Friday July 10, 2009

KARACHI: Bearish sentiment persisted on the interbank market on Thursday as the rupee fell five paisa more against dollar for buying and selling at 81.75 and 81.80, dealers said. Strong demand for dollars kept the rupee in drifting position and it appeared that if buying pressure continues, the rupee may touch the mark of 82, they said.

In the fourth Asian trade yen slid, falling from a five-month high against dollar and a two-month peak versus euro hit the previous day when doubts about the health of the global economy spurred risk aversion. The dollar and euro both fell more than two percent against yen on Wednesday, posting their sharpest one-day drops since March, according to data from trading platform EBS.

Open Market Rates: The rupee moved both ways versus dollar as it lost five paisa for buying at 81.80 while it gained the same amount for selling at 82.05, dealers said. The rupee maintained its surge versus euro rising 19 paisa for buying and selling at Rs 112.38 and Rs 113.38, they said.

Buying Rs 81.75
Selling Rs 81.80

Interbank Closing Rates: Interbank Closing Rates For Dollar On Thursday.

Open Buying Rs 81.80
Open Selling Rs 82.05

(BRecorder)

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Friday July 10, 2009

KARACHI: The total liquid foreign exchange reserves held by the country stood at $12,269.8 million on the week ended July 4, 2009. According to the State Bank of Pakistan, foreign exchange reserves held by the State Bank were $8,963.8 million while net foreign exchange reserves held by banks other than SBP were $3,306.0 million.


(BRecorder)

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Friday July 10, 2009

KARACHI: The declining trend in benchmark lending rate in Pakistan will be a sigh of relief for the large scale manufacturing sector that posted a decline of 8 percent last year. The declining cost of borrowing may help revive partially the economic activity in the country, analysts said. Six-month Kibor settled at 12.1 percent on July 9, 2009, posting a sharp fall of almost 360 bps in this calendar year till date.

Last time this rate was seen in May 2008. Amid ample liquidity in the money market coupled with CPI inflation in the month of June 2009 at 16-month low 13.1 percent, it is estimated that Kibor may fall below 12 percent, Muhammad Sohail, a leading analyst said. Listed leverage companies would be the main beneficiaries of declining lending rates like Engro, DG Khan Cement, he added.

(BRecorder)

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Friday July 10, 2009

ISLAMABAD: The CPI inflation for June-July 2008-09 surged by 20.77 percent as compared to the same period of last year, reveals official figures of Federal Bureau of Statistics, released here on Thursday. Official monthly figures on inflation, however, showed substantial decline of 13.13 percent in the CPI in June 2008-09 over 21.35 percent for the same month last year.

The SPI and WPI also decreased to 10.80 percent and 4.15 percent respectively in June over 30.02 percent and 30.62 percent for the same month of last year. With this decline, according to the FBS, food inflation has come down to 10.50 percent in June. The inflation target is set in single digit for the next fiscal year.

Further analysis of the data showed that increase in WPI and SPI was 18.10 percent and 23.41 percent respectively during July-June 2008-09 as compared to 16.41 percent and 16.81 percent for the same period last year. The Consumer Price Index in June 2009 increased by 0.99 percent over previous month and 13.13 percent over June last year.

With this increase in CPI, the inflation in food items was noted 10.50 percent, non-perishable food items 8.99 percent, perishable food items 22.96 percent, apparel, textile and footwear, 10.93 percent, and 18.60 per cent in house rent in June 2009.

The CPI for the period under review on fuel and lighting was noted 23.78 percent, household, furniture and equipment, etc, 10.75 percent, transport and communication 5.01 percent, recreation and entertainment 4.53 percent, education 19.18 percent, cleansing, laundry and personal appearance 14.26 percent and medicare 6.26 percent.

The main commodities which showed an increase in their prices during June, 2009 over May are tomatoes (71.40 percent), potatoes (38.16 percent), gur (8,32 percent), pulse mash (3.38 percent), milk fresh (3.22 percent), pulse moong (3.14 percent), milk products (3.09 percent), cooking oil (2.81 percent), vegetable ghee (268 percent), vegetable (2.32 percent), sugar (0.96 8 percent), etc. Wholesale price index surged by 2.40 percent in June 2009 over May and food items 0.54 percent.

(BRecorder)

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Friday July 10, 2009

LONDON: The dollar and yen both fell on Thursday as investors recovered their appetite for risk and other major currencies recouped some of their losses the day before. Sterling got a boost from a decision by the Bank of England to keep its main interest rate unchanged and hold steady its asset purchase facility despite market expectations that the programme would be expanded. In late London trade, the European single currency rose to 1.4034 dollars from 1.3885 dollars in New York late on Wednesday. The dollar fell to 92.77 yen from 92.86 yen late Wednesday. Mounting uncertainty about prospects for a global economic recovery has in recent days supported the yen, which is seen as a safe haven during times of market turmoil, dealers said. "The huge out performance of the yen during the last week is a clear and screaming sign of risk aversion," said Societe Generale analyst Patrick Bennett. Investor sentiment soured after Group of Eight leaders meeting Wednesday in the Italian town of L'Aquila warned that the World economy was still in danger. In a communique, the G8 nations said there remained "significant risks" for economic and financial stability. During the meeting, China's state councillor Dai Bingguo Thu told leaders that the international currency regime should become more diversified, a Chinese official told reporters. This added to pressure against the dollar, which is the world's biggest reserve currency. Any diversification would reduce demand for the US unit. In other news of interest to the foreign exchange market, leaders are to pledge to abstain from competitive currency devaluations in a joint statement to Thursday. Investors also absorbed news that new claims for US unemployment benefits fell 8.4 percent last week to a six-month low, suggesting some improvement in the troubled job market. The Labour Department said that initial claims for unemployment insurance benefits fell to a seasonally adjusted 565,000 in the week ended July 4. In Britain, the Bank of England surprisingly decided against pumping billions of extra pounds into money markets to boost lending on Thursday, as it kept its key interest rate at a record-low 0.5 percent. While the rate decision was widely expected, many economists believed the BoE's Monetary Policy Committee would announce plans to create an extra 25 billion pounds (28.9 billion euros, 40.4 billion dollars) under its quantitative easing (QE) scheme. "The Bank's decision not to inject further money into its quantitative easing programme has caught the market off guard and the relief has helped return short-term confidence in sterling," said Mark O'Sullivan at Currencies Direct. Under QE a process which amounts to creating new money the British central bank buys government bonds from commercial banks in the hope that the institutions will lend once again to businesses and individuals. In London trade Thursday, the euro was changing hands at 1.4034 dollars against 1.3885 dollars late on Wednesday, 129.50 yen (128.96), 0.8608 pounds (0.8642) and 1.5127 Swiss francs (1.5132). The dollar stood at 92.77 yen (92.86) and 1.0835 Swiss francs (1.0895). The pound was at 1.6217 dollars (1.6063). On the London Bullion Market, the price of gold fell to 911.75 dollars an ounce from 918 dollars an ounce late on Wednesday. (AFP)

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Friday July 10, 2009

LONDON: European stock markets halted a three-day losing streak Thursday and finished in positive territory on better-than-expected US employment data. Sentiment was also boosted by news that US aluminium giant Alcoa had limited its second quarter loss to 454 million dollars, a better showing than the market had expected. In London the FTSE 100 index gained 0.45 percent to close at 4,158.66 points while in Paris the CAC 40 rose 0.54 percent to reach 3,025.94. The Frankfurt Dax added 1.26 percent to close at 4,630.07. Elsewhere in Europe there were gains of 1.18 percent in Milan, 0.88 percent in Madrid, 1.01 percent in Amsterdam and 0.30 percent on the Swiss Market Index. Wall Street wavered in early trade as investors fretted that the corporate earnings season would trample on signs of recovery from the severe recession. The Dow Jones Industrial Average had risen 0.13 percent to 8,188.84 at 1545 GMT. The tech-heavy Nasdaq composite gained 0.62 percent to 1,757.94. New York stocks pared back opening gains that had been bolstered by the Alcoa results, which unofficially kicked off the new round of quarterly corporate earnings. "With Wall Street nearly shaking in its boots ahead of a new round of corporate earnings, Alcoa Inc.'s better-than-expected quarterly report came as a breath of fresh air," said Joseph Hargett of Schaeffer's Investment Research. Alcoa, which jumped more than 4.0 percent in opening trade, was down 0.74 percent at 9.39 dollars. "There has been a sharp increase in investor pessimism in recent days," said Scott Marcouiller of Wells Fargo Advisors. On the macroeconomic front, new claims for US unemployment benefits fell 8.4 percent in the past week to a six-month low. But the number was skewed by fewer-than-expected layoffs in the automotive sector, the Labor Department said. The Labor Department said that initial claims fell to a seasonally adjusted 565,000 in the week ended July 4, shortened by the Independence Day holiday. Andrew Gledhill of Moody's Economy.com said the Labor Department's seasonal adjustment "anticipated a jump in layoffs due to summer auto plant shutdowns. Since these layoffs had already occurred, the jump never materialized, sending claims plummeting." In Europe, the US employment data was enough to spark a modest rebound, although gains began to fade in line with a loss of momentum on Wall Street. Trading volumes were weak in the absence of further data. "I don't think investors have much of an appetite when there are few indicators," said Alice Lhabouz of Turgot Asset Management. State-owned electricity group EDF nonetheless shot up 1.32 percent to reach 31.36 euros after its chief executive, Pierre Gadonneix, said the company was looking for a 20 percent hike in tariffs over three years. With a pick-up in crude prices in New York, oil giant Total rose 1.07 percent to finish at 36.60 euros. In Frankfurt steel makers, under heavy pressure on Wednesday, bounced back. ThyssenKrupp added 1.38 percent to reach 16.85 euros while Salzgitter gained 2.37 percent to finish at 58.65 euros. Mining issues were among the day's big winners in London, where Anglo American rose 5.59 percent to 1,651 pence and Rio Tinto 3.77 percent to 1,967 pence. Markets were mixed in Asia Thursday with a stronger yen sending Tokyo's market down for a seventh straight session, while jitters left many dealers sidelined before the corporate earnings season. Japan's Nikkei lost 1.38 percent, while Sydney was 0.12 percent off. However, Hong Kong bounced back from early selling pressure to rise 0.39 percent and cap a three-day losing streak, with dealers following further gains in China's markets. Shanghai added 1.37 percent on strong car sales, while Singapore added 2.11 percent. (AFP)

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Friday July 10, 2009

NEW YORK: US stocks edged higher on Thursday as investors bought beaten-down technology and commodity shares, while a positive broker comment on Goldman Sachs boosted the financial sector. Trading was choppy in light volumes for most of the day as investors remained cautious ahead of more corporate earnings reports in the coming weeks. Alcoa Inc set a positive tone when it kicked off the earnings season with a smaller-than-expected loss after the bell on Wednesday. The Dow industrials closed just above break-even as shares of healthcare and consumer staples companies weighed. Merck & Co Inc fell 3.7 percent to $27.01 on speculation its Zetia cholesterol drug fared poorly in a clinical trial comparing it to a drug from Abbott Laboratories. Merck was the biggest weight on the Dow. Sentiment remained cautious ahead of the release of more US corporate earnings, said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia. "Investors are still in more of a wait-and-see mode," he said. "I still think we're in this grinding phase, this choppiness, because I don't know that we're going to get a whole lot out of earnings." The Dow Jones industrial average gained 4.76 points, or 0.06 percent, to 8,183.17. The Standard & Poor's 500 Index added 3.12 points, or 0.35 percent, to 882.68. The Nasdaq Composite Index rose 5.38 points, or 0.31 percent, to 1,752.55. A Treasury bond auction of 30-year debt showed signs of strength, providing some cheer for investors concerned about the growing mountain of US government debt. Shares rose to session highs not long after the auction. "A lot of people went short in anticipation of a poor auction and then had to cover when the auction actually went better than everyone thought," said Jack Ablin, chief investment officer at Harris Bank in Chicago. He referred to the strategy of short-selling, which involves selling borrowed shares in the hopes of buying them back when prices fall. Goldman rose 3.4 percent to $143.21 after Bank of America Securities-Merrill Lynch upgraded its rating to "buy" and raised its earnings estimates, saying the firm's earnings power and book value were increasing rapidly again. The S&P financial sector led the S&P 500 with a gain of 1.4 percent. Energy shares rose, with the S&P energy index up 1.1 percent as crude oil futures edged up. Oil giant Chevron Corp, which is expected to report interim quarterly results later on Thursday, was up 0.5 percent to $63.08. Within the tech sector, KLA Tencor Corp shot up 4.9 percent to $26.36 after Barclays upgraded the chipmaker to "overweight." The PHLX semiconductor index gained 2.8 percent. The number of US workers filing new claims for jobless benefits fell to the lowest level since January, but the seasonally adjusted data was distorted by an unusual pattern of layoffs in the automotive industry. (Reuters)

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Friday July 10, 2009

TOKYO: The yen fell slightly against the dollar in Asian trade Friday as investors regained some of their appetite for risk, reducing the appeal of the ‘safe-haven’ currency, dealers said. The dollar edged up to 93.02 yen in Tokyo morning trade from 92.96 in New York late Thursday. The euro eased to 1.3993 dollars from 1.4024 and to 130.16 yen from 130.42. The yen drifted lower as Japanese funds prepared to purchase risky higher-yielding currencies of emerging economies such as Brazil, Turkey and South Africa, Royal Bank of Scotland strategist Masafumi Yamamoto said. But the yen, which is seen as a safe haven during times of economic turmoil, could resume its rally if US consumer data or earnings reports due out later in the day disappoint markets, he told Dow Jones Newswires. If the University of Michigan consumer sentiment index shows a big fall, "that could lead to stock weakness and yen strength," Yamamoto said. On Wednesday the dollar fell to a near five-month low of 91.81 yen, adding to worries about the outlook for Japanese exports. Economic and Fiscal Policy Minister Yoshimasa Hayashi said that the yen's rise posed a threat to the fragile economy. "If the yen's rise and stock declines last a long time, there are concerns they may have a negative impact on both exporter and overall sentiment," he told reporters. "For this reason, we need to keep monitoring moves in the stock and currency markets closely," he added. Markets are watching Japanese officials' comments carefully for any signs that Tokyo may be considering intervening in the market to curb the yen's rise, although analysts say it is unlikely to make a move at current levels. The British pound gave back some of its sharp gains seen on Thursday, when a decision by the Bank of England not to expand its emergency asset purchase facility surprised markets. The pound fell to 1.6279 dollars from 1.6341. Traders were also digesting data showing that Japanese wholesale prices dropped by a record 6.6 percent in June from the previous year, deepening concerns that the economy is heading into another bout of deflation. (AFP)

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Friday July 10, 2009

ISLAMABAD: The Petroleum Development Levy Ordinance 2009 has been challenged in Supreme Court (SC), Aaj News reported on Friday. Chaudhry Ikram, the lawyer of Shoaib Shahid has filed a petition challenging the presidential ordinance and stated that president has no right to impose tax under constitution article number 77. The president had signed the ordinance on the advice of prime minister to raise petroleum prices and restored them to July 7 position. (Aaj Tv)

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Friday, July 10, 2009

SINGAPORE: Oil traded below 61 dollars in Asian trade Friday, surrendering overnight gains amid persistent worries over the weak global economy, analysts said. New York's main contract, light sweet crude for August delivery was 33 cents lower at 60.08 dollars a barrel Brent North Sea crude for August delivery eased 30 cents to 60.80 dollars. New York crude tumbled below the 60-dollar mark in intra-day trade Thursday, the first time since May 26. The contract has lost more than 13 dollars from its highs last month. "When we take a step back, the correction doesn't surprise us," said Gavin Wendt, a Sydney-based mining and resources analyst with Fat Prophets research consultancy. Crude prices rose above 73 dollars early last month, up more than 60 percent since the start of the year, fuelled partly by a weak US dollar and overly upbeat hopes of a recovery in the global economy, analysts said. "The demand-supply situation doesn't justify that sort of a rapid rise over such a short period of time," said Wendt. "It left itself vulnerable to some degree of correction especially when the demand situation hasn't justified that sort of price rise." A weekly energy reserves report released Wednesday by the US Department of Energy is also weighing down on crude prices as gasoline stocks rose by a bigger-than-expected 1.9 million barrels in the week to July 3. The US is the world's biggest oil consumer and the gasoline data is closely monitored at this time of the year because consumption typically picks up when Americans take to the roads for their summer holidays. US oil product stockpiles have ballooned in recent weeks because of weak demand amid a severe recession, and overall oil demand over the past four weeks was down 5.9 percent from the same period in 2008. "With crude oil and petroleum product inventories at very high levels, we think any near-term upside to oil prices will be limited," Francisco Blanch said in a Bank of America Securities-Merrill Lynch research report. (AFP)

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