Tag Archives: keeps

What keeps Victoria’s Avalon Airshow airborne?

Posted February 22, 2013 15:35:01

Say the word Airshow, and many will think of fatal fireballs and terrifyingly close calls as stunt pilots ply their trade.

Fingers’ crossed, a Royal Australian Air Force Hercules shooting fireworks-like flares next week is the closest the 2013 Avalon Airshow comes to that stereotype.

Rather, that is the “2013 Australian International Airshow and Aerospace & Defence Exposition.”

“The thing about Avalon is that it really is two concurrent events,” Airshow Chef Executive Ian Honnery tells the ABC.

He speaks in short bursts, interrupted by a commentator describing the airliner-like comforts of the McDonnell-Douglas C-17A Globemaster Military Transport plane that roars overhead.

Mr Honnery continues; “Avalon is a major public aviation spectacular, and at the same time, it’s an international aerospace and defence aviation exposition.”

Meanwhile, the commentator informs us that the C-17 has two bedrooms and fully functioning toilets onboard, in case you were wondering.

The behemoth plane, capable of carrying 70 tonnes of cargo, is undoubtedly impressive.

The commentator is joined by RAAF Air Commodore David Pietsch.

Air Commodore Pietsch regales the assembled crowd with a tale of how an American C-17A was able to land, fully laden with earthmoving equipment, on a rough, unprepared patch of desert in Afghanistan. It then disgorged its cargo, allowing the machines to then plough a smoother airstrip for future operations.

Quite a feat no doubt, although hardly the sort of acrobatics display that is likely to draw the punters to an airshow. So why are the assembled scribes being told this?

Back to CEO Ian Honnery, and his two-shows-in-one explanation. “On the exposition side of it, what you have is six days of trade exhibitions – 600 exhibitors from 21 countries, 75 military and commercial delegations, 21 conferences and symposiums,” he explains.

The flags adorning the numerous marquees surrounding the tarmac sport a number of the aviation and defence contractors: Boeing, Northrop Grumman & Thales to name a few.

The purpose, he says, is simple.

“It’s not so much the deals that get done at an event like this, it’s the introductions and the networking that takes place,” he says.

“It’s important that Australian companies in particular are introduced to the internationals, and this is a great opportunity to do that, without the expense of going overseas.”

Victoria’s Aviation Minister, Gordon Rich-Phillips, has been on stage spruiking the benefits of the airshow to the local economy including $150 million in 2011 and $20 million for Geelong.

He has also announced that the show’s tenure has been expended. It will now continue, every other year, until 2025.

But it has hardly been a positive few years for Australian manufacturing. If the defence industry is driving this show, how secure is its future?

“There’s an old saying,” Ian Honnery begins, when asked that question. “When times are good, you should promote yourself. When times are bad, you have to promote yourself.”

He delivers his final line with a polished pause that suggests he has reeled it off a few times before. “We take Australia to the world by bringing the world to Australia,” he smiles.

Next week at the airshow, there will be acrobats walking on the wings of flying planes, stunt pilots, fireworks and 300-plus planes on display.

All set then, to attract the expected 195,000 visitors. But by the time they arrive, the show’s real purpose will be largely complete.

Topics: air-transport, air-force, event, vic, geelong-3220

JB Hi-Fi keeps faith in store expansion plan

Electronics retailer JB Hi-Fi has posted a modest rise in profit, due to the continued expansion of its store network.

The company reported a 3.1 per cent rise in net profit after tax to $82.1 million for the second half of last calendar year, on the back of a 2.3 per cent rise in total sales for the group to $1.82 billion.

Sales at JB Hi-Fi branded store sales were up 3.1 per cent on the same period a year earlier, but sales at stores open for the whole of both periods were down 3.5 per cent, indicating that it was the opening of new stores that drove growth.

JB Hi-Fi says it managed to increase its gross margin slightly to 21.5 per cent, but its cost of doing business also rose, leaving its net profit margin unchanged at 6.8 per cent.

JB Hi-Fi’s chief executive Terry Smart says the company is recording solid growth in many segments, but being held back by a slowdown in demand for TVs.

“Whilst we continue to see total sales growth, the visual (TV) category in particular negatively impacted comparative store growth,” he noted in the report.

“The industry has seen TV sales decline over the past few years as the category moves towards a more typical replacement driven sales market. The JB brand however continued to attract customers with our market share growing solidly.”

JB Hi-Fi says online sales have been growing by around 40 per cent, but still only make up around 2 per cent of the company’s total sales.

The retailer is planning to continue its store roll-out, with another 15 store openings planned for this year.

Morningstar senior analyst Tim Montague-Jones says JB Hi-Fi shares have been undervalued before today because of concerns based on buying activity in the United States.

“Consumers basically go to these bricks and mortar type stores to work out what they want to purchase and then they go onto Amazon and buy online, so there was a fear that these bricks and mortar stores in Australia would suffer the same plight,” he explained.

Terry Smart is upbeat about how the company started the year.

“We have seen a positive start to the New Year with total sales growth in January of 11.7 per cent and comparative store sales growth of 4.2 per cent,” he said.

“January gross margin has improved on last year as we cycle the significant market-wide promotional period from last year.”

The company is expecting sales for the full financial year to be around $3.25 billion and net profit to be in a range between $108-112 million, despite comparable store sales shrinking by around 3 per cent.

The company has declared an interim dividend of 50 cents a share fully-franked, up from 49 cents in the same period last year.

JB Hi-Fi shares surged 12.6 per cent to $12.40 by 10:10am (AEDT) as investors greeted the better than expected result.

Topics: business-economics-and-finance, retail, electronics, company-news, australia

First posted February 11, 2013 10:14:30

Bank of England keeps interest rate at record low

bank-LONDON: The Bank of England voted on Thursday to freeze its key interest rate at a record-low 0.50 percent and maintain its quantitative easing cash stimulus as Britain stands on the brink of another recession.

“The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.50 percent,” it said, adding that QE would remain at £375 billion ($589 billion, 434 billion euros).

The central bank added in a longer-than-normal statement that overall economic activity had been “broadly flat” over the past year, despite worries that the British economy could be heading for the third recession in five years.

The QE stimulus programme has been used to try and help prop up Britains’ economy, which unexpectedly shrank by 0.3 percent in the final quarter of 2012. However, the economy flatlined over the entire year with zero growth.

“Over the past year, there has been considerable volatility in quarterly output growth,” the central bank said in the statement.

“Looking through the influence of temporary factors, overall output appears to have been broadly flat. In large part that reflects sharp falls in particular sectors of the economy that are unlikely to be repeated in 2013.

“In contrast, the combined output of the manufacturing and services sectors has grown modestly. Business surveys suggest the pace of expansion is likely to remain muted in the near term,” the BoE added.

The central bank that 12-month inflation would rise further in the near-term and could remain above its 2.0-percent target for the next two years. However, it was then forecast to return to to “around” the target level as price pressures fade.

Policymakers also mulled withdrawing QE stimulus, in order to pull inflation lower, but decided that it would risk endangering any recovery. QE can risk stoking inflation and is more commonly referred to as printing money.

“The Committee discussed the appropriate policy response to the combination of the weakness in the economy and the prospect of a further prolonged period of above-target inflation,” it said, adding it was necessary to look beyond the period of above-target inflation.

“Attempting to bring inflation back to target sooner by removing the current policy stimulus more quickly than currently anticipated by financial markets would risk derailing the recovery and undershooting the inflation target in the medium term.”

Thursday’s decisions were in line with expecations and came as incoming BoE governor Mark Carney called for the bank to ready plans for a smooth eventual withdrawal of QE stimulus to avoid major disruption on markets.

Canadian central bank chief Carney — who takes the helm from current BoE boss Mervyn King in July — set out his views on QE before a group of cross-party lawmakers on parliament’s Treasury Select Committee.

“The bank will need to design, implement and ultimately (manage an) exit from unconventional monetary policy measure in a manner that reinforces public confidence,” Carney said in written testimony to the committee.

“The exit needs to be achieved without disrupting the gilts (bonds) market,” he added ahead of the latest decision.

Quantitative easing (QE) involves creating cash to buy assets like government and corporate bonds, with the aim of boosting lending by retail banks and stimulating economic activity.

The BoE’s main lending rate has stood at the record-low 0.50 percent since March 2009, when it also embarked upon its radical stimulus policy.

Under QE, the Bank of England creates cash that is used to purchase assets such as government and corporate bonds with the aim of increasing lending by retail banks and boost economic activity.

Copyright AFP (Agence France-Presse), 2013

Stabilising global economy keeps rates on hold

The Reserve Bank has left official interest rates on hold at 3 per cent, amid stabilising global economic conditions.

The bank’s decision to stay on hold surprised few economists, with only four out of the 28 surveyed by Bloomberg expecting a rate cut this month.

Many economists are expecting further rate cuts this year, with a few forecasting as many as four reductions to take the official cash rate target as low as 2 per cent.

However, a recent former Reserve Bank board member, ANU economics professor Warwick McKibbin, told the ABC’s AM program he thinks the next rate move is more likely to be up than down.

Professor McKibbin cited stabilising international economic conditions and the possibility of asset price bubbles as factors that may force interest rates higher later this year.

The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand.

The Reserve Bank’s governor, Glenn Stevens, also noted the stabilising international economic environment in his post-meeting statement.

“Global growth is forecast to be a little below average for a time, but the downside risks appear to have abated, for the moment at least,” he observed.

“The United States has so far avoided a severe fiscal contraction and financial strains in Europe have lessened considerably over recent months. Growth in China has stabilised at a fairly robust pace.”

However, Mr Stevens hinted that the next rate move is still more likely to be down than up.

“The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand,” he said.

“At today’s meeting, taking into account the flow of recent information and noting that there had been a substantial easing of policy as a result of previous decisions, the board judged that it was prudent to leave the cash rate unchanged.”

That flow of data indicated that previous reductions in interest rates had been having some of the expected effects – rising demand for durable consumer goods, rising home prices and dwelling construction, and a shift away from bank deposits to higher-return assets such as shares.

However, the previous rate cuts have not dampened the exchange rate as much as the RBA would have expected given the fall in commodity prices, and both households and businesses are still reluctant to borrow.

RBC Capital Markets chief economist Su-Lin Ong says domestic factors such as employment, housing growth and capital spending will be closely watched by the RBA over the next few months in deciding whether to lower rates further.

“I think they’re very much in wait and watch mode really,” she said.

“I think the onus is on the domestic data to deteriorate to push them into cutting, so from that we know that they’re watching, we think, a couple of key areas.”

The decision to keep the official cash rate on hold should see the average standard variable mortgage rate remain around 6.45 per cent per annum, with discounted rates staying around 5.7 per cent.

The Australian dollar fell from 104.57 US cents before the bank’s decision was announced to 104.15 US cents soon after.

Topics: business-economics-and-finance, economic-trends, money-and-monetary-policy, australia

First posted February 05, 2013 14:30:00

Russia’s central bank keeps markets guessing on next rate move

MOSCOW: Russia’s central bank may change interest rates as early as next month, a senior central banker said on Wednesday, while keeping markets guessing over the direction of future rate moves.

Alexei Ulyukayev, the central bank’s First Deputy Chairman, explained why a central bank statement on Tuesday had dropped earlier language about current rates being “acceptable for the near future”.

“It’s a signal for market participants that we are leaving ourselves the possibility of taking any decision as early as the next meeting… to raise or lower rates depending on the situation,” Ulyukayev told reporters on the sidelines of the Gaidar Forum, an annual economic conference.

The Bank of Russia left monetary policy unchanged on Tuesday and sounded a relatively hawkish note on inflation, muddying the waters over the direction of its next interest rate move.

Speaking earlier at the conference, Ulyukayev said that an immediate easing in monetary policy was not appropriate. But he also said that inflation was firmly under control and set to fall to within the central bank’s target in the second quarter.

“Economic growth in Russia, which is at 3.5 percent, roughly corresponds to its potential,” Ulyukayev said.

“Therefore, monetary policy easing in the form of a cut in interest rates or introduction of additional instruments of quantitative easing would be counter-productive and would lead to the accumulation of new imbalances.”

Many economists have nevertheless argued that the central bank should cut interest rates in the coming months, as inflation has stabilised while economic growth is slowing.

Although Ulyukayev’s comments suggest that the central bank is in no rush to cut interest rates, they leave room to do so if economic growth were to slow further – thereby falling below its long-run potential – as many forecasters expect.

Analysts polled by Reuters at the end of last year forecast on average that growth in gross domestic product (GDP) would slow to 3.2 percent in 2013 from 3.6 percent in 2012, even if the central bank cuts interest rates as forecast.

Ulyukayev was also upbeat about the prospects for bringing down inflation – seen by most analysts as the key prerequisite for future cuts in interest rates.

He predicted that annual inflation – which reached 6.8 percent in early January – would fall to 5-6 percent from the second quarter, bringing it within the central bank’s target range.

“Inflation at 6.8 percent shouldn’t worry the central bank,” he said. “It is the result of a shock in food prices… (Price rises) don’t have a serious macroeconomic or monetary instance.”

Pressure to ease monetary policy this year may come from Russian President Vladimir Putin, who expressed concerns on Wednesday that economic growth is losing steam.

“The results for November (the most recent official data) cause a certain worry,” Putin said at a government meeting, adding that annual growth in gross domestic product is slowing according to government estimates.

Annual GDP growth declined from 4.4 percent in the first half of 2012 to just 1.9 percent in November, although the Economy Ministry expects December figures to show an improvement to 2.8 percent. 


As well as playing down concerns over inflation, Ulyukayev also sounded relaxed about so-called capital flight, saying that net private capital outflows below $10 billion per quarter represented an “acceptable” level for Russia.

“This figure is acceptable given the state of institutions in Russia and the size of the positive current account balance,” Ulyukayev said, observing that net outflows have been below $10 billion for each of the last three quarters.

Large-scale capital outflows from Russia have been a source of concern over recent years, suggesting that a poor business climate is deterring badly-needed investment.

The net outflow of private sector capital reached $56.8 billion in 2012, according to a central bank estimate published last week, a decline on an $80.5 billion outflow seen in 2011 and below earlier forecasts.

Copyright Reuters, 2013

Fitch keeps France’s AAA rating

French finance minister Pierre Moscovici Finance Minister Pierre Moscovici has previously brushed off the ratings agencies Fitch has maintained the French government’s top credit rating – the only major ratings agency left to say the country deserves to be AAA.

Rival agency Moody’s downgraded France in November while Standard & Poor’s cut its rating in January.

However, Fitch has kept its negative outlook, suggesting France could be downgraded soon.

The UK, Germany and Canada are the only major economies to currently have a AAA rating from all three agencies.

A cut to a credit rating means that a country is perceived as more risky to lend to, which means the cost of borrowing from international investors can rise.

When its rating was cut by Moody’s last month, French Finance Minister Pierre Moscovici downplayed the importance of the decision.

Continue reading the main story

Ordered by Moody’s rating; eurozone in bold

France had narrowly avoided falling into recession during the third quarter of 2012, registering 0.2% economic growth from the previous quarter.

Over the course of the past 12 months, however, the French economy has more or less stagnated.

France’s Socialist government is enacting reforms that buck the trend of austerity in Europe, such as President Francois Hollande’s decision to reinstate retirement at 60 for some workers.

It has also raised the wealth tax on citizens and increased the highest rate of income tax to 75%.

A recent edition of the Economist magazine dubbed France “the time bomb at the heart of Europe”, claiming it had an under-competitive economy and over-dependence on government spending.

On Thursday, Standard & Poor’s became the last of the three main rating agencies to put the UK’s AAA rating on “negative outlook”.

The UK, Germany and Canada are the only major economies to currently have AAA ratings from all three agencies.

Philippines keeps watch on China

  There are lots of Chinese business people in the Philippines In the heart of Manila’s busy Chinatown, business is booming.

Street trade goes on, as it has for centuries, but new malls and luxury apartment blocks are being created as more and more people arrive from China to trade and invest in the area.

In his office right in the heart of Chinatown, Tan Ching, the president of the Federation of Filipino-Chinese Chambers of Commerce, says this relationship can only grow – not just in Chinatown, but between the two countries as a whole.

“Trade between the Philippines and China is getting more and more. Maybe this year we’ll reach $30bn (£30bn),” he says.

He is not alone in his prediction of rapid bilateral growth.

The Philippines’ main trading partners are currently Japan and the United States, but Roberto de Ocampo, a former Philippine finance secretary, believes they are both likely to be overtaken by China within a decade.

This is partly because of the sheer size of China, and the fact that it is already moving away from being an export-oriented economy to a more consumer-oriented market which could mean huge opportunities for countries such as the Philippines.

“China is obviously a good market to tap for financial aid and for technology,” says Mr Ocampo. “They’re among the world’s leaders in infrastructure, like railways, which we sorely need in the Philippines.”

In return, he says, China needs the Philippines’ agricultural products and can also be a source of substantial numbers of tourists.

Closeness and mistrust

There is plenty of shared history to help this expansion.

The Chinese traded with the Philippines long before the American colonists and even the Spanish colonists arrived here – in fact, long before the Philippines was even called the Philippines.

“The Chinese influence has always been here. There are ties that bind,” says Mr Ocampo, who has some Chinese heritage himself.

But history can sometimes have its negative sides too.

In the past centuries there was always a slight mistrust, right back to Spanish colonial times when the Chinese communities were kept a cannon’s shot away from Manila’s old walled city.

Chinese charms on display Lots of culture, history and heritage binds the two nations together

Even now, though not openly discussed and perhaps has more to do with the wealth of some Chinese settlers than ethnicity, this mistrust is still there.

But by far the biggest thorn in the Philippines-China relationship – and one which is very openly discussed – is the territorial dispute over the South China Sea.

China claims the vast majority of the sea, despite overlapping claims from five other countries, one of which is the Philippines.

There are concerns that a more economically powerful China could start bullying smaller countries such as the Philippines into giving up their territorial claims.

“Unfortunately there is a perceptible drive towards military hegemony on the part of China,” says Walden Bello – a congressman who’s taken an active stand against Beijing on this issue.

In April, a Philippine flagship was engaged in a standoff with two Chinese vessels in the disputed Scarborough Shoal, and the row led to a war of words between the two nations, as well as anti-China protests in Manila.

It also affected trade. Beijing blocked a series of shipments of Philippine fruit, and encouraged its citizens not to visit the country.

According to Mr Bello, the situation has also “created the kind of tensions in the region that invite in outside powers like the United States.”

The Philippines has indeed found solace in a mutual defence pact with the US, and discussed the issue at the highest levels in Washington.

And while the US has repeatedly argued for a collaborative diplomatic solution, China has been angered by any notion of any American involvement at all.

Neither is it happy about the number of joint Philippine-US military exercises being held in Philippine territory – nor the plans by the US to expand its military presence in the region.

Regional bonding

So the Philippines finds itself in the situation of looking increasingly to China for trade yet to the US as a military ally.

That might sound a difficult compromise to maintain, but Mr Ocampo believes there isn’t huge cause for concern and that the row with China will, in all likelihood, resolve itself peacefully.

After the Scarborough Shoal standoff in April, “the politicians on either side had to make certain moves to play to their domestic audiences”, he says.

“But after a relatively short period, you’re now moving to another way of settling this by speaking diplomatically.”

In fact, he even sees a positive side to China’s increasing dominance over its regional neighbours.

Other Asian markets have realized they “somehow have to come together in closer co-operation”, he explains.

“That is why you have quite a bit of emphasis on Association of South-east Asian Nations.”

Whatever happens, though, there’s little doubt that China’s rise will have a big effect on this country – not just on its relationship with Beijing, but also its dealings with Washington and its other Asian neighbours.

No wonder then, that the changing line-up of leaders in Beijing will be monitored carefully here in the Philippines.

Uranium price keeps Angela Pamela plans on hold

Posted October 16, 2012 12:38:38

The company responsible for the proposed Angela Pamela uranium mine in Central Australia says it still sees the site as one of its key projects.

The uranium deposit 20 kilometres from Alice Springs has been earmarked for a mine but no work has been done there for two years.

Earlier this year, the Northern Territory government extended mining company Paladin’s exploration licence.

Paladin chief executive John Borshoff says the the lack of activity at the site does not mean the company has abandoned its plans.

“We regard Alice Springs as a key project for … the future,” he said.

Mr Borhoff says progress on the project has slowed because of the low price of uranium.

“The uranium price is still depressed, although we are confident about what will happen in the future now the Fukushima issue is fully behind everybody and nuclear (power) is in clear air,” he said.

Meanwhile, output from the Ranger uranium mine at Jabiru almost doubled during the September quarter.

Energy Resources of Australia (ERA) says production of uranium oxide was up by 96 per cent.

Topics: uranium-mining, regional-development, alice-springs-0870

Anxiety rises as Iran rial keeps falling relentlessly

Tehran: For months, since the imposition of harsh, US-led sanctions over Iran’s nuclear programme, the country’s leaders have sworn they would never succumb to Western pressures, and they scoffed at the idea that the measures were having any serious impact.

But after a week in which the Iranian currency, the rial, fell by a shocking 40 per cent and protests began to rumble through the capital, no one is making light of the mounting costs of confrontation.

In the Iranian capital, all anyone can talk about is the rial, and how lives have been turned upside down in one terrible week. Every elevator ride, office visit or quick run to the supermarket brings new gossip about the currency’s drop and a swirl of speculation about who is to blame.

“Better buy now,” one rice seller advised Abbas Sharabi, a retired factory guard, who had decided to buy 450kg of Iran’s most basic staple in order to feed his extended family for a year. “As I was gathering my money, the man received a phone call,” said Sharabi, smoking cigarette after cigarette on Thursday while waiting for a bus.

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“When he hung up he told me prices had just gone up by 10 per cent. Of course I paid. God knows how much it will cost tomorrow.”

Low value

Related Links Grand Bazaar reopens after currency protests Iran’s currency alley sees rush to dump Iran imposes currency cap

While only a few people actually need to exchange the rial for foreign currency, its value is one of the few clear indicators of the state of the economy, and its fall has sharply raised the prices of most staples.

In Tehran, many residents spend their days calling on money changers and visiting banks, deliberating whether to sell their rials now or wait for a miracle that would restore the rates to old levels, or for even a modest rally from the panic-driven lows of the last week.

“The fluctuations are so large that nobody knows whether it is better to wait or to change now,” said Ahmad, 65, as he shared a taxi to the west Tehran neighbourhood of Sadeghiyeh.

“I am so fed up,” said Ahmad, a garment seller, who like others here did not want to be identified by his full name for fear of retribution from the authorities. “I want to have a normal life, but from breakfast, to lunch to dinner, everybody only nervously talks of hard currency.”

Like many residents of the capital, Ahmad had tuned in to President Mahmoud Ahmadinejad’s  news conference on Tuesday, hoping that he would offer some sort of solution.

Instead, Ahmadinejad attributed most of the rial’s weakness to currency speculators and the sanctions, saying that it is only natural that the currency should suffer when it is possible to sell oil only in small quantities and when it is hard to make international bank transfers. His opponents say he is trying to avoid blame for his own mismanagement of the economy. He even went so far as to threaten to quit.

“He has made a mess, and now he wants to leave us,” Ahmad said of the president. But a passenger in the taxi named Mustafa interrupted. “No,” he said, “most of our leaders are at fault, but they are trying to blame everything on Ahmadinejad.”

Just a day later, on Wednesday, clashes erupted when riot police officers on motorcycles dispersed sidewalk money changers near Tehran’s main bazaar. The government has accused them of deliberately manufacturing the currency crisis.
While life seemingly returned to normal on Thursday, the outburst of public anger exposed the deep feeling of hopelessness that has taken hold among many Iranians.


Experts are divided about whether the crisis has been caused more by Tehran’s longtime mismanagement of the country’s economy or by the US-led sanctions, which have been imposed over Iran’s refusal to halt a nuclear programme that the West suspects is a cover for developing weapons. Whatever the cause, members of the once-vibrant middle class have turned into cynics, many of whom say they might be alive, but are not living.

For Maysam, the son of a man who was killed in the Iran-Iraq war, a decade of relative prosperity and technological innovations had enabled him to travel widely and had turned him into a prominent blogger and critic of the system that his father had died defending.

Instead of hoping to die on a battlefield, he had planned to run his own Internet startup company. But those dreams have been shattered.

“We can’t even think of the future, of tomorrow, the day after, or the next week,” Maysam said.

Foreign trips are out of the question, as even the price of a cup of coffee in Istanbul — favourite destination for Iranians — has tripled when calculated in rials.

Parents of the legions of Iranians studying abroad are calling their children back to Iran, as rents and college fees in countries like the Philippines and Malaysia have become unaffordable.

“I have told my son to come home,” said Shabaz, 60, who owns a printing house. “We are all losing. His future is gone; I won’t ever witness his graduation; and he won’t find a job.”

At Tehran’s currency market, traders quietly started buying and selling again after the raid on Wednesday, though few people were willing to part with dollars. While government officials announced that the rial would strengthen as soon as they had their own foreign currency exchange centre up and running, many traders were sceptical. “It all comes down to this,” said a trader named Akbar.

“As long as sanctions continue, the rial will continue to lose value.”

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KSE keeps breaking its own records

KARACHI: Karachi Stock Exchange (KSE) carried over its previous few days’ positive note, as on Friday during trading KSE-100 index was seen surged to the highest ever at 15,844 points.

The financial experts’ anticipation about Central Bank likely to lower the discount rate further by one percent in the monetary policy to be announced today had sparked a sense of optimism among the investors in the market who continued making purchases even today that sent the KSE-100 index rocketing to the highest ever at 15,844 points.

KSE keeps breaking its own records

KARACHI: Karachi Stock Exchange (KSE) carried over its previous few days’ positive note, as on Friday during trading KSE-100 index was seen surged to the highest ever at 15,844 points.

The financial experts’ anticipation about Central Bank likely to lower the discount rate further by one percent in the monetary policy to be announced today had sparked a sense of optimism among the investors in the market who continued making purchases even today that sent the KSE-100 index rocketing to the highest ever at 15,844 points.

Market watch: Despite official disapproval, ICH keeps interest

Benchm­ark KSE-100 index gains 37 points.  Benchmark KSE-100 index gains 37 points.

KARACHI: Optimism sustained in the market on Monday over the implementation of the International Clearing House (ICH) gateway, which will handle all international calls for the country.

Positivity over this development continued despite the Competition Commission of Pakistan’s warning against the execution of the proposal, and a policy directive issued by the Ministry of IT against the formation of the ICH.

“A mixed trend was witnessed at the local bourse: continued buying interest was witnessed in the telecom sector, while profit taking was witnessed in exploration and production, and cement stocks,” reported Samar Iqbal, equity dealer at Topline Securities.

She noted that volumes continued to be dominated by telecom scrips, while the index continued its climb towards historic highs to close well above the 15,400 points level.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 0.24% or 36.91 points to end at the 15,428.49 points level. Trade volumes, however, dropped to 199 million shares compared with Friday’s tally of 240 million shares. The value of shares traded during the day was Rs5.80 billion.

“The KSE closed up 37 points, led once again by PTCL, over news that all Long Distance International operators have signed the ICH agreement, and the new rate is to be implemented from October 1, 2012,” explained JS Global analyst Jawad Khan.

Shares of 349 companies were traded on Monday. Pakistan Telecommunication Company was the volume leader with 21.19 million shares gaining Rs1.00 to finish at Rs19.04. It was followed by WorldCall Telecom with 13.74 million shares losing Rs0.24 to close at Rs3.05 and Telecard Limited with 11.51 million shares gaining Rs0.11 to close at Rs3.02.

Presenting an overview of Monday’s activity at the bourse, Khan added: “Banking stocks came into the limelight over unconfirmed reports of a cut in minimum deposit rates, helping MCB Bank and the National Bank of Pakistan gain 0.9% and 0.8% on close. Engro remained highly-sought over unconfirmed reports of positive developments on dedicated gas supply to its fertiliser business. Cement stocks witnessed profit-taking as Lucky Cement closed down 0.3%, while DG Khan Cement slipped 0.8%.”

Foreign institutional investors were buyers of Rs308.29 million and sellers of Rs345.96 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, September 4th, 2012.

Diamer Bhasha dam: Japanese aid keeps plans afloat

Tokyo agrees to financ­e power houses of the 4,500MW projec­t.  Tokyo agrees to finance power houses of the 4,500MW project. DESIGN: ESSA MALIK


Japan has agreed in principle to finance the power houses of the Diamer Bhasha dam, renewing hopes that the project will not be suspended. The dam has been designed to generate 4,500 megawatts of electricity, which Pakistan direly needs, besides storing water for agriculture purposes.

According to a senior government official, Japan has agreed to finance the construction of the power houses of the dam through the Japan International Cooperation Agency (JICA). He said the move, if it materialises, will create a win-win situation for both parties: it will provide much-needed funding for the project and an opportunity to JICA to sell its equipment.

However, the exact amount of the funding has not yet been worked out as modalities will be finalised later on, the official added. Meanwhile, the authorities have informed the premier about this development.

The project was originally meant to be completed by 2017, but suffered setbacks after its lead financer reportedly backtracked from commitments. It is currently facing delays of up to three to four years. Officials say Japan’s decision is good news for the country: the $11.2 billion project can still be kept alive, after the Asian Development Bank (ADB) recently reportedly refused to fund the dam.

The ADB had committed $4.5 billion to $5 billion for construction of the project. The bank had also pledged that it would act as the government’s investment banker in raising the money from international capital markets to meet funding requirements.

According to media reports, the ADB has now refused to provide financing for the dam. According to a senior government functionary, the ADB has reiterated an old stance: it will be difficult for the lending agency to arrange the entire funding on its own, and it needs collaboration from other international lending agencies as well. The ADB itself has not clarified the news reports

Officials say that talks with the ADB continue, to convince the lending agency not to withdraw its support even if there are problems in arranging funds from other international lending agencies.

In its efforts to keep the ADB on board, the government has increased the land acquisition compensation cost to more than twice the original. The ADB had suggested the government increase the cost – in order to appease the affected population and avoid future litigation. The cost of the land acquisition project was less than Rs48 billion originally, but has since soared to Rs116.6 billion, according to the Planning Commission.

The World Bank has already refused to provide funds for the initiative, fearing a backlash from India as New Delhi considers Gilgit-Baltistan a disputed territory. However, the United States has assured up to $500 million in assistance for the project; to be paid out of the $7.5 billion Kerry Lugar aid package.

Published in The Express Tribune, August 31st, 2012.