profit.com.pk Sunday, 20 May, 2012

DEMANDS LEFT, RIGHT AND CENTRE

Historic Facebook debut falls flat Page 02

NEW YORKREUTERS

OIl futures fell on thedrumbeat from global stockmarkets, which erased theyear’s gains as investorspared holdings for safe-

haven assets such as gold, on growing con-cerns about the euro zone debt crisis. OnWall Street, equities dipped after a messyopening-day trade for social networkingdarling Facebook (FB.O) failed to lift thespirits of investors. .N

U.S. gasoline futures bucked the day’strend in energy markets, gaining slightlyafter six days of losses and climbing aboveits 200-day moving average after fallingbelow that level on Thursday for the firsttime since February. Oil investors werecautious ahead of the G8 summit thisweekend where U.S. President BarackObama was reported by Japanese newsagency Kyodo to be seeking support fortapping the release of emergency oil re-serves ahead of the European Union’sJuly embargo of Iranian crude.

Obama will host the G8 meeting atCamp David in Maryland.

Reversal of the Seaway pipeline wascompleted earlier this week and its firstcrude oil headed for Houston from Cush-ing, Oklahoma, is expected to flow by theweekend, according to owners EnterpriseProducts (EPD.N) and Enbridge Inc(ENB.TO). Anticipation of the landmarkmove, which was expected to help easethe glut in Midwest crude stockpiles, hadreduced Brent’s spread against U.S. crudein recent days, but on Friday, the spreadwidened, amid caution from analysts thatimpact of the reversal could be slow to hitthe U.S. oil markets.FUNDAMENTALS: On the New YorkMercantile Exchange, crude for June de-livery, which expires on Tuesday, settledat $91.48 a barrel, falling $1.08, or 1.17percent. For the week, it slid $4.65, or4.84 percent, down for the a third in arow. In three weeks, front-month U.S.crude has slumped $13.45, or 12.82 per-cent, the biggest three-week loss since theweek to August 14, 2011, when pricesdropped 14.54 percent.

In london, ICE July Brent crude set-tled at $107.14 a barrel, edging down 35cents, or 0.33 percent, the lowest close forfront-month Brent since the December

20, 2011 settlement at $106.73 and ex-tending losses to a third straight week.

In three weeks, front-month Brenthas fallen $12.69, or 10.59 percent, itsbiggest three-week drop since the week toMay 20, 2011, when prices ended 10.72percent lower. July Brent’s premiumagainst U.S. July crude widened to$15.34, from $14.55 on Thursday, asBrent fell far less than U.S. crude.

NYMEX June heating oil fell 1.90cents, or 0.67 percent, to settle at $2.83 agallon, dropping for the third consecutiveday. For the week, the contract fell 13.36cents, or 4.51 percent, stretching weekly

losses a third week.In three weeks, front-month heating

oil dropped 35.07 cents, or 11.03 percent,the biggest three-week loss since the weekto May 8, 2011, when prices fell 11.94 per-cent.

NYMEX June RBOB gasoline settledat $2.8895 a gallon, up 1.13 cents, or 0.39percent, snapping a six-day losing streak.However, for the week, the contract fell11.13 cents, or 3.71 percent, biggest sincethe loss of 7.19 percent in the week to May4. The loss followed a small gain of 0.84percent in the week to May 11.

Hedge funds and big speculators cut

their bullish bets on U.S. crude oil and op-tions by 12,789 contracts, to 140,936, inthe week to May 15, hitting the lowestlevel since late 2010, according to aweekly report from the U.S. CommodityFutures Trading Commission.

The number of oil drilling rigs in theUnited States rose 10 to 1,382 last week,the highest level in 25 years, according toa weekly report from oil services firmBaker Hughes. U.S. petroleum consump-tion fell 0.3 percent in April from a yearago, to 18.549 million barrels per day andgasoline usage climbed for the thirdmonth in a row, the American PetroleumInstitute said. Iraq’s oil exports from issouthern ports have slipped by 170,000bpd so far this month, according to ship-ping data tracked by Reuters, althoughIraq hopes remain it will sustain ship-ments at April’s record rate.MARKETS NEWS: Gold rose morethan 1 percent, on track for its largest two-day gain since October as investors con-solidated their positions ahead of theweekend and amid a stronger euro.

U.S. stocks fell after a sloppy debut byFacebook Inc (FB.O) failed to brighten themood on Wall Street. .N

The euro rallied from a four-monthlow against the dollar as investors paredbets against the single currency after amore than 3 percent drop this month, butconcerns about the euro zone were likelyto keep it under pressure.

Copper fell for a third straight week,having lost 4.5 percent of its value overthe past five days, on fears Europe’s spi-raling debt crisis and China’s slowdownwill erode demand for metals.

Burning the midnight oil…g Crude down, hits biggest 3-wk loss since Aug ‘11

OIL OOPS

ISLAMABADONLINE

VICE President SAARC Chamber ofCommerce and Industry IftikharAli Malik on Saturday said govern-ment should introduce a budgetthat can trigger economic activity

in the country.There is a break in growth since few

years while the economy continues tonosedive with which is a matter ofgreat concern for the business com-munity, he said.

Speaking to business commu-nity at FPCCI Capital Office,Iftikhar Ali Malik said that for-eign funds and investmentshave dried up which call for fo-cused efforts to mobilise do-mestic resources.

Secretary General SAARCCCI Iqbal Tabish, ChairmanMedia Malik Sohail and oth-ers were also present on theoccasion.

Malik proposed a powerfuleconomic revival council com-prising former finance ministers,governors of SBP, chairmen FBR,judges, business leaders, and tech-nocrats which can guide government oneconomic matters.

Politicians have failed to deliver thereforeexperts should be allowed to steer country awayfrom the economic mess, he said adding that In-donesian model can be followed after slightchanges.

The veteran business leader said that highinterest rates and inflation are the natural out-come of this heavy borrowing which must be

curtailed.Banks are ignoring productive sectors to fi-

nance government expenditure which continuesto compromise developmental expenditure for

non-developmental spending, he observed.Iftikhar Ali Malik said that tendency of print-

ing money is killing all efforts to stimulategrowth while critical infrastructure continues todeteriorate.

Inability of government to address energycrisis is playing havoc with all sectors, especiallyindustries and exporters, he observed.

He said that energy crisis is result of mis-management as defaulters continue to enjoy

electric supply.Priority should be given to educa-

tion, health, and water supply, unpro-ductive expenditure should be

reduced and printing currencyshould be stopped to guarantee

gradual improvement, he said.He said that business com-

munity is looking forward for abalanced budget which canturn around economic situa-tion.

At the occasion, Malik So-hail said that authoritiesshould ensure that overall

deficit does not exceed 5 percent of the GDP.

The PSDP should be two percent of the GDP which should not

be axed due to political considera-tions.

Government should aim to redistrib-ute the benefits towards poor and all general

subsidies should be immediately replaced withtargeted subsidies, said Sohail.

Budget proposals should not be a useless rit-ual; they said adding that Pakistan cannot affordto waste more time.

Malik Sohail said that influential sectorsshould be taxed in the budget while small tradersshould be spared.

ICCI wants focus on DirectTax in forthcoming budget

ISLAMABADNNI

Government should maintain an appropriate balance be-tween direct and indirect taxes as ever-increasing burden ofindirect taxes have adversely affected common man andbusinesses as well. Yassar Sakhi Butt, President IslamabadChamber of Commerce & Industry (ICCI) has stated this ina statement. He said that the government must increase itsdependence on direct taxes and move away from indirecttaxes because any further increase in indirect taxes wouldnot only be inequitable but it may also have negative conse-quences for the overall economy. He said that indirect taxescurrently account for more than 60 percent of the total rev-enues while direct taxes to GDP ratio was merely 2 percentwhich has been badly affecting consumer spending that is akey driver of economic growth.Therefore, Government should not levy more indirect taxesin upcoming budget of 2012-13 on consumers and othersectors of the economy and ensure an equitable and trans-parent taxation system, he maintained. President ICCI underlined the need for revamping the taxa-tion system of the country on the modern and progressivelines, which is essential for controlling inflation on a sus-tained basis.He said that Government should also abolish a number ofindirect taxes which were being charged from the value-added industries for enabling them to compete in the inter-national market as levying of various indirect taxes on theseindustrial units were causing serious threat by increasingcost of production of export-oriented industries.Yassar Sakhi Butt stressed upon the Government to bringdown the rate of turnover tax in the upcoming federalbudget and take innovative steps to bring sectors of theeconomy into the tax-net which were currently not beingtaxed and rendering a permanent revenue shortfall in theNational Exchanger.ICCI President said that proactive measures should be in-troduced to plug the leakages and loopholes in the prevail-ing tax system rather than adopting the policy of increasingthe tax base through broadening the ratio of indirect taxes.

Budget brawl boils over SAARC chambers demand balanced budget

PRO 20-05-2012_Layout 1 5/20/2012 4:00 AM Page 1

news02Sunday, 20 May, 2012

SAN FRANCISCOREUTERS

THE historic initial public of-fering of Facebook Inc didnot go as planned on Friday,as the social networking com-pany’s sky-high valuation

combined with trading glitches left thestock languishing near its offering priceat the market close.

Facebook shares began trading lateFriday morning and opened 11 percentabove the $38 offering price, but afterpeaking at about $45 slid rapidly at theend of the day to close at $38.23. The IPOwas the third-largest in U.S. history andvalued eight-year-old Facebook at $104billion.

The surprisingly weak debut of astock that analysts had predicted wouldclimb between 10 and 50 percent is notlikely to dent the business prospects ofFacebook, which boasts 900 million usersand is upending business practices andsocial relationships around the world.

But the unexpected developmentswere a clear setback for Morgan Stanley,the lead underwriter on the deal, whichsources said was forced to defend the $38price level by buying shares on the openmarket. Many market participants saidthey expected the stock to remain underpressure next week.

The offering also proved an embar-rassment for the NASDAQ: the openingwas delayed as the exchange struggledwith a huge volume of orders, and formuch of the day there were long delays inorder confirmation. The SEC said lateFriday that it was reviewing the situation.

Social media companies and Internetcompanies that had hoped to benefitfrom a Facebook halo effect were insteaddragged down Friday, with social gaminggiant Zynga dropping almost 15 percent.

Analysts said Facebook may simplyhave over-reached in raising the IPOprice range, pricing at the top of therange and increasing the size of the offer-ing earlier in the week.

“The underwriters got greedy on be-half of selling shareholders and bumpedthe price high enough that they didn’t getmuch of a bump on the first day,” said BillSmead, chief investment officer at SmeadCapital Management, which did not buyFacebook shares in the IPO. “They in-creased the size of the deal and that reallydid a number on it.”

Skeptics have argued all along that avaluation of more than $100 billion —about equivalent to Amazon.com Inc andexceeding that of Hewlett-Packard Coand Dell Inc combined — was far too highfor a company that posted $1 billion in

profit and $3.7 billion in revenue in 2011.Concerns about Facebook’s earnings

potential were highlighted by GeneralMotors’ announcement this week that itwould no longer buy paid advertising onFacebook.

“You don’t need more than a smallpencil and napkin to do a valuation onthis, to say there are heroic assumptionsin earnings growth to keep this at $100billion, much less $115 billion or $120 bil-lion,” said Dave Rolfe, fund manager atRiver Park Wedgewood Fund, which doesnot own shares in Facebook.

“I know there’s a lot of excitementand exuberance, but it seemed today thatthe market is starting to do some hardvaluation math early on.”

Facebook’s opening day on WallStreet does not bode well for the stock’sperformance in the days ahead, saidChanning Smith, portfolio manager atCapital Advisors Growth, which does notown shares in Facebook. “If you’re an in-vestment banker or if you’re long thestock, I would definitely be a bit worriedas we walk away to the weekend,” he said.

The weak IPO may also give pause toprivate investors in Silicon Valley whohave been pouring money into next-gen-eration Internet companies at very highvaluations in the hope of eventually tak-ing them public.MEDIA CIRCUS: At Facebook’s head-quarters in Silicon Valley, the day beganwith company founder and Chief Execu-tive Mark Zuckerberg, 28, symbolicallyringing the opening bell for stock trading

on Friday morning. Wearing his trade-mark black hoodie, Zuckerberg, whoseshares are worth nearly $20 billion andwho retains voting control over the com-pany, hugged and high-fived SherylSandberg, Facebook’s chief operating of-ficer, who is credited with bringing cru-cial business discipline to a companyfounded in a Harvard dorm room.

The area outside Facebook’s officeswas packed with photographers, morethan a dozen television trucks, and a TVnews helicopter hovering overhead.

Outside Nasdaq headquarters in NewYork, crowds also gathered, even as ex-change officials struggled to sort out trad-ing problems that left investors guessingwhether their buy and sell orders had ac-

tually been executed.The IPO minted thousands of new

paper millionaires among Facebook’s3,500 employees — and a handful of bil-lionaires among its founders and early in-vestors. More than half of the proceeds ofthe IPO will go to existing shareholders,including early backers such as AccelPartners and Russia’s DST Global.

In the run-up to the IPO, demandfrom institutional investors was strong,and many analysts had expected an influxof retail investors keen on owning a sliceof a cultural phenomenon regardless ofprice. But that did not materialize.

“Flippers who waited all day for a popthat did not come decided to throw in thetowel and get out,” said Mohannad Aama,managing director at Beam Capital Man-agement llC in New York.

“That group also includes people whoover-extended themselves in gettingmore shares than they can afford to hold— whether they got it from the syndicateor from the open market once it openedaround noon.” Still, from Facebook’s per-spective, the stock performance could beseen as reflecting smart pricing: Zucker-berg and early investors pocketed maxi-mum gains and left little of the easymoney on the table.

“You want to price the offering cor-rectly. Institutional buyers get a littlebump and the company raises the rightamount of money,” said Kevin Hartz, co-founder and CEO of Eventbrite, an onlineticketing startup that is integrated withFacebook’s platform. “If the stock has a

massive bump on day one, that meansyou misread market demand and thecompany could have raised more moneywith the same amount of dilution, orcould have raised the same amount ofmoney with less dilution.”BATTlE OF THE GIANTS: Facebookfaces many challenges as it takes its placebeside Google, Apple and Amazon as oneof the giant public companies definingthe next-generation Internet economy.Google in particular views Facebook as amortal threat and is moving aggressivelyto integrate social networking featuresacross its products.

At the same time, scores of youngcompanies are building new products andservices, in some cases on top of the Face-book platform and in some cases in com-petition with it, and attracting huge

amounts of investment capital.A handful of such so-called Web 2.0

companies, including Zynga Inc,linkedIn Corp, Yelp Inc and GrouponInc, have already gone public, and othershave been acquired by the industry gi-ants. All of those stocks fell on Friday insympathy with Facebook’s weaker-than-expected debut.

In an indication of the land grab nowunder way in the Internet world, Face-book in April spent $1 billion to acquireInstagram, a tiny photo-sharing companywith lots of users but no revenue. A Face-book rival, social scrap-booking site Pin-terest, raised money earlier this week ata valuation of $1.5 billion in a sign thatventure capitalists and other private in-vestors still see enormous potential inWeb 2.0 companies.

Many of Facebook’s users spendhours a day on the site and share enor-mous amounts of personal information.That in turn enables Facebook to targetits advertising to people’s specific inter-ests, and many analysts believe the hugestore of personal information gives Face-book an advantage that Google and othercannot match.

“literally everything you see on theInternet, you could see inside Facebook— but done with much more of the socialgraph built into it,” said Siva Kumar, CEOof e-commerce company TheFind. “In away, they operate the mall, and every-body in the mall will pay some way or theother to Facebook.” Analysts say the com-pany has vast untapped opportunities inmobile computing, where it has beenweak thus far, and potentially in other In-ternet services such as email and search.Zuckerberg, though unproven as a publiccompany CEO, is widely admired as aproduct visionary who has done a master-ful job in continually improving the Face-book experience.

Skeptics, though, note that only asmall percentage of Facebook users re-spond to advertising on the site. Googleretains a big advantage in that regard, be-cause advertising related to specific In-ternet searches is by nature far morerelevant and thus more valuable.

In Silicon Valley, though, the conven-tional wisdom is that Facebook and itssocial media brethren will be an increas-ingly important force in the businessworld for many years to come.

And no matter how the industry dy-namics unfold over the long term, the influxof wealth arising from Facebook’s extraor-dinary growth has already helped drive amini-boom in San Francisco Bay Area realestate. Income tax revenues related to theIPO will cut the state of California’s budgetdeficit by an estimated $2 billion.

Historic Facebook debut falls flat

MOhAMED A EL-ERIAN

GREECE is following theroad taken by severalother crisis-ridden emerg-ing economies over thepast 30 years. Indeed, ,

there are stunning similarities betweenthis once-proud eurozone member andArgentina prior to its default in 2001.With an equally traumatic implosion –economic, financial, political, and social– now taking place, we should expectheated debate about who is to blame forthe deepening misery that millions ofGreeks now face.

There are four suspects – all of theminvolved in the spectacular boom thatpreceded what will unfortunately proveto be an even more remarkable bust.

Many will be quick to blame succes-sive Greek governments led by what usedto be the two dominant political parties,New Democracy on the right and PASOKon the left. Eager to borrow their countryto prosperity, they racked up enormousdebts while presiding over a dramaticloss of competitiveness and, thus, growthpotential. Some even sought to be highlyeconomical with the truth, failing to dis-close the true extent of their budgetary

slippages and indebtedness.Having borrowed far too much after

joining the eurozone in 2001, NewDemocracy and PASOK let their citizensdown when adjustments and reformswere needed after the 2008 global finan-cial crisis. An initial phase of denial wasfollowed by commitments that could notbe met (indeed, that some argued shouldnot be met, owing to faulty program de-sign). The resulting erosion in Greece’sinternational standing amplified thehardship that citizens were starting tofeel.

Hold on, I hear you say. For everydebt incurred there is a credit extended.You are right.

Greece’s private creditors were morethan happy to pour money into the coun-try, only to shirk their burden-sharing re-sponsibilities when the artificial boomcould no longer be sustained. The over-lending was so widespread that at onepoint it drove down the yield differentialbetween Greek and German bonds to justsix basis points – a ridiculously low levelfor two countries that differ so funda-mentally in terms of economic manage-ment and financial conditions.

Overeager creditors willingly under-wrote this absurd risk premium. Yet,

when it became abundantly clear thatGreece’s debt burden had been taken toinsolvency levels, creditors delayed themoment of truth. They dragged their feetwhen it came to the critical agreement onorderly burden-sharing (that is, accept-ance of a “haircut” on private-sectorclaims on Greece). And the longer theydid that, the more money left Greecewithout any intention of returning.

But neither the Greek governmentnor its private creditors acted in a vac-uum. Both took comfort from the politicalcover provided by the European unifica-tion effort – an historic initiative aimedat securing the continent’s well-beingthrough closer economic and political in-tegration on the basis of credible rulesand effective institutions.

On both counts – rules and institu-tions – the eurozone fell short of whatwas required. Remember, the large coreeconomies (France and Germany) wereamong the first members to breach thebudgetary rules that were establishedwhen the euro was launched. And Euro-pean institutions proved toothless whenit came to enforcing compliance. All ofthis served to sustain the fantasy worldthat both Greece and its creditors happilyinhabited for far too long.

Europe also failed to react properlywhen it became obvious that Greece wasstarting to teeter. European governmentcounterparts failed to converge on a com-mon assessment of the country’s prob-lems, let alone cooperate on a properresponse. While they grudgingly loosenedtheir purse strings to support Greece, theunderlying motives were too short-sighted, and the resulting approach wasstrategically flawed and abysmally coor-dinated.

Finally, there was the InternationalMonetary Fund, the institution chargedwith safeguarding global financial stabil-ity and being a trusted adviser to individ-ual countries. It appears that the IMFsuccumbed too easily to political pres-sures during both the boom and the bust.Political expediency seems to havetrumped analytical robustness, under-mining both the Fund’s direct beneficialrole and its function as a policy and fi-nancial catalyst.

On the surface, each of the four sus-pects has an individual case for arguingthat the finger of blame should bepointed elsewhere. They could even arguethat, at worst, they were uninformed ac-complices. But that is not really right.

None of the four can avoid the reality

that Greece’s collapse would not have oc-curred had they not been complacentduring the boom and, subsequently, ful-filled their responsibilities during thebust so poorly. They sucked each otherinto a sense of false prosperity, only totrip each other up during the inevitabledownturn. Now, one hopes, all four willbe held properly accountable by theirstakeholders and undertake serious self-evaluation.

Most likely, they will end up gettingoff too easy, especially compared to thereal victims of this historic tragedy – themost vulnerable segments of the Greekpopulation, who will become much worseoff, today and for many years to come, asjobs disappear, savings evaporate, andlivelihoods are destroyed. And they maynot be alone. Millions of others may ex-perience collateral damage, as financialcontagion risks spreading to other Euro-pean countries and to the global economyas a whole.

In a fairer world, these vulnerable cit-izens would be entitled to claw back thesalaries, official privileges, and bonusesthat the four parties to blame enjoyed fortoo long. In the world as it is, they are acompelling lesson for the future.

Courtesy: Project Syndicate

Who is responsible for the Greek tragedy?

PRO 20-05-2012_Layout 1 5/20/2012 4:00 AM Page 2

news

Sunday, 20 May, 2012

03

Mina Hasan’s Spring/Summer Collection Rania now in stores!

KARACHI: Mina Hasan’s spring/summer2012 collection “Rania” is now available at theflagship stores in Karachi and lahore.Thename Raniastems from various origins and istranslated for ‘Queen’ in Indian mythology andbeing satisfied and contentedin the Arabic lan-guage. Indeed the collection exudes sedateglamour combining a variety of colours, em-broidery and embellishments to make youstand.

The collection resonates withradiantcolours of the spring season with each outfitaiming to give a royal feel. As it plays on neu-tral, earthy shades the collection beautifully in-corporates sharp colours in the formembroidery, embellishments and piping. Thecuts in the outfit add an endless flow to fabricswhereas the nets and laces used create move-ment and translucency. Variations in fabricand the use of gemstones add a touch of royalelegance to each outfit.The line also plays onnavy blue and peach with the heavier outfits asit integrates a lot of bling with neat embellish-ments. The aim has been to create a goddesslike effect where each outfit is such that itshines through and stands out in a crowd.

EXPO 2012 Yeosu - The epicenter of Ocean renaissanceYEOSU: The International Exposition YeosuKorea 2012 will open for three months on May12 in the New Port area, Yeosu, Jeollanam-do(South Jeolla Province). The International Ex-position is intended to enhance the mutual un-derstanding of humanity, improve welfare, andpresent a future vision for humanity. It is notan ordinary trade exhibition like others: It isan entirely global affair that represents coun-

tries, not corporations, and it promotes thename branding of every participating country.For this reason, the Expo is often referred to as“the economic and cultural Olympics,” andeven called, “one of the three major interna-tional festivals,” along with the Olympic Gamesand the FIFA World Cup. More than 100 coun-tries will participate in Expo 2012 Yeosu topresent their latest ocean technologies and jointhe discussion to improve the ocean environ-ment.

The International Exposition is authorizedby the Bureau International des Expositions(BIE). Expo Yeosu 2012 has special meaning tothe Republic of Korea as hosting the eventproves that it has gained a significant presencein the international community, which enablesit to present to the world critical issues facinghumanity and seek common solutions to themwith other countries.

The theme of EXPO 2012 Yeosu is “Theliving Ocean and Coast.” Issues concerningthe ocean environment, such as the worseningocean pollution, destruction of ocean ecosys-tems, and the rise in sea level, affect the entireworld. EXPO 2012 Yeosu seeks to find a solu-tion for such common challenges and presenta new vision for the ocean environment and anew ocean culture.

15-year-old creates non-invasivepancreatic cancer detection toolISLAMABAD: Jack Andraka, 15, ofCrownsville, USA. was awarded first place forhis new method to detect pancreatic cancer atthis year’s Intel International Science and En-gineering Fair, a program of Society for Sci-ence & the Public. Based on diabetic test paper,Jack created a simple dip-stick sensor to testblood or urine to determine whether or not apatient has early-stage pancreatic cancer. Hisstudy resulted in over 90 percent accuracy andshowed his patent-pending sensor to be 28times faster, 28 times less expensive and over100 times more sensitive than current tests.Jack received the Gordon E. Moore Award,named in honor of Intel co-founder and retiredchairman and CEO of $75,000.

From Pakistan, Shiza Gulab, MahnoorHassan and Bushra Shahed from Institute ofComputer and Management Sciences werewinners of a fourth place grand award in theanimal sciences category and awarded$500.00 for their project entitled ‘energysquare for cattle’.

Two students, Nicholas Schiefer, 17, ofPickering, Ontario, Canada and Ari Dyckovsky,

18, of leesburg, Va, USA., each received theIntel Foundation Young Scientist Award of$50,000.

Nicholas studied what he calls “mi-crosearch,” or the ability to search the fastest-growing information medium: small amountsof content, such as tweets and Facebook statusupdates. Through his research, Nicholas hopesto improve search engines’ capabilities, whichwill in turn improve access to information.

Ari investigated the science of quantumteleportation. He found that once atoms arelinked through a process called “entangle-ment,” information from one atom will just ap-pear in another atom when the quantum stateof the first atom is destroyed. Using thismethod, organizations requiring high levels ofdata security, such as the National Security Ad-ministration, could send an encrypted messagewithout running the risk of interception be-cause the information would not travel to itsnew location; it would simply appear there.

Bahria Town puts Pakistan on theGlobal Real Estate mapLAHORE: Bahria Town wins Five PrestigiousAwards in Kuala lumpur Malaysia at the “AsiaPacific International Property Awards 2012-13”

Bahria Town, Asia’s largest private real es-tate developer, has won five highly prestigiousawards under various categories in Kualalumpur, Malaysia at the recently held officialaward ceremony for Asia Pacific InternationalProperty Awards 2012-13, the world’s mostprestigious competition recognized as thehighest standard of excellence throughout theglobal industry. Bahria Town was the onlyproperty developer from Pakistan to win theprestigious property awards. Out of the fiveaccolades two received were in the “Five Star”category whilst the other three were ranked as“Highly Commended”, another great achieve-ment and proud moment Bahria Town earnsfor Pakistan. The awards are a sure proof thatBahria Town standards are at par with theglobal standards.

Speaking on the achievement, Malik RiazHussain, Chairman Bahria Town, said “This isan extremely proud moment for not onlyBahria Town but the entire nation. We arehonored to be a part of a historical moment inreal estate sector of Pakistan. The accoladesare a testament of the exceptional standardsmaintained in all our developments. We willInshallah continue to deliver world class proj-ects exceeding everyone’s expectations.”

CORPORATE CORNER

GLOBAL MARKETS WEEKAHEAD

NEW YORK/LONDON REUTERS

GOlD rose more than 1 percent onFriday, on track for its largesttwo-day gain since October,boosted by investors’ consolida-tion of positions ahead of the

weekend and a stronger euro.The second day of gains helped bolster con-

fidence, which had been shaken by gold’s fallearlier this week to a four-month low at $1,527an ounce, near critical long-term support levels.

But traders remained cautious given howthe escalating crisis in Europe has driven thesingle currency lower this month.

“There is still no conviction in the mar-ket. If gold was a safe haven, it should behigher. Physical demand is mediocre andthe Europeans want the dollar, whichis why it is so strong,” a physicalU.S. gold trader said.

The psychologicallyimportant $1,600-per-ounce mark remainedelusive.

It got close, hittingan intraday high of$1,597.4 an ounce in latemorning, before meetingtechnical resistance and eas-ing back to around $1,590.

Spot gold was up 1 percent at$1,588.96 an ounce at 2:06 p.m. EDT, whileU.S. gold futures for June delivery settled 1.08percent higher at $1,591.9.

That takes gold up 0.6 percent on the week,

snapping two weeks of losses, and brings it backto positive territory year-to-date, with a 1.5-per-cent rise.

While it was a far cry from the 14-percentgain in February when prices came close to$1,800 an ounce, bullion outpaced the U.S. eq-uity market after Facebook’s much-anticipateddebut stumbled after a delayed opening.

Trading on Friday returned to familiartrends, tracking

the euro,

which recov-ered from four-month

lows against the dollar, thoughconcerns over a Greek euro exit and in-

stability in the Spanish banking system weak-ened confidence. MOMENTUM KEY: “To see a return of goldreacting positively to macro stresses is indeedrefreshing, but it is still far too early to makeany firm conclusions from here that gold has in-deed turned the corner,” UBS said in a note.

“Momentum will be key, and follow-

through buying will have to kick in to encourageinvestors to jump in.”

Holdings of gold-backed exchange-tradedfunds tracked by Reuters, which issue securitiesbacked by physical metal, edged up 76,000ounces on Thursday, but remained under the70-million-ounce level they slipped below aweek ago.

Among other precious metals, silver gained2.18 percent at $28.64 an ounce.

The gold/silver ratio, which measures thenumber of silver ounces needed to buy an ounceof gold, touched 56.6 this week, its highest sincelate December, easing back on Friday to around

56 as silver outperformed gold in a rising mar-ket.

Spot platinum was up 0.53 percent at$1,452.75 an ounce, while spot palladium

put on 0.54 percent at $601.22 anounce. Both metals underper-

formed surging gold prices, withthe gold:platinum ratio rising to

a 3-1/2-month high at 1.09.As chiefly industrial met-

als used in autocatalysts, plat-inum and palladium are more

exposed than gold to the economiccycle, and have suffered from a lack of

car demand in recent years. Industry playersgathered in london for Platinum Week thisweek were pessimistic that prices would recoversoon.

In a rare positive story for the metal, a sen-ior official of Hong Kong-based jeweler lukFook said China’s platinum jeweler market, theworld’s largest, has great potential for growthas rising wealth fuels luxury product demand.

Gold jumps, heads for biggest2-day gain since October

LONDONREUTERS

The now familiar Europeancycle of crisis followed by po-litical action, temporaryrespite, then another crisisenters that crucial secondstage next week when leadersof the 27-member EuropeanUnion seek solutions in Brus-sels. Investors will also beconcerned with how hard thecrisis is hitting the euro econ-omy, with flash estimates ofbusiness activity due from thelatest purchasing managers’surveys, and with the viewfrom Bank of Japan policy-makers meeting in Tokyo.

The potential for a Greekeuro exit and the deteriorat-ing health of the Spanishbanking system have fueled agrowing sense among in-vestors that the crisis in the17-member currency bloc isnearing new heights.

“This whole European sit-uation has been managed viacrisis,” said Didier Saint-Georges, a member of the in-vestment committee ofCarmignac Gestion, whichhas about 50 billion euros($64 billion) under manage-ment.

“You only make progresseach time after getting prettyclose to the cliff.”

“The key thing is whethera crisis will be big enough thatit derails the global picture.That is the question and theone that matters the most,” hesaid.

Fears that the euro zonedisruption will upset globalgrowth were behind a world-wide shift out of riskier assetsin the past week that droveglobal stocks, as measured bythe MSCI index,.MIWD00000PUS to theirlows for the year and the dol-lar to four-month highs. .DXY

The selloff spread to areasof the world where growthprospects still inspire hope,with emerging market equi-ties .MSCIEF at their lowestsince December 2011 as theypost their longest loss-makingstretch since 2008. like manyglobal asset allocators, Carmi-gnac Gestion has adopted adefensive investment strategyin the current environment,hedging euro risks with thedollar and Japanese yen, andselecting stocks that are notexposed to the current macro-economic risks to drive per-formance.

“We do anticipate whenwe have these short termcrises that they will have animpact on the market, but ifthey don’t have an impact onthe real economy then overtime we can still do prettywell in China or the U.S.,”Saint-Georges said.

MUDDlED RESPONSEMuddling through is po-

tentially the most likely out-come from the informal EUleaders’ dinner, but marketswill be looking for some re-assurance that a crediblepolicy response is going toemerge at the formal EUCouncil summit in lateJune.

“The leaders will speak

about growth measures, butmajor concrete measuresare unlikely at this stage,”said Thomas Costerg aneconomist at StandardCharted Bank.

Europe’s leaders are stillat odds over the role of thenew permanent euro zonebail-out fund, the EuropeanStability Mechanism (ESM),while France’s new presi-dent, Francois Hollande, isleading a dispute with Ger-many over the bloc’s ‘fiscalcompact’ to enforce govern-ment budget discipline.

While the politiciansdiscuss a response to thecrisis, investors have soughtcomfort in the idea that theEuropean Central Bank willact to prevent any major fi-nancial accident.

But after it pumped overa trillion euros ($1.27 tril-lion) into the region’s banksso far this year, the thresh-old for further action fromthe central bank could bequite high.

“The more they look atwhat they’ve done thus far,the more they’re findingthey’ve just shoveled moneyinto a never ending hole,”Jeff Sica, president andchief investment officer ofSICA Wealth Management,an independent wealthmanager said.

“The ECB has to look atthe French election (out-come) and what’s going onand say ‘nobody is willing todo anything except standthere and wait for us to givethem more money’,” he said.CONTAGION FEARS:

The Bank of Japan mayshed some light on how pol-icymakers are gauging therepercussions of the eurozone crisis.

The central bank is notexpected to make anychange in its current assetpurchase plan after the pro-gram was extended at thelast meeting but it couldhint at a future response ifit judges the global outlookis worsening.

Japan’s Nikkei index.N225 shed 3 percent onFriday to log a seventhstraight week of losses, itslongest such run since thethird quarter of 2001.

Flash estimates of thelatest Purchasing Manager’sindexes (PMIs) for Ger-many, France and the eurozone on May 24 are ex-pected to show troubledeconomies in the euro southstill shrinking sharply butthat Germany, the region’sdominant economy, remainson track for growth.

The influential GermanIfo survey of business senti-ment for May, also due onMay 24, will provide furtherclarity on whether Germanyis at risk of losing momen-tum because of the crisis.

Economists polled byReuters in the past weeksaid they expect the euroarea’s total GDP to contractmodestly in the secondquarter after it stagnated inthe first three months of theyear.

Euro zone

policy action

becoming critical

PRO 20-05-2012_Layout 1 5/20/2012 4:00 AM Page 3