Pakistani stocks close on four-year high

A trader on the floor of the Karachi Stock Exchange.—Reuters (File Photo)

ISLAMABAD: Pakistan’s main stock market ended on a four-year high on Wednesday with investor confidence boosted by below-expectation inflation data for July, dealers said.
The Karachi Stock Exchange benchmark 100-share index gained 139.86 points, or 0.96 per cent, to close at 14,716.86 on volume of 62.9 million shares, its highest close since May 2008.
“Lower-than-expected inflation numbers for July pushed (up) the KSE-100 index,” said Samar Iqbal, a dealer at Topline Securities.
Pakistan’s Consumer Price Index (CPI) rose 9.60 per cent in July from a year earlier, the Pakistan Bureau of Statistics said on Wednesday. The year-on-year rate was 11.26 per cent in June.
In the currency market, the rupee closed almost flat at 94.61/67 to the dollar, compared with 94.62/68 on Tuesday.
Overnight rates in the money market closed lower at 11 per cent, compared with 11.90 per cent on Tuesday, because of increased liquidity.

India keeps key interest rate on hold

MUMBAI: India’s central bank kept its key interest rate unchanged on Tuesday for the second time in two months and slashed its growth forecasts for Asia’s third-biggest economy.
The Reserve Bank of India (RBI) said the benchmark repo rate, at which it lends to commercial banks, would remain at 8.0 per cent because of the risks of inflation.
The bank cut its statutory liquidity ratio for commercial banks by 100 basis points to 23 per cent, which it said should help to boost the credit available to businesses.
The move to hold interest rates had been widely expected by economists after the bank hinted in a report released late Monday that it was unable to cut them further at this point to spur the flagging economy.
“The primary focus of monetary policy remains inflation control in order to secure a sustainable growth path over the medium-term,” said a release from the bank after Tuesday’s decision.
India’s once-booming economy grew just 5.3 per cent between January and March, its slowest annual quarterly expansion in nine years, and the bank revealed gloomy predictions for the near-term future.
It slashed India’s GDP growth forecast for this financial year, which started April, from 7.3 per cent to 6.5 per cent, while predicting that inflation would be higher than previously forecast.
While other central banks around the globe have been easing interest rates in bids to revive their troubled economies, the RBI suggests that economic reforms to boost investment are the key to India’s revival.
The bank lowered rates in April to kickstart growth — its first such move in three years. But it has since kept monetary policy steady, citing inflationary pressures, despite calls from business leaders to stimulate the economy.

Sinopec resists bargain Iran crude, eyes US ties

Oil tanks are seen at a Sinopec plant in Hefei, Anhui province, in this picture. Chinese refining giant Sinopec Corp, the biggest buyer of Iranian oil, has no plans to raise its Iranian crude imports for the rest of 2012 so as to avoid falling foul of tough U.S. sanctions on Tehran’s oil trade, a senior Chinese oil executive said. – Reuters photo

BEIJING: Chinese refining giant Sinopec Corp, the biggest buyer of Iranian oil, has no plans to raise its Iranian crude imports for the rest of this year so as to avoid falling foul of tough US sanctions on Tehran’s oil trade, a senior Chinese oil executive said.
China is the only one of Iran’s four major Asian oil buyers that could still face penalties from the United States once sanctions kick in on June 28. Washington on Monday added India and South Korea to a list of countries, that already includes Japan, exempt from sanctions.
Washington has exempted countries it considers have significantly reduced imports, in line with its aim of choking Tehran’s oil revenue to force a halt to a nuclear program the West suspects is aimed at making weapons. Iran says its nuclear work is for civilian purposes.
While China made big cuts in first-quarter imports, the US is wary that Beijing might find it difficult to resist a cut-price offer if Iran tries to sell crude it can no longer export to other buyers later this year.
Sinopec has already resisted such offers, said the Beijing-based official who has knowledge of the refiner’s trading operations. “The Iranians have made some offers, but we have turned them down,” the official said, declining to elaborate.
“The economic benefits of filling some discounted Iranian oil into the national oil reserves would be too small a consideration for the state. The key concern for the Chinese government would be China-US relations.”

STRATEGIC STORAGE
China is Iran’s top trade partner and Beijing has publicly criticised sanctions against Tehran outside the framework of the United Nations. Still, China’s state-owned energy giants have made big investments in the United States, perhaps making them more mindful of sanctions.
China is the world’s second-largest oil consumer and is building up strategic storage across the country to deal with any surprise supply outages. Expectation in the oil market has been that sooner or later, Beijing would become Iran’s buyer of last resort and take the crude into its tanks.
But Sinopec has set its 2012 import target for Iranian crude at 400,000-420,000 barrels per day (bpd), 16-20 per cent below last year’s 500,000 bpd, said the official, asking not to be named.
“One thing is for sure: within this year, there will be no increase (over the target) in Iranian oil,” he said. “The nearly 20 per cent cut shows China places the relationship with the United States at the very top level. The US should really appreciate what China has done and not push for more in a condescending manner.”
Sinopec more than halved its Iranian crude imports in the first quarter as it tussled with Tehran over the terms of its annual oil purchasing contract, industry sources have told Reuters. The 16-20 per cent cut detailed by the official for the full year was a little more than the 14 per cent annualised cut Reuters estimated after those contract disputes ended and Sinopec imports started to recover in April.
“If you compare actual loadings from April onward, you’re going to see almost the same amount of oil being lifted from Iran versus a year ago,” the official said.

EU INSURANCE
A bigger potential threat to Iran’s crude flow to Asia has been posed by European Union sanctions, which ban EU firms from insuring tankers carrying Iranian crude from July 1. European insurers cover most of the world’s tankers, and Asian importers have struggled to find ways to put alternative insurance in place to keep imports flowing.
The Chinese official said the insurance ban would not pose a problem to China, although he did not detail how importers would continue importing. “So long as China wants to solve this problem, there must be a way. It won’t be a difficult issue for China. We are fully capable of sorting it out,” he said.
Among the options, Iran could deliver the crude on its own tankers, he said.
Indian state-owned refiners will halt planned imports of 173,000 bpd from Iran when EU sanctions take effect next month, unless the government allows them to use insurance and freight arranged by Tehran, industry sources said on Monday.

Low-carbon farming takes root in Brazil’s Amazon

An overview of the Carajas National Forest in the Amazon Basin

ANAPU: Manoel Jose Leite, a small-scale organic farmer, is set to pioneer low-carbon agriculture in Brazil’s Amazon rainforest, which for decades has been destroyed by expanding agribusiness.

Finding the right balance between agriculture and environmental protection will be one of the major challenges on the agenda of the UN conference on sustainable development, which opens in Rio on Wednesday.
The issue is particularly pressing for leading grain exporter Brazil, 40 per cent of whose huge territory is covered by the Amazon rainforest.
“We have learned a lot from the environment. We have some ideas of what reducing CO2 emissions means and we know that we must protect the Amazon,” says Leite, who tills land in Brazil’s northern Para state.
He arrived in this northern Brazilian city in 1974 when the then-military government encouraged people to settle the region by opening highways such as the Trans-Amazonian, which cuts through Anapu.
“There was only forest. The government wanted to settle the area. The more we cut trees, the better. If I had known then what I know now, it would have been different. I would have protected the forest,” the 62-year-old told AFP as he stood by a spring on his land, which once was used for grazing.
Today he protects the environment with native tree reforesting, including planting Amazon rainforest trees such as cocoa, cupuacu and acai.
Leite is about to join a new project financed by Brazil and Norway that will help 2,600 families rehabilitate deforested areas with low-carbon farming, energy production and efficient use of resources.
“We want to show that you can have low carbon farming that reconciles forest preservation, food production and quality of life in the Amazon, where 25 million people live,” said Lucimar Souza, of the non-governmental Amazon Environmental Research Institute (IPAM).
Similar projects are proliferating in the region.
“Between the 1992 Earth summit and the Rio+20, we went from unplanned production based on destruction of the forest to an awareness that this model is not sustainable,” said Joao Batista, coordinator of the Live, Produce, Preserve Foundation.
Asked what was needed to make this remote region sustainable, Batista replied with a sigh: “a lot”, underscoring the need for programs, technology and funding.
The reconversion coincides with a government commitment to combat the massive deforestation that has made Brazil one of the world’s top greenhouse gas emitters.
The pace of deforestation peaked in 2004 at 27,000 square kilometres a year.
But last December, the National Institute of Space Research (INPE) said deforestation had dropped to 6,238 square kilometres per year, the lowest level since monitoring began in 1988.
The Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) has taken action to crack down on 50 deforested zones spotted by satellites and to determine whether timber used in Anapu sawmills is legal.
Such action marks a drastic improvement from 2005, when local big landowners ordered the killing of US missionary Dorothy Stang, who was campaigning for sustainable forest projects in the face of large-scale illegal logging.
“With these sporadic actions we have significantly slowed down the deforestation” in recent years, said Eduardo Lameira, the head of a task force equipped with a helicopter and 4×4 vehicles to raid remote areas.
But challenges remain, and Brazil’s dilemma was illustrated by the recent implementation of a new forest code, passed after a bruising congressional battle between the powerful agribusiness lobby and environmentalists.
The new code maintains a requirement to protect 80 per cent of the forest in rural areas of the Amazon and 35 per cent of the Sertao, the arid hinterland of north-eastern Brazil. But it eases restrictions for small landowners who face difficulties in recovering illegally cleared land.
In 1974, Brazil produced 20 million tons of grain, cereals and oilseeds.
Today, it produces 160 million and has become a leading exporter of sugar cane, meat, soybean and timber at the cost of large-scale Amazon deforestation.
“Today we know that we cannot produce the way we did 40 years ago. We have enough deforested areas and the technology to use them for more efficient farming which preserves the environment,” said Savio Mendoca, an adviser at the Brazilian Agricultural Research Corporation.
The issue will hotly debated at the Rio+20 conference, which will be attended by more 115 world leaders June 20-22, with the aim of charting a course toward a “green” economy that can balance economic growth with poverty eradication and environmental protection.

Exporters advised to send food items to Indonesia

KARACHI, June 7: Indonesian consul general Rossalis R. Adenan has advised Pakistani exporters to concentrate on food products, including rice and fresh fruits, for export to his country and hoped that enforcement of preferential trade agreement (PTA) signed between the two countries will help boost bilateral trade which presently stands at around $1.1 billion.
Speaking at a luncheon meeting organised by the Small and Medium Enterprises Alliance (Samea) here on Thursday, he invited Pakistani businessmen to participate in Jakarta exhibition scheduled for October.
Mr Adenan said small and medium enterprises were playing vital role in economic growth of Indonesia and stressed the need of government support for Small and Medium Enterprises  in the agriculture sector.
He said that the 1998 financial crisis in Indonesia had resulted in collapse of big businesses and companies and put pressure on the local currency which deprecated tremendously against the dollar.
But SMEs managed to hold ground and help the economy recover fast, he added.
As a result of this experience, he said, the government had decided to give greater role to the ministry of cooperative and small and medium enterprises which directly supported the SME sector and presently 80 per cent of Indonesian workforce was engaged with Small and Medium Enterprises.

Oil prices

LONDON, June 7: Oil prices rebounded on Thursday after a decision by China’s central bank to slash its key rate for the first time since 2008 and ahead of remarks by US Federal Reserve chief Ben Bernanke.
In afternoon London deals, Brent North Sea crude for July rose $1.06 cents to $101.70 per barrel.
New York’s main contract, West Texas Intermediate crude for delivery in July jumped 1.16 cents to $86.18 a barrel.
Crude futures had risen Wednesday on the European Central Bank’s signals of support to ailing eurozone banks.

Forex & Gold 8 June 2012

Forex Update:

KARACHI, June 08: The Pakistani Rupee was traded at 94.7 to the US Dollar in the open market. (Bureau Report) (Updated @ 10:00 PST)

Note: We do not receive Foreign Exchange Rates regularly.

The last received rates are given below.

Spot rates for public per unit of currency
June 7, 2012
Countries		Selling	Buying	Buying
		T.T & O.D	T.T Clean	O.D/T.Chq
U.S.A.		93.9	93.7	93.5
U.K.		145.33	145.02	144.69
Euro		117.98	117.73	117.47
Saudi Arabia		25.04	24.98	24.92
Qatar		25.79	25.74	25.67
U.A.E.		25.57	25.51	25.44
Source:-APP

Exchange Rates for Currency Notes
Countries		Selling	Buying
		Rs.	Rs.
U.S.A		94.84	92.56
S. Arabia		25.29	24.67
U.K		146.79	143.24
Japan		1.1953	1.166
Euro		119.16	116.3
U.A.E		25.82	24.68
Source: -APP

Bullion rates in Rupees per 10 grams
on June 7, 2012
KARACHI
Gold Tezabi (24-ct)	Rs 49,285
Silver Tezabi	Rs 848.57
MULTAN
Gold Tezabi (24-ct)	Rs 48,430
Gold (22-ct)	Rs 44,280
Silver Tezabi	Rs 830.00
Silver Thobi	Rs 800.00

Pakistan’s exports up by four per cent in Feb 2012

KARACHI: Pakistan’s exports in February 2012 grew by 4.15 per cent to $2.034 billion, however it decreased by 5 per cent over the same month of last year 2010-11.

According to TDAP, the latest trade figure shows that Pakistan’s exports during February 2011 were valued at $1.953 billion and 5 per cent lower than the level of $2.141 billion during February 2011.

Imports during February 2012 were valued at $3.462 billion registering a growth over the level of imports valued at $3.053 billion in February 2011.

However, the cumulative trade figure shows that Pakistan’s exports during July-February 2011-12 stood at $15.189 billion, while in the corresponding period of the last year 2010-11 exports were $15.263 billion, which shows a negligible decline 0.5 per cent.

Imports during July-February 2011-12 were $29.789 billion as compared to $25.599 billion during the same period of the year 2010-11, registering a 16.37 per cent growth.