Monday June 29, 2009

FRANKFURT: German banks are facing a firestorm of criticism from the government and industry federations that accuse them of threatening small businesses with their tight-fisted credit policies. More than 16,600 small and medium-sized companies in Germany failed in the first half of the year, 14 percent more than in the same period of 2008, the association Creditreform has estimated.

The bankruptcies affected 250,000 jobs and Creditreform has warned that a total of 540,000 jobs could be eliminated by the end of the year. Tight credit policies have been a major factor in the failures, according to most official business administrators polled by ZIS, a research group specialising in troubled enterprises. "Getting credit has become very difficult," administrator Markus Ernestus told AFP.

"Even companies that have a temporary need for cash to fill their orders are getting turned down." The tight money approach prevails despite a steady monetary easing by the European Central Bank, whose benchmark interest rate has been brought down from 4.25 percent to a record low 1.0 percent. "Banks have not lowered their rates, in order to build up their profit margins, and have raised their risk surcharges," said Karl-W. Giersberg, head of the federal small- and medium-sized business association BKM.

The banks are also under pressure from capital reserve requirements imposed by their lending. To reassure investors and to shore up their share price, banks often apply stricter standards than those prescribed by international practice.

As a result, warned Anton Boerner, head of the German exporters' association BGA, "a massive credit crisis" looms between now and the middle of September. German banks reject the criticism, arguing that co-operative banks have made loans of 164 billion euros (231 billion dollars) to companies in the first quarter of the year, an annual increase of 4.7 percent.


(AFP)

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Monday June 29, 2009

NEW YORK: As hard-hit Western banks and hedge funds scramble to sell their Asian loans and bonds, one newcomer expects to pick up these choice assets at rarely seen discounts. Opvs Group is launching two Asia-focused credit funds designed to benefit from the region's underlying growth potential by acquiring debt at prices depressed by the global financial crisis.

That's a classic opportunity, said Barry Dick, who left Merrill Lynch last year as its Asia head of debt products distribution and co-founded Opvs. "Asia has been sold off in line with the rest of the world. It really looks like a case of the baby thrown out with the bathwater," Dick said in an interview.

Dick founded the Singapore-based firm with three other Asia veterans: Chris Francis, who ran Asian credit and later equities research at Merrill; Sandeep Gill, former global credit derivatives head at DBS Group Holdings Ltd; and Tommy Kim, co-founder of Singapore-based HFG Investments Pte.

This team spent the past year building a 25-person firm that will be dedicated to the region and, for now, one asset class. "There are a lot of boutique operations in the region - five guys in a garage and a prime broker - but we wanted to build a large asset management company, the best in Asia, with very specialised investment teams."

Opvs is rolling out two funds in the coming month. First will be the Opus Asia Opportunity Fund, which will snap up loans from closely held, high-growth companies in a region reaching from China, Japan and Southeast Asia to India and Australia.

It has been seeded with $50 million and will complete its first round of fund-raising, but will continue adding money through the fall. The fund will hold these credits until maturity, with proceeds paid out as distributions after one year and then every six months until all the loans mature.

Later next month Opvs will launch Fundamental Asia Credit Fund with $50 million initially and growing to a maximum $300 million. The fund will invest in highly liquid and publicly traded bonds and short bonds through the swaps market.

In a sign of the times, both funds will provide shareholders with Internet access to their portfolio holdings. In contrast to just a year or two ago, when Asia was a top priority for every Western bank and fund manager, the fast growing region has become a lot less crowded. These same investors have been forced to shed portfolio holdings and often turn first to their Asian assets.

The potential returns on these investments are high, Opvs says, because loans extended by big banks like Merrill, Goldman Sachs and Morgan Stanley during the boom years of 2005 through 2007 are now being sold off at fire-sale prices.

In recent months, emerging markets funds have become a hot item in the hedge fund community. Still, for the relative few prepared to step in today, what was a sellers' market quickly has became bargain city.

"There's been a big shakeout since the credit crunch," Francis said. "That's left us in a situation where there is an excess of sellers of credit, or people holding credit, but not a lot of people who have balance sheets to take up that capacity."


(Reuters)

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Monday June 29, 2009

HONG KONG: Asian currencies ended the week mostly higher against the dollar after the US Federal Reserve maintained its stimulative monetary policy aimed at lifting the US economy out of recession.

JAPANESE YEN: The yen gained ground this week as the dollar faced selling pressure on expectations that US interest rates will remain low for some time, dealers said. The Japanese currency stood at 95.22 against the dollar in New York late Friday, compared with 96.31 a week earlier.

Lower US bond yields reduced demand for the greenback, dealers said. Investors tend to favour currencies offering higher returns. "The dollar faced selling, reflecting drops in long-term interest rates," said Yuji Saito, forex head at Societe Generale. The market continued digesting Wednesday's decision by the US Federal Reserve to leave its stimulative monetary policy unchanged, giving no sign that it was preparing to scale back its pump-priming measures.

The yen also benefited from safe haven flows after the World Bank on Monday sapped hopes that the global economy would show real signs of strength in the near future. "Investors exited high-yielding global growth sensitive currencies like the Australian and New Zealand dollars in favour of the 'safe haven' yen and US dollar," wrote NAB Capital strategist John Kyriakopoulos in a note to clients.

In times of economic uncertainty the yen and dollar are considered safer for investors who are more risk averse. But the yen's gains remained limited as Japanese consumer prices logged a record fall last month.

Analysts said the prospect of another prolonged bout of deflation in the world's second largest economy increased the chances of Japanese interest rates remaining low for some time, potentially reducing the appeal of the yen. The market is now waiting for the release next week of key US jobs data, dealers said.

AUSTRALIAN DOLLAR: The Australian dollar ended the week little changed, with positive economic news prompting a rally from earlier weakness, dealers said. The commodities-based Aussie closed Friday at 80.45 US cents, the same level as the previous week, after dipping to 78 cents in early trade. "The Australian dollar started the week on a soft note thanks to worries about the global growth outlook which put pressure on commodity prices," said AMP Capital Investors chief economist Shane Oliver.

"But as better economic data came through both commodity prices and the dollar recovered to be little changed," he said. Oliver said the Aussie was going through a period of correction, but was likely to remain broadly strong as commodity prices firmed and share markets recovered. In the short-term, local retail sales and building approvals data, due Wednesday, were likely to trigger a surge in the currency towards 85 US cents, said ANZ economist Amber Rabiniov. "However, the choppy nature of these data could mean that any impact is muted," she said.

NEW ZEALAND DOLLAR: The New Zealand dollar finished local trading Friday at 64.50 US cents, up from 63.85 the previous week. The kiwi moved in a range of around two US cents during the week, responding to moves in the US currency and the fortunes of equity markets.

News Friday that the New Zealand economy shrank one percent in the March quarter in its fifth consecutive quarterly contraction knocked nearly half a cent off the local currency but it recovered to be little changed. On Thursday, figures showing that the annual current account deficit declined in the March quarter to 15.25 billion dollars (9.76 billion US), amounting to 8.5 percent of gross domestic product, had little impact.

CHINESE YUAN: The yuan closed at 6.8338 to the dollar Friday, compared with Thursday's close of 6.8347 and a closing price of 6.8362 the week before. The central bank had set the yuan central parity rate at 6.8328 to the dollar Friday, compared with 6.8331 on Thursday. The People's Bank of China allows a trading band of 0.5 percent on either side of the midpoint.

HONG KONG DOLLAR: The US-pegged Hong Kong unit ended the week unchanged at 7.751.

INDONESIAN RUPIAH: The rupiah ended at 10,270 to the dollar, up from 10,390 the week before.

PHILIPPINE PESO: The Philippine peso rose to 48.305 to the dollar on Friday afternoon from 48.400 on June 19.

SINGAPORE DOLLAR: The dollar was at 1.4548 Singapore dollars Friday from 1.4565 the week before.

SOUTH KOREAN WON: The South Korean currency further weakened to 1,284.30 won to the dollar from 1,268.40 won a week earlier, as overseas players bought the greenback amid unstable global stock markets and concerns over North Korea's nuclear and missile programmes. Dealers said the won was likely to trade within a narrow range of around 1,280 to the dollar in the coming week. South Korea logged a current account surplus for the fourth straight month in May as imports fell faster than exports during the ongoing global economic slump, the central Bank of Korea said Friday.

The current account surplus stood at 3.63 billion dollars in May, compared with 4.25 billion dollars a month earlier.

TAIWAN DOLLAR: The Taiwan dollar closed at 32.925 against the US dollar, down from 32.878 a week earlier.

THAI BAHT: The baht rose against the dollar over the past week in moderate trading because of gains in the stock market and in line with other regional currencies, dealers said. The Thai unit closed Friday at 34.05-07 to the dollar compared with the previous week's close of 34.13-15.


(AFP)

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Monday June 29, 2009

SINGAPORE: The World Bank has launched a programme to help cities in developing countries achieve economic growth and high quality living standards without damaging the environment. With around 90 percent of urban growth world-wide taking place in developing nations and at a rapid pace, city planners are in a race against time to put in place the right policies that will benefit future generations, the bank said.

"Urbanisation in developing countries may be the single greatest change in our century," it said in a book outlining how the bank can help cities achieve economic growth and still have clean air and water and expansive greenery.

The programme was developed by an international team of experts from urban planning, transport, energy water and waste management and draws from the experiences of well-managed cities around the world. It incorporates the best practices from model cities such as Singapore, Stockholm in Sweden, Yokohama in Japan and Curitiba in Brazil. In co-operation with the bank, other cities in developing countries can implement these practices, principles and other practical methods and tools in accordance with their own local conditions.

The programme complements the bank's efforts to promote sustainable development and help cut greenhouse gas emissions blamed for climate change. Entitled "Ecological Cities as Economic Cities", the book cites projections that developing countries will treble their entire built-up urban area from 200,000 square kilometres (77,220 square miles) to 600,000 square km (231,661 square miles) between 2000 and 2030.

"One could say we are building a 'whole new world' at about 10 times the speed in countries with severe resource constraints," says the book, launched in Singapore at the weekend.

The rise of urban centres cannot be avoided because on average about 75 percent of global economic production takes place in cities, the book says. In many developing countries the share of urban centres in the total national economic output is over 60 percent, it notes. But while urbanisation has helped lift millions of people out of poverty, it has also led to an "unprecedented consumption and loss of natural resources", the book says. Lack of planning and an explosion in population growth has led to pollution, urban blight, poor water and sanitation conditions and the mushrooming of slum areas.

"Calculations already show that if developing countries urbanise and consume resources as developed countries have, an ecological resource base as large as four planet Earths would be needed to sustain growth," the book says.

It adds however that cities like Singapore, Stockholm, Yokohama and Curitiba have shown that economic growth, high-quality living standards and protection of the environment can go together. The book notes that many of the solutions adopted by these cities "are affordable even when budgets are limited, and they generate returns including direct benefits to the poor". Yumiko Noda, the deputy mayor of Yokohama, said at a seminar on "liveable cities" held in Singapore to coincide with the book's launching that citizens' involvement was crucial to a city's success. Yokohama in 2001 planned to cut the city's waste by 30 percent within 10 years but achieved its goal in just five years.

This has saved the city money and also slashed its carbon dioxide emissions, she said. Jim Adams, World Bank vice president for East Asia and the Pacific, said the pace of urbanisation has highlighted the urgency for an integrated economic and ecological approach to development. "There is only a short space of time in which to make an impact on how this development takes place," he said in a statement.


(AFP)

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Monday June 29, 2009

KARACHI: Increased budgetary borrowing (by Rs 19 billion) and improved net foreign assets of the banking system (up Rs 16 billion) along with a marginal increase in borrowing for commodity operations (Rs 3 billion) pushed up money supply during the week by Rs 24 billion after netting out the moderating effect of OINs reflecting an increase in other liabilities amounting to some Rs 14 billion.

Overall incremental money supply during FY09 to June 13 thus stood higher at Rs 338 billion, or 7.21 percent, represented by currency in circulation amounting to Rs 220 billion and deposit money amounting to Rs 118 billion. The increase during the week occurred entirely in deposit money, represented by an increase in demand and time deposits. No significant changes were observed in credit utilisation by the corporate sector including both the private sector and the PSEs.

All in all, net domestic assets (NDA) of the banking system, represented by public and private sectors indebtedness to the system's constituents, increased during the week by over Rs 8.5 billion to Rs 536.5 billion. Net foreign assets (NFA) of the banking system, in the meanwhile, improved by Rs 15.7 billion, reflecting lower depletion of foreign assets, which now stood reduced to Rs 198 billion.

The improvement in NFA was in line with the improvement in liquid foreign reserves of the country which surged from $11.515 billion on June 6 to over $11.643 billion on June 13. The surge over the week was shared by an increase of about $101 million in liquid reserves held by the central bank and an increase of about $27 million in liquid reserves held by the scheduled banks.

Among important developments during the week, government borrowing increased by Rs 22 billion to over Rs 600 billion as on June 13, 2009.

Within it, budgetary borrowing increased by Rs 19 billion to Rs 402 billion while borrowing for commodity operations by various government agencies and departments, which is principally for wheat procurement at present, increased by Rs 3 billion to over Rs 200 billion. Break-up of budgetary borrowing showed that almost entire borrowing during the week was made from the State Bank of Pakistan while borrowing from scheduled (mainly commercial) banks rose only by a negligible amount. Government's rising indebtedness to the central bank may pose serious problem for the government when it will come to meet the IMF targets of overall budgetary borrowing and, within it, the downward looking target of borrowing from the central bank. Maybe, the government has to go farther into the already aggressive borrowing made from non-bank elements or seek a benevolent review of the conditionals in view of the on-going operation against the militants in whose success IMF may be as interested as any other stakeholder.

NFA's details for component analytical accounts are available for the month of April 2009. According to this, NFA of the banking system depleted by about Rs 24.6 billion during April.

The entire depletion occurred on account of the State Bank of Pakistan as depletion at scheduled banks was only of a negligible amount. Further analysis of analytical accounts at the central bank showed that net depletion was a result of SBP's incremental claims on the non-residents, which showed an increase of about Rs 44.4 billion, adjusted for SBP's liabilities to the non-residents, which showed a much higher increase, of about Rs 69 billion, during the month.

The claims were in the form of monetary gold, etc, holdings of SDRs, foreign currency, deposits and securities other than shares, whereas liabilities were in the form of deposits, securities other than shares, and loans.


(BRecorder)

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Monday June 29, 2009

KARACHI: The investment under CFS declined by 34 percent, to Rs 6.6 million during the week ended on June 27, 2009. The CFS rate, however, increased to 50 percent till Thursday, while no significant transaction was witnessed on Friday. The top 5 scrips by CFS investment were NBP, POL, OGDC, UBL and DGKC, which cumulatively accounted for 67 percent of total investment.


(BRecorder)

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Monday June 29, 2009

SEOUL: North Korea's economy in 2008, before its latest falling out with the international community, grew to where it was three years ago, helped by a bumper harvest and foreign aid, South Korea's central bank said on Sunday. Even though the reclusive state's per capita income last year rose to around 1.2 million won ($930), it was still barely 5 percent of neighbouring South Korea.

"North Korea is presumed to have benefited from favourable weather for agriculture and international aid of oil and raw materials, mostly temporary supports. So it's hard to say its growth potential has improved much," the Bank of Korea said in a statement. It put growth in gross domestic product at 3.7 percent last year to 21.5 trillion won, or about 2 percent of the annual output of the South's economy which the North outstripped as late as the 1960s.

The economy fell 1.1 percent and 2.3 percent in 2006 and 2007, respectively.

North Korea's economy had grown by 6.2 percent in 1999, the start of a seven-year run of positive growth. But 2006 saw a return to economic decline as the North was hit by UN sanctions for defying the international community with its first nuclear test.

Tough new international sanctions, triggered by recent belligerence that included a second nuclear test in May, are likely to further squeeze the North Korean economy, analysts say.


(Reuters)

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Monday June 29, 2009

FRANKFURT: German luxury car maker Daimler launched its first hybrid model last week, almost 10 years after the market leader, Toyota. The world's best-selling limousine, a favourite of world leaders, the Mercedes Benz S Class, is now available in Europe with two motors, one electric and the other petrol (gasoline), to save fuel and cut pollution.

The "CO2 champion of luxury cars," as Mercedes bills it, nonetheless cranks out 186-189 grams of carbon dioxide per kilometre, remaining one of the biggest polluters on the road, well above the European average of around 160 grams.

A comparable S model with a normal engine can spew out as much as 234 grams, Daimler counters. A spokesman added that "we want to launch at least one hybrid model per year."

It is by all accounts a mini revolution in the German auto sector, which generally produces big, powerful cars by brands including Mercedes, Porsche, BMW and Audi.

Porsche plans to roll out a hybrid version of its Cayenne sports utility vehicle in late 2010, and BMW is preparing a saloon (sedan) from its Series 7 line this year, even though it is "too early to speak of full distribution," according to a BMW spokeswoman. Auto expert Gerd Lottspiesen from the environmental association VCD told AFP that the German car industry "has been asleep for several years."

"It repeatedly dismissed hybrids. If it is finally waking up, it's pretty late" compared with Toyota, which sold its first hybrid Prius model in Europe nine years ago. Lexus, the luxury line from Toyota, has offered a hybrid system for four years.

"For years, the German automobile sector did not believe hybrids had a chance ... but at a certain point, under market pressure, the industry changed its mind," said Stefan Bratzel, professor at a specialised auto centre in the western city of Bergisch Gladbach.

German companies mainly focused on diesel engines, the specialists noted. As a result, the German market is dominated by diesels, while hybrids represented only 0.2 percent of the market last year with the sale of 6,500 Toyota, Lexus or Honda hybrids, according to national registration figures.

Since its launch, Toyota has sold 22,000 Prius in France and around 17,000 in Germany, which has a market three times bigger, according to Toyota data.

"The Prius has never been a best-seller here," a spokeswoman for the Japanese group acknowledged. Germans, who are strongly attached to their national brands, could begin to switch over if domestic hybrid models are available however.

"The environmental trend is becoming dominant," said Frank Schwope, an auto analyst at the NordLB bank. Daimler is a good example.

Until now it has been considered one of the most resistant to environmental trends.

But in the past few months, Daimler has begun to highlight its determination in the area. It recently acquired a battery company and a 10 percent stake in the US electric car maker Tesla. A sign for auto specialists that Germans could be at the leading edge of the next big step, fully electric automobiles.


(AFP)

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Monday June 29, 2009

FRANKFURT: The biggest European car maker, Volkswagen, is mulling an investment in Japanese peer Suzuki, the German publication Manager Magazin said on June 25. VW is thinking of buying a 10 percent stake, the magazine said, quoting sources close to the company. But "no talks are in progress yet" and "we are still sniffing around," an unidentified VW director was quoted as saying.

A VW spokesman declined to comment when contacted by AFP. But VW development director Ulrich Hackenberg reportedly looked into the possibility during a trip to Japan a few weeks ago, and came back with a "positive impression," the monthly magazine said.

VW is reportedly interested in Suzuki's penetration of the Indian car market, where the German group lags behind, and by its very small models. In late May, VW said it was mulling a co-operation with the Chinese company BYD to build hybrid or electric cars.


(AFP)

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Monday June 29, 2009

AMMAN: Canada signed with Jordan on Sunday a free trade accord (FTA) that lifts tariffs on the vast majority of its exports as part of a push for greater access to Middle Eastern markets, diplomats and officials said.

"Doors will open up for products that have not been competitive because of tariffs," Canadian Trade Minister Stockwell Day told reporters in Amman after the signing ceremony of the first such accord with an Arab country. Canada already has an FTA treaty with Israel.

Canadian exports, mainly agri-food products, to the region nearly doubled in recent years and topped $64 million in 2008. Imports from Jordan stood at $12.8 million, mainly apparel and agricultural goods.

Jordan was the first Arab country to sign an FTA with Washington and is also a member of the WTO and has an association accord with the EU that paves the way for full lifting of tarrifs and customs. Western firms see the kingdom as a regional hub for wider business access to Iraq and neighbouring countries.


(Reuters)

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WASHINGTON: US President Barack Obama would be open to a second stimulus package if needed to boost the economy, but at the moment it doesn't look like more money is needed, a top White House adviser said on Sunday. "We have not broken the back of the recession," senior adviser David Axelrod told NBC Television's Meet the Press program. "We are going to have to sail through some very difficult times here."

President Barack Obama quickly pushed through a controversial $787 billion emergency stimulus package after taking office in January, and the White House said at the time this would keep unemployment from pushing into double-digits. However, the economy weakened by more than expected and the White House warned last week that the jobless rate could reach 10 percent in the coming months, up from 9.4 percent in May.

Axelrod acknowledged unemployment was bad. But he said it would have been even worse without the stimulus, and added that at the moment, it did not look like more money was needed.


(Reuters)

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Monday June 29, 2009

LAHORE: Based on Kibor mark-up rate, the government is considering a proposal to introduce Hedge Fund in the Trade Policy 2009-10 to facilitate exporters through export refinance facility. Under the scheme, if the mark-up rate, which is yet to be determined, goes up, the exporters would get the difference, but they would also be bound to pay back if mark-up goes down.

Federal Commerce Secretary Suleman Ghani said this in a meeting with members of Pakistan Tanners Association (PTA) here on Saturday, held in connection with seeking inputs for the upcoming trade policy. PTA central Chairman, Agha Saiduddin, gave a detailed presentation on leather industry's issue, while PTA (North Zone) Chairman Khurshild Alam also spoke.

The tanners emphasised on rupee-based 'Fund' rather than dollar, on which the Commerce Secretary asked them to submit their practicable suggestions so that the 'Fund' could be made beneficial to them. Responding to PTA demand for providing 25 percent financial cost of setting up design centres and laboratories in individual tanneries, Ghani said that the government has allocated substantial amount of Rs 40 billion for Export Investment Support Fund in the 2009-10 budget, out of which it could provide the required financial assistance.

He said the leather sector would be given due share from the Export Investment Support Fund, and asked the tanners to submit feasibility reports and practicable proposals for upgradation of the plants. The Secretary also agreed, in principle, to PTA demands for providing subsidy for setting up effluent treatment plants in individual tanneries contributing to 70 percent of total leather exports of the country.

About the demand for providing landfill sites near tanning industry for waste disposal and making mandatory the flaying machines in all slaughtering houses of the country to save hides and skins from butcher cuts, he said that both matters come under the jurisdiction of local governments. He asked the PTA to take up the matter with the local governments for which the federal government would be ready to provide financial assistance.

Responding to the PTA demand for including finished leather in the Free Trade Agreement (FTA) list of China, Ghani said the Ministry of Commerce agreed with the proposal and would take up the matter with the Chinese government. As far as the import of chemicals, particularly used in the tanning industry, is concerned, he said the potential tanners are in a position to import these chemicals on their own but the SMEs would have to rely on commercial importers.

The industrial importers could sell chemicals in the open market, that is tantamount to exploit the small tanners. He advised the small and medium size tanners to form a group so that they could also be allowed to import duty-free chemicals, and asked the Association to quantify the chemicals' demand. He also agreed with the proposal for allowing duty-free import of second-hand machinery for the tanning industry and asked to prepare a working paper on the import of new machinery and parts as well with a list of machinery.

About giving the National Institute of Leather Technology (NILT) Karachi under the control of Trade and Development Authority of Pakistan (TDAP), he disagreed with the proposal. He, however, supported the University of Veterinary and Animal Sciences (UVAS) Lahore's desire of taking over the NILT, and advised the PTA to create a firm with a view to make partnership with UVAS for getting the administrative control of NILT.

The Commerce Secretary termed the proposal of relaxing the National Environmental Quality Standards NEQs by 30-40 percent for three years as impracticable, saying that once the NEQs are established and propagated can not be changed, and some agencies could take notice of the change.

On providing exemption to tanning industry from load shedding being continued process, he said the demand is impracticable till the power shortage issue is resolved. He, however, advised the tanners to get into contractual agreement with the electricity distribution companies for reliable power supply and there must be a provision of penalty and compensation in the agreement in case of violation of the electricity supply schedule.

Responding to the demand for cheaper refinance facility at five percent mark-up, the Federal Commerce Secretary said the mark-up rate has already been declining and could further reduce. As a result, the refinance rate would automatically come down to five percent with the decline in the interest rate within next four-five months.


(BRecorder)

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Monday June 29, 2009

TRIESTE: Foreign ministers from Group of Eight countries said Saturday they supported the possibility of liberalising trade between the European Union and Pakistan. The possibility was raised earlier this month at a summit between the EU and Pakistan, in which the parties agreed to step up trade talks with a view to liberalising market access and possibly adopting a free trade agreement.

The G-8 held talks on stabilisation in Afghanistan and Pakistan that were extended to officials from the two countries and other regional players. The participants said in a statement Saturday that they ``welcomed the prospects of trade liberalisation.'' The statement said increased trade was crucial for the region's development and called for stronger ties between countries in the area.

The United States under the Obama Administration is supporting a proposal initiated under President George W. Bush that would allow poor tribal regions in Pakistan and Afghanistan to sell clothing and goods they make to US buyers tax-free.


(AP)

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Monday June 29, 2009

KARACHI: Downward trend was seen on the currency market during the week ended on June 27, 2009 on the brink of fiscal year 2008-09. On the interbank market, the rupee shed 10 paisa against dollar for buying at 81.45 and 20 paisa for selling at 81.50.

On the open market also the rupee followed the same pattern, losing 20 paisa for buying at 81.50 and 10 paisa for selling at 81.60. Versus the euro, also the rupee lost Re one for buying and selling at Rs 113.50 and Rs 114.00.

Inflows of dollars helped the rupee to resist sharp decline against the US currency and it is likely that the rupee may tackle the position when the greenback starts surging as a result of strong demand by importers. In the meantime, it looks that the rupee may touch the low at 82.00 in the short-run. According to the State Bank of Pakistan (SBP), the country's foreign exchange reserves rose by 130 million dollars to 11.77 billion dollars in the week that ended on June 20, compared with 11.64 billion dollars the previous week.

Inter bank Market Rates: On Monday, the rupee maintained its week-end levels against dollar for buying and selling at 81.35 and 81.40. On Tuesday, the rupee gained 3 paisa against dollar for buying at 81.32 and 5 paisa for selling at 81.35.

On Wednesday, the rupee lost 23 paisa in relation to dollar for buying at 81.55 and 25 paisa for selling at 81.60. On Thursday, the rupee recovered 13 paisa against dollar for buying at 81.42 and 14 paisa for selling at 81.46.

On Friday, the rupee gained 2 paisa for buying at 81.40 and one paisa for selling at 81.45.

On Saturday, the rupee shed 5 paisa versus dollar for buying and selling at 81.45 and 81.50.


Open Market Rates: On June 22, the rupee lost 20 paisa against dollar for buying at 81.30 and 35 paisa for selling at 81.50. The rupee, however, gained 20 paisa versus euro for buying at Rs 112.50 and 80 paisa for selling at Rs 113.00.

On June 23, the rupee shed 10 paisa against dollar for buying at 81.40 and 40 paisa for selling at 81.90. The rupee, however, maintained its firmness against euro, rising 90 paisa for buying at Rs 111.60 and 80 paisa for selling at Rs 112.10.

On June 24, the rupee gained 10 paisa versus dollar for buying at 81.30 and 30 paisa for selling at 81.60. The rupee followed the same pattern, soaring versus euro, rising Rs 1.65 for buying at Rs 113.25 and Rs 2.15 for selling at Rs 114.25.

On June 25, the rupee lost 10 paisa versus dollar for buying at 81.40 and selling at 81.70. The rupee gained 70 paisa against euro for buying at Rs 112.55 and for selling at Rs 113.55. On June 26, the rupee rose by 10 paisa against dollar for buying and selling t 81.30 and 81.60. The rupee, however, dropped 90 paisa versus euro for buying and selling at Rs 113.35 and Rs 114.35.

On June 27, the rupee shed 20 paisa gainst dollar for buying at 81.50 while it did not move to any side for selling at 81.60. The rupee, however, inched down by 15 paisa versus euro for buying at Rs 113.50 while it gained 35 paisa for selling at Rs 114.00.


(BRecorder)

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Monday June 29, 2009

ISLAMABAD: The Pakistan State Oil (PSO) has temporarily suspended fuel supply to many airlines, including Pakistan International Airlines (PIA), for the want of JP-1 fuel. A private news channel, quoting PSO sources, said that the fuel shortage was due to the annual repair work on National Refinery, which would be completed soon.

But Shell and Caltex lubricant companies have been continuously providing fuel to the airlines.


(APP)

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Monday June 29, 2009

ISLAMABAD: The Pakistan State Oil (PSO) has temporarily suspended fuel supply to many airlines, including Pakistan International Airlines (PIA), for the want of JP-1 fuel. A private news channel, quoting PSO sources, said that the fuel shortage was due to the annual repair work on National Refinery, which would be completed soon.

But Shell and Caltex lubricant companies have been continuously providing fuel to the airlines.


(APP)

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Monday June 29, 2009

TOKYO: The dollar edged up against the euro and the yen in Asian trade Monday as investors waited on the sidelines ahead of a series of key economic reports and a central bank meeting in Europe.

The dollar rose to 95.29 yen in Tokyo morning trade from 95.22 in New York late Friday. The euro fell to 1.4035 dollars from 1.4064 and to 133.71 yen from 133.95.

Investors were waiting for data due this week, with the focus on a US jobs report that will give a clearer picture of recovery prospects for the world's largest economy, said Hachijuni Bank forex strategist Yoshifumi Suzuki.

While the pace of job losses in the United States appears to have slowed recently, the unemployment rate hit a 26-year high of 9.4 percent in May.

The European Central Bank is expected to keep its lending rate unchanged at one percent when it meets Thursday, despite calls by the the Organisation for Economic Cooperation and Development to lower its main rate to close to zero.

Market players were also looking ahead to a closely watched survey of Japanese business confidence due out on Wednesday.

The Bank of Japan's quarterly "Tankan" survey is expected to show an improvement in sentiment among Japan's major manufacturers from a record low the previous quarter, helping to underpin improving investor confidence.

Government numbers released Monday showed that Japanese industrial output rose by 5.9 percent in May from the previous month, matching the previous month's growth, which was the fastest in half a century.

The data "underscores the view that the Japanese economy hit bottom in the April-June quarter," said Suzuki.

"But with consumption and wages still sluggish, it will be difficult to go so far as to say that a recovery will take place in the following quarter," he added.



(AFP)

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Monday June 29, 2009

SINGAPORE: Oil slipped further in Asian trade Monday as investors continued to worry over the state of the US economy, the world's biggest energy user, analysts said.

New York's main contract, light sweet crude for August delivery dropped 70 cents to 68.46 dollars a barrel while Brent North Sea crude for August delivery sank 68 cents to 68.24 dollars.

Both contracts closed lower Friday.

"Oil pricing is under pressure from concerns regarding the weak oil demand in the US," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

Crude fell at the end of last week during US trading hours after official data released Friday showed spending by American consumers rose a weak 0.3 percent in May from April, supported mainly by a massive government stimulus.

Personal savings rate shot up to a 16-year high, indicating consumers were wary of spending amid rising unemployment and plummeting home values, the data showed.

The report by the Commerce Department is widely watched because consumer spending accounts for two-thirds of US economic activity and is considered key to recovery from the severe recession that began in December 2007.

Crude prices have spiked up in recent weeks, boosted in part by the weak US dollar which means lower oil cost for purchasers using foreign currencies.

New unrest in oil-producing Nigeria was another factor which saw crude prices rising above 71 dollars at one stage during intra-day trading Friday, analysts said.

"Oil markets continue to monitor developments in Nigeria. In recent weeks, militants have attacked oil industry infrastructure in Nigeria," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

Nigeria, once Africa's leading oil producer, has seen its oil production affected by militants who claim they are fighting for a fairer share of oil wealth for impoverished communities in the Niger Delta.

The African country now produces about 1.8 million barrels of oil a day compared with 2.6 million in 2006.



(AFP)

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