone’s second largest economy and confused France’s unions. His administration is struggling to stop a haemorrhage of industrial jobs which has helped push unemployment to 15-year highs, while curbing public spending and raising taxes to help slash debt in a stagnant economy. A French court set a deadline of February 5 for interested parties to submit bids for the Petit-Couronne refinery. Shell RDSA.L, which had a six-month oil processing deal with the troubled plant running to mid-December, has not extended its contract, making the refinery less attractive for buyers due to expensive restart costs. So far only NetOil, a company led by Middle eastern businessman Roger Tamraz, has submitted an offer while 7 others have filed letters of intent to buy France’s oldest refinery.
Net Oil’s offer includes an oil supply deal with BP (BP.L) and an agreement with Hyundai (005380.KS) to upgrade the plant. Union spokesman Yvon Scornet told reporters after the meeting that Hollande had promised to do everything possible to push the project forward, but had given no guarantees. TAKING CHARGE: Hollande is trying to win back voters who are increasingly unhappy over the government’s handling of the economy and disillusioned by communication gaffes. A survey by BVA for I>Tele on Friday showed two-thirds of respondents were not convinced by Hollande’s New Year’s address aimed at reassuring the country over his policies. Approval ratings for Hollande and Prime Minister Jean-Marc Ayrault hit new lows in December. Hollande, seen as letting his ministers lead the fight, has been compared
unfavourably with his pugnacious, micro-managing predecessor Nicolas Sarkozy. However, the president, who appointed a new communications advisor on Thursday, appears to have decided to put himself directly in the firing line promising to carry out at least one visit a week across France to show his commitment to battling the economic crisis. “Today, I have to be more present on the ground,” he said. “I have to set the example as I am the first to blame. I am not delegating to anybody else the responsibility of explaining to the French the policies that I am pushing through.”
aviation industry, he said. He was of the view that although a number of private airlines have sprung up in recent years and have begun domestic and international operations, Pakistan’s commercial aviation sector, once a thriving and vibrant industry, is facing multiple challenges today. After an auspicious beginning, it is hoped that PIAMS would fill the void of an educational institute in the field of aviation management and to become a vital exponent for the revival of Pakistan’s ailing aviation industry in the years to come, he hoped. Piams has been recognized by the government of of Sindh and is affiliated with the University of Karachi. PIAMS is the first educational institute of the country offering BBA and MBA programs in the discipline of Aviation Management. Supported by PIA and CAA, the Institute has already completed its first semester of BBA and MBA programs.
PRO 06-01-2013_Layout 1 1/5/2013 11:10 PM Page 2
Business 02 Wall Street economists see Fed’s Treasury buying ending in 2013: poll Most economists at Wall Street’s top financial institutions expect the Federal Reserve in 2013 to end the programme with which it bought Treasury debt in an effort to stimulate the economy, according to a poll NEW YORK
CONOMISTS at nine of 16 primary dealers — the large financial institutions that do business directly with the Fed — said they expect the current Fed program of buying $45 billion per month of Treasuries to end in 2013. Of the nine, eight said the central bank would quit the program in the fourth quarter or the end of the year. One forecast the end of the program in June. Six of 15 economists at primary dealers said the Treasury purchase program would close in 2014, while one said it would continue through to the first half of 2016. Minutes from the Fed’s December policy meeting, released on Thursday, showed “several” top officials expected to slow or stop the so-called quantitative easing program “well before” the end of the year. That news surprised some on Wall Street and prompted a drop in stocks and bonds, and a rise in the dollar. “It is hard to be as confident of the purchases continuing at the same pace,
because we had originally thought they were going to last through the fourth quarter of 2014, but now it is not as clear that is going to be the case,” said Tom Simons, money market economist with Jefferies & Co. in New York. St. Louis Fed President James Bullard, a voting member of the Fed’s monetary policy panel this year, said on Friday the Fed could be in a position to halt its asset purchases this year if the U.S. economy improves. The Fed this week began buying longer-dated Treasuries in an openended stimulus program that replaced its “Operation Twist” stimulus, under which it was selling shorter-dated Treasuries and using the proceeds to buy longer-dated U.S. government debt. Twist expired at the end of December, with analysts noting the central bank had few shorter-dated Treasuries left to sell. The central bank is already buying about $40 billion per month of mortgage-backed securities in an effort to prop up the economy. The median of forecasts from 13 primary dealers was for the Fed to buy a total of $540 billion of Treasuries under the current stimu-
lus program. estimates ranged from $270 billion to $1 trillion. Nine of 16 primary dealers said the U.S. unemployment rate would fall to 6.5 percent in 2015, while six said it would dip to that level in 2014 and one said it would happen in 2016. The Fed at the conclusion of its December policy meeting said it expects to hold interest rates at the current level of zero to 0.25 percent at least as long as the unemployment rate remains above 6.5 percent and inflation between one and two years ahead is projected to be no more than 2.5 percent. Previously, the Fed had said it expects to hold rates near zero at least through mid-2015. The Reuters poll was conducted on Friday after the government
reported the pace of hiring by U.S. employers eased slightly in December, while the unemployment rate held steady from November at 7.8 percent. “In the context of the Fed’s now explicit unemployment rate target, (Friday’s payrolls data) at the margin theoretically extends the timing of the first tightening,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York. “That said, at the current six month pace in monthly payroll gains and labor force growth, the unemployment rate would still hit 6.5 percent by June 2014 - much sooner than the Fed’s prior mid2015 launch point,” he said. There are 21 U.S. primary dealers. Not all of the dealers responded to the Reuters poll.
‘Cliff’ concerns give way to earnings focus NEW YORK AGENCIES
Financial results, which begin after the market closes on Tuesday with aluminum company Alcoa (AA.N), are expected to be only slightly better than the third-quarter’s lackluster results. As a warning sign, analyst current estimates are down sharply from what they were in October. That could set stocks up for more volatility following a week of sharp gains that put the Standard & Poor’s 500 index .SPX on Friday at the highest close since December 31, 2007. The index also registered its biggest weekly percentage gain in more than a year. Based on a Reuters analysis, europe ranks among the chief concerns cited by companies that warned on fourth-quarter results. Uncertainty about the region and its weak economic outlook were cited by more than half of the 25 largest S&P 500 companies that issued warnings. In the most recent earnings conference calls, macroeconomic worries were cited by 10 companies while the U.S. “fiscal cliff” was cited by at least nine as reasons for their earnings warnings. “The number of
things that could go wrong isn’t so high, but the magnitude of how wrong they could go is what’s worrisome,” said Kurt Winters, senior portfolio manager for Whitebox Mutual Funds in Minneapolis. Negative-topositive guidance by S&P 500 companies for the fourth quarter was 3.6 to 1, the second worst since the third quarter of 2001, according to Thomson Reuters data. U.S. lawmakers narrowly averted the “fiscal cliff” by coming to a last-minute agreement on a bill to avoid steep tax hikes this weeks — driving the rally in stocks — but the battle over further spending cuts is expected to resume in two months. Investors also have seen a revival of worries about europe’s sovereign debt problems, with Moody’s in November downgrading France’s credit rating and debt crises looming for Spain and other countries. “You have a recession in europe as a base case. europe is still the biggest trading partner with a lot of U.S. companies, and it’s still a big chunk of global capital spending,” said Adam Parker, chief U.S. equity strategist at Morgan Stanley in New York. REVENUE WORRIES: One of the biggest worries voiced about earnings has been whether companies will be able to continue to boost profit growth despite
relatively weak revenue growth. S&P 500 revenue fell 0.8 percent in the third quarter for the first decline since the third quarter of 2009, Thomson Reuters data showed. earnings growth for the quarter was a paltry 0.1 percent after briefly dipping into negative territory. On top of that, just 40 percent of S&P 500 companies beat revenue expectations in the third quarter, while 64.2 percent beat earnings estimates, the Thomson Reuters data showed. For the fourth quarter, estimates are slightly better but are well off estimates for the quarter from just a few months earlier. S&P 500 earnings are expected to have risen 2.8 percent while revenue is expected to have gone up 1.9 percent. Back in October, earnings growth for the fourth quarter was forecast up 9.9 percent. In spite of the cautious outlooks, some analysts still see a good chance for earnings beats this reporting period. “The thinking is you need top line growth for earnings to continue to expand, and we’ve seen the market defy that,” said Mike Jackson, founder of Denver-based investment firm T3 equity Labs.
Cricket fans could have Wasim Akram’s autograph via Ufone scratch cards KARACHI: In continuation to the tradition of being the first to launch the most affordable offers, packages and advanced services, Ufone one of the leading telecom companies in the country is once again the first to introduce Rs 150 scratch card in Pakistan, the exciting part is that each card comes with one of Pakistan’s favorite cricketing hero and legend Wasim Akram’s autograph. Akram, a brand ambassador of Ufone, said: “Millions of fans now have a chance to get my autograph through scratch cards of their favorite cellular phone network. This is a lifetime opportunity for both my fans and I to tour Malaysia and get to discuss my cricketing moments over the years. I thank Ufone for setting this platform and allowing me to reconnect with my fans. The scratch card is unique and the first of its kind which has been designed as a collectable series with 5 different designs. The scratch cards will not only facilitate customers to upload balance but it will serve as a souvenir with the autograph of the renowned King of Swing. The recharge of balance from any of the 5 cards will qualify for a lucky draw to win a trip to Malaysia accompanied by Akram. Ufone customers can participate in the contest through more than one entry. Accordingly, the 1st entry will be registered after recharging of 5 cards, 2nd entry will be registered after recharge of 6th card and third will be registered on use of a 7th card and so on. There will be 5 lucky winners who will be accompanied by Akram in a most enjoyable and memorable journey of their lifetime. Apart from a chance to win the lucky draw customers will get one of five definite surprise gifts including 100 SMS, 300 MMS, 3MB Internet, 100 Mins Free (Ufone to Ufone) on the recharge of each card. The last date to submit entries for lucky draw is March 31, 2013. Lucky draw winners will be announced within 10 days after March 31, 2013. STAFF REPORT
S&P 500 finishes at 5-year high on economic data The benchmark Standard & Poor’s 500 index ended at a five-year high, lifted by reports showing employers kept up a steady pace of hiring workers and the vast services sector expanded at a brisk rate NEW YORK AGENCIES
The gains on the S&P 500 pushed the index to its highest close since December 2007 and its biggest weekly gain since December 2011. Most of the gains came early in the holiday-shortened week, including the largest one-day rise for the index in more than a year on Wednesday after politicians struck a deal to avert the “fiscal cliff.” The Dow Jones industrial average .DJI gained 43.85 points, or 0.33 percent, to 13,435.21. The Standard & Poor’s 500 Index .SPX rose 7.10 points, or 0.49 percent, to 1,466.47. The Nasdaq Composite Index .IXIC edged up 1.09 points, or 0.04 percent, to 3,101.66. For the week, the S&P gained 4.6 percent, the Dow rose 3.8 percent and the Nasdaq jumped 4.8 percent to post their largest weekly percentage gains in more than a year. The CBOe Volatility index .VIX, a measure of investor anxiety, dropped for a fourth straight session, giving the index a weekly decline of nearly 40 percent, its biggest weekly fall ever. The close of 13.83 on the VIX marks its lowest level since August.
In Friday’s economic reports, the Labor Department said non-farm payrolls grew by 155,000 jobs last month, slightly below November’s level. Gains were distributed broadly throughout the economy, from manufacturing and construction to healthcare. Also serving to boost equities was
data from the Institute for Supply Management showing U.S. service sector activity expanding the most in 10 months. With the S&P 500 index at a fiveyear closing high, analysts said any gains above the index’s intraday high near 1,475 in September may be harder to come by. “We are getting to a point
where we need a strong catalyst, which could be earnings, it could be three months of good economic data, it could be a variety of things,” said Adam Thurgood, managing director at HighTower Advisors in Las Vegas, Nevada. “What is going on right now is this conflicting view of fundamentals look pretty good and improving, and then you’ve got these negative tail risks that could blow everything up,” Thurgood said. He referred to “a fiscal superstorm brewing” of issues still left unresolved in Washington, including tough federal budget cuts and the need to raise the government’s debt ceiling all within a couple of months. The rise in payrolls shown by the jobs data did not make a dent in the U.S. unemployment rate still at 7.8 percent. A Reuters poll on Friday of economists at Wall Street’s top financial institutions showed that most expect the Fed in 2013 to end the program with which it bought Treasury debt in an effort to stimulate the economy. A drop in Apple Inc (AAPL.O) shares of 2.6 percent to $528.36 kept pressure on the Nasdaq. Adding to concerns about Apple’s ability to produce more innovative products, rival Samsung electronics
Co Ltd (005930.KS) is expected to widen its lead over Apple in global smartphone sales this year with growth of 35 percent. Market researcher Strategy Analytics said Samsung had a broad product lineup. eli Lilly and Co (LLY.N) was among the biggest boost’s to the S&P, up 3.7 percent to $51.56 after the pharmaceuticals maker said it expects its 2013 earnings to increase to $3.75 to $3.90 per share, excluding items, from $3.30 to $3.40 per share in 2012. Fellow drugmaker Johnson & Johnson (JNJ.N) rose 1.2 percent to $71.55 after Deutsche Bank upgraded the Dow component to a “Buy” from a “Hold” rating. The NYSeArca pharmaceutical index .DRG climbed 0.6 percent. Shares of Mosaic Co (MOS.N) gained 3.3 percent to $58.62. excluding items, the fertilizer producer’s quarterly earnings beat analysts’ expectations, according to Thomson Reuters I/B/e/S. Volume was modest with about 6.07 billion shares traded on the New York Stock exchange, NYSe MKT and Nasdaq, slightly below the 2012 daily average of 6.42 billion. Advancing stocks outnumbered declining ones on the NYSe by 2,287 to 701, while on the Nasdaq, advancers beat decliners 1,599 to 866.
Sunday, 6 January, 2013