WORLD BUSINESS BRIEFING | ASIA

Pakistan: Protests at Exchange

By BLOOMBERG NEWS

The police surrounded Pakistan’s biggest stock exchange to thwart violence by investors demanding a trading halt as price curbs imposed after the biggest slump in a decade locked up their money. “There are no longer any small investors left in the stock market, they have all been destroyed,” said Kausar Qaimkhani, chairman of the Small Investors Association, leading a group of about 50 shareholders outside the Karachi Stock Exchange. “The market should be closed till funds are arranged.” Board members of the exchange are deciding whether to extend six-week-old rules that prevented stocks from falling below their Aug. 27 closing prices after rejecting calls from brokers to shut the market. The benchmark Karachi Stock Exchange 100 index rose 2.89, or 0.03 percent, to 9,184.24 at the 2:15 p.m. local time close.

Gulf stocks surge for second straight day

9 hours ago

KUWAIT CITY (AFP) — Stocks in the Arab world raced higher on Tuesday for a second straight day, bolstered by government action to shore up the banking sector and by a spectacular global market rally.

Several Middle East markets put on seven percent or more, with Dubai and Doha leading the way in the oil-rich Gulf with gains of some 10 percent.

The Saudi bourse, the largest in the Arab world, finished up 7.29 percent after rising 9.2 percent in early trading, a day after it rebounded 9.5 percent. It shed 23 percent last week.

The Saudi Tadawul All-Shares Index closed on 6,828.96 points after soaring close to the key 7,000-point mark. It is still down 38.1 percent on the year.

The TASI was supported by the petrochemicals and banking sectors which both rose 7.5 percent. Only three firms dropped while 122 increased.

The bourse in Dubai closed up 10.76 percent, its biggest single-day rise ever, at 3,703.34 points. It was bolstered by the market leader, property giant Emaar, which surged 15 percent for the second day in a row.

Dubai Financial Market Index has already recouped most of the losses it made last week when it shed 26.7 percent. Its whole property sector rose the maximum 15 percent permitted by the market on both of the past two days.

The other United Arab Emirates bourse, the Abu Dhabi Securities Exchange, rose 7.5 percent to 3,602.45 points. It too was boosted by property shares, which rose almost 10 percent.

Tuesday's surge came after the UAE said it had made another 19 billion dollars available to local banks, the latest measure to combat liquidity problems arising from the global financial crisis.

The move brings to 32.6 billion dollars the total amount being offered by the UAE monetary authorities to meet the needs of local banks.

The markets surge "is certainly the direct result of government intervention. This has greatly lifted investor confidence," said the head of the Saudi Al-Dakkak Economic Studies House, Ali al-Dakkak.

"Prices of stocks in most Gulf states also reached low levels that encouraged investors to buy," he told AFP.

The UAE is not the only Gulf government to announce measures to shore up the financial system in recent days.

Saudi Arabia, Kuwait and Bahrain have slashed interest rates, pledged tens of billions of dollars of liquidity to domestic banks and eased lending restrictions.

Bucking Tuesday's rebound, the second largest Arab bourse, the Kuwait Stock Exchange, closed down 0.26 percent at 11,795.70 points despite opening higher. It was apparently reacting to only modest nine-month results announced by some banks.

It was the only Gulf market to drop on Monday, when all other bourses in the region bounced back sharply after last week's dramatic falls.

In Egypt, the CASE-30 stock index closed the day up 6.3 percent at 6,138. The most heavily traded stock, Orascom Construction Industries, rose 8.88 percent.

The index had lost more than half its value in six months since hitting a high of 12,000 points in May.

The Doha Securities Market closed up almost 10 percent at 8,377.36 after the Qatar Investment Authority, the emirate's sovereign wealth fund, decided to buy between 10 percent and 20 percent of bank shares.

In Oman, the Muscat Securities Market finished up 8.4 percent at 7,717.43 points, while the Bahrain Stock Exchange closed up 1.4 percent.

In the past two days, the seven stock markets in the Gulf have increased their value by more than 100 billion dollars to around 870 billion dollars, after shedding around 200 billion dollars in the past week.

UPDATE 1-Toronto stock index surges out of gate

Tue Oct 14, 2008 10:32am EDT

* Investors cheer U.S. plan to plow $250 bln into banks

* Index races 1,600 points higher, biggest one-day gain

* Financials, oil and gas groups lead (Adds details)

TORONTO, Oct 14 (Reuters) - The Toronto Stock Exchange's main index made its biggest intraday gain ever at the start of trading on Tuesday as the market played catch-up with Monday's monster surge on Wall Street and welcomed a U.S. plan to inject $250 billion into its banks.

Canadian markets were closed on Monday for Thanksgiving Day.

Shortly after 9:45 a.m. (1345 GMT), the S&P/TSX composite index.GSPTSE was up 1,169.50 points, or 12.90 percent, at 10,234.66. All 10 sectors were higher. Right after the open the index was up a record-breaking 18 percent.

The big jump in the Toronto index came on the heels of big gains on world stock markets on Monday and continuing strength on Tuesday as investor jitters about the stability of the financial system eased.

The U.S. plan to plow $250 billion into its banks, following similar measures in Europe, is designed to get them lending to each other again. [ID:nTRS000084]

Financials led the Toronto rally, up 16.5 percent. Toronto-Dominion Bank (TD.TO: Quote, Profile, Research, Stock Buzz) jumped 18 percent to C$61.54, while Manulife Financial (MFC.TO: Quote, Profile, Research, Stock Buzz) soared 22 percent to C$32.52.

The U.S. plan broadly boosted sentiment in commodities as well, with the energy sector up 18 percent.

Imperial Oil (IMO.TO: Quote, Profile, Research, Stock Buzz) rose 28.5 percent to C$40.18, while Petro-Canada (PCA.TO: Quote, Profile, Research,Stock Buzz) gained about 25 percent to C$29.45.

($1=$1.15 Canadian) (Reporting by Ka Yan Ng; Editing by Peter Galloway)

Joyful day on Oslo stock exchange

The day has turned out to be one of the best in the history of the Oslo stock exchange, after the rescue deal and oil-price pulled it up.

Publisert 14.10.2008 15:17 - Oppdatert 14.10.2008 15:17

The beginning of a new week on the Oslo stock exchange was, with few exceptions positive. A G7-meeting about the rescue deal, along with a rise in the oil-price helped to lift stock markets throughout Europe.

Monday began with a solid rise in Asia, where the regional index, MSCI Asia Pacific rose by 4.2 per cent. The optimism began as finance ministers in the G7 countries guaranteed that they would take necessary steps to resolve the financial crisis.

Europe followed suit in grand tempo.

London’s FTSE rose by a solid 7.75 per cent. Germany’s DAX-index rose by as much as 10.79 per cent. The Paris CAC40-index leapt 9.02 per cent.

As an extra bonus, the price of oil rose on the Oslo stock market, and the main index didn’t stop before it reached 254.2 points. This was a rise today of 6.04 per cent.

Last week was one of the worst of all times for the Oslo stock market. The fall ended at 21.90 per cent, and since the New Year, Oslo stock market has more than halved.

Price of oil

The raw material market also got moving. The rescue deals that were made known on Sunday and Monday have caused investors to again put their money in raw materials. It is even so not enough to prevent the super-optimists from becoming negative.

Goldman Sachs predicts that the price of oil will lay at 70 dollars a barrel by the New Year. This is a clear devaluation on the original estimate of 115 dollars a barrel. When it comes to prices for 2009, they have also made drastic cuts. Next year, they envisage an average price of 86 dollars a barrel, which involves an estimated cut of a third.

When Oslo stock exchange closed, the November contracts for North Sea oil lay at 75.72 dollars a barrel, a clear rise following Friday’s bottom notation of 73.30 dollars a barrel.

StatoilHydro wrote by 3.99 per cent during Monday trade to 114.60 per share. The oil company, Questerre leaps as much28.35 per cent to 8.15 kroner.

Losers

Among those who were the exception to the day’s upswing were the seismic company, Petroleum Geo-Service and the finance concern, Storebrand.

The PGS stock performance fell 4.43 per cent to 44.20 kroner. This is following Goldman Sachs’s devaluation recommendation. The stock exchange has changed its opinion and recommends the sale of the share, whereas they have previously had a neutral attitude to the company.

Low volume

As in recent days, the volume was again low on the Oslo stock exchange, with a turnover of 7.02 billion kroner in total.

StatoilHydro had the greatest turnover and amounted to 23 per cent of the day’s trade volume when shares for a total of 1.67 billion kroner changed hands in the oil company.

FOREX-Euro, sterling jump as Europe govts rescue banks

FOREX-Euro, sterling jump as Europe govts rescue banks
Mon Oct 13, 2008 7:39am EDT
* Euro pushes up after European govts agree to rescue banks
* Sterling also rallies as UK govt details bank bailout plan
* Stocks surge, panic selling arrested
* UK's Brown calls for remake of Bretton Woods pact
(Changes byline, releads, adds comment, updates throughout)
By Veronica Brown
LONDON, Oct 13 (Reuters) - The euro shot up on Monday, pulling away from a 1-1/2-year low against the dollar as a pledge by European governments to rescue banks from collapse plugged a deluge of selling in the single European currency.
Sterling also gained traction after the British government said three of the nation's biggest banks would take $64 billion in official funds to boost their capital [nLD69629].
According to a draft bill seen by Reuters on Monday, a rescue package for Germany's financial sector includes a fund to provide up 400 billion euros in guarantees for banks. Details of the plan were due at 1300 GMT [nLD220275].
The French government would create a $55 billion fund to take stakes in its banks, media reports said, as markets awaited the release of details for other European governments' respective bailout plans.
European shares were boosted, climbing more than 6 percent in early trade and maintaining most of the gain through the morning.
"The biggest change from today relative to last week is the fact that euro zone officials seem to have come up with a template plan from which national governments can pick and choose and implement where they see necessary," said Derek Halpenny, European Head of Global Currency Research at BTM-UFJ in London.
"We're certainly getting a greater shift towards the template used by the British government, which seems at the moment to be the best plan in town and the one investors are warming most to," he added.
In exchange for the UK government's fund injections, Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), HBOS (HBOS.L: Quote,Profile, Research, Stock Buzz), and Lloyds TSB (LLOY.L: Quote, Profile,Research, Stock Buzz) would be required to lend to homeowners and small businesses at rates seen in 2007.
In addition, institutions would also have to limit executive pay and accept government input on new board appointments [nLD167263].
British Prime Minister Gordon Brown called for world leaders to come together to remake the Bretton Woods agreement to tackle a 21st century globalised financial system.
The Bretton Woods conference in 1944 helped draw up the post-war financial order and established the International Monetary Fund (IMF) and the World Bank.
The euro spiked as high as $1.3671 , according to Reuters data. Bourses in Tokyo and New York bond markets were closed for respective national holidays.
By 1122 GMT, the single currency had pared early gains but was still up 1.3 percent on the day at $1.3577, having hit a low as $1.3257 on Friday, its weakest since March 2007.
The euro also climbed against the yen, and was last up 1.1 percent at 136.53 yen and recovering from a tumble last week that took it to levels last seen in mid-2005.
Sterling jumped as high as $1.7278, pulling away from a five-year low around $1.68 hit on Friday.
The yen was sold broadly as investors cut long positions built up in the Japanese currency as part of trades to reverse carry trades that had used cheap, low-yielding yen funds to buy higher-yielding currencies.
Despite the dollar's losses against the euro, the U.S. currency recovered from early losses against the yen to trade at 100.49 yen, off a session low of 99.58 according to Reuters data.
JITTERS REMAIN
European shares were last trading 5-1/2 percent higher, with sentiment bolstered by the bank rescue packages after a drop of more than 20 percent last week.
Leaders from Group of Seven industrialised nations at the weekend set out a plan of action to deal with the ongoing meltdown in the banking sector.
The United States said it would take stakes in banks in a first such move since the Great Depression, and Australia said it would guarantee deposits in its banks. [ID:nCRISIS]
While the flurry of initiatives to contain the worst financial crisis since the 1930s may have stemmed waves of selling for now, analysts were uncertain whether the improving mood would last very long.
"With risk perception hitting yet another record high last week...it may take longer until investors' confidence is restored to its pre-crisis levels," Dresdner Kleinwort strategists said in a note to clients.
"New triggers of risk aversion like real sector defaults should abound as global economy heads into a recession going forward. Markets thus should remain jittery in the coming months," they added. (Reporting by Veronica Brown; Editing by Chris Pizzey)

RPT-FOREX-Yen falls, Aussie surges as bank rescues take shape

RPT-FOREX-Yen falls, Aussie surges as bank rescues take shape
Sun Oct 12, 2008 9:10pm EDT
(Repeats to additional subscribers)
By Eric Burroughs
TOKYO, Oct 13 (Reuters) - The yen slid against higher-yielding currencies on Monday while the Australian dollar surged as leaders from Europe to the United States rushed out plans to shore up banks and stem the panic gripping investors.
After stock markets around the world suffered their worst ever weekly losses last week, leaders from Group of Seven rich nations set out a plan of action to stem the crisis and European leaders agreed to inject public funds into the banking system if necessary. [ID:nLC713950]
The United States said it would take stakes in banks in a first such move since the Great Depression, while Britain was set to pump more than 40 billion pounds into its four biggest banks. [ID:nCRISIS] The flurry of initiatives to stem the worst financial crisis since the 1930s increased investor appetite for risk, though analysts were uncertain whether the improving mood would last very long.
"What is clear is that global policymakers are not going to stand idly by as the global financial system implodes," said Sue Trinh, senior currency strategist at RBC Capital Markets, in a note to clients.
In Asia, Australian and South Korean equities jumped 3-6 percent and U.S. stock futures SPc1 also rose, pointing to a sharp rally.
Reviving the lending between banks, the lifeblood of the global financial system, was at the heart of the rescue plans after the default of Lehman Brothers caused many financial institutions to stop dealing with each other.
Trading activity was subdued due to a national holiday in Japan and with U.S. bond markets closed for the Columbus Day holiday. U.S. stock markets will be open, however.
Weeks of severe market volatility have also made investors and hedge funds shy away from trading, making day-to-day moves even more extreme than usual.
The dollar slipped, giving up some of its gains scored in the past few weeks as U.S. investors repatriated funds and as banks around the world scrambled to acquire the dollar funding they needed on the open market.
The euro rose 1.2 percent from late U.S. trade to $1.3573 , recovering from a 1-½ year low of $1.3258 struck on Friday.
The single currency jumped 1.4 percent to 136.92 yen , up from a three-year low of 132.15 hit on Friday as well.
The dollar was little changed at 100.70 yen with most of the big moves concentrated in currencies that have suffered the most during the broad market sell-off of the past few weeks.
The Australian dollar gained 5.4 percent to $0.6774 after hitting a 5-½ year low of $0.6330 on Friday and plunging about 20 percent in the past two weeks.
Against the yen, the Aussie was up 5.4 percent to 68.20 yen after having collapsed more than 22 percent in the past two weeks to a six-year low near 63 yen. (Editing by Tomasz Janowski)

FOREX: Ringgit Ends Higher Against U.S. Dollar

FOREX: Ringgit Ends Higher Against U.S. Dollar


KUALA LUMPUR, Oct 13 (Bernama) -- The ringgit ended higher against the US dollar Monday in line with gains by other Asian currencies, dealers said.At 5pm, the ringgit traded higher at 3.4930/4970 compared with last Friday's closing of 3.5115/5145.Dealers said Asian currencies were buoyed by the rising stock market after an announcement by the Group of Seven (G7), that it would inject public funds into the banking system if necessary, to tackle the global financial crisis."The market reacted positively to the G7 announcement to contain the financial crisis.This spurred buying interest in the local market," a dealer said.In late trading today, the local currency traded mixed against other major currencies.It depreciated against the Singapore dollar at 2.3783/3837 from 2.3744/3785 last Friday while being firmer against the Japanese yen at 3.4704/4774 from 3.5391/5428 previously.The ringgit was stronger against the euro at 4.7616/7698 from 4.7809/7860 last Friday while it was lower against the British pound at 5.9947/6.0050 from 5.9481/9550 previously.