KARACHI: Karachi stock market could see a surge in index by 25 percent, following the successes in war against terrorism.Credit Suisse analyst, Farid Khan in an interview to a foreign agency told this. He said that a surge in the stock market could be seen, as the government has stepped up its operation against the terrorists.Farid Khan said that Pakistan stock market index could be included in the Morgan Stanley Frontier Index, which would help in reviving the confidence of the investors.He said that inflation has mellowed down and a further cut in the interest rate by the Central Bank was expected.Wednesday, May 13, 2009
KSE index could increase by 25pc: Credit Suisse
KARACHI: Karachi stock market could see a surge in index by 25 percent, following the successes in war against terrorism.Credit Suisse analyst, Farid Khan in an interview to a foreign agency told this. He said that a surge in the stock market could be seen, as the government has stepped up its operation against the terrorists.Farid Khan said that Pakistan stock market index could be included in the Morgan Stanley Frontier Index, which would help in reviving the confidence of the investors.He said that inflation has mellowed down and a further cut in the interest rate by the Central Bank was expected.
Pak-Iran to increase number of items in PTA
TEHRAN: Pakistan and Iran will enlarge the lists of items under preferential trade agreement (PTA).This was decided in the 5th Pak-Iran joint trade committee. It was also decided that Pak-Iran experts meeting would be held in Islamabad in August for finalizing the lists of the trade items in mutual consultations.Despite the two countries giving concession in import duty on 647 items under preferential trade agreement-2006, the bilateral trade volume remained less.The meeting decided that joint border trade committee would be constituted for the solution of the trade lacunae.PSO seeks offers for import of furnace oil
KARACHI: Pakistan State Oil (PSO) has called for offers for the import of 0.4 million tons of furnace oil.PSO released handout said that among the furnace import contracts, 0.3 million tons of new light sulphur fuel oil final contract has been issued and required to be supplied between June-September at Karachi Port, while for the same period provisional tender has been floated for the supply of remaining 0.1 million tons. PSO has fixed May 16 the last date for submitting offers.
Oil tops $60, defying recession
NEW YORK: Crude oil prices briefly topped $60 a barrel early Tuesday, riding an unexpected wave of enthusiasm for the fuel in the midst of global recession.The rising price will pinch consumers and industries that had found lower oil prices one of the few bright spots in the economic downturn. But $60 oil also could boost oil company profits enough to avoid deep cuts in spending on production -- cutbacks that many experts have warned could set up a jarring price spike when demand recovers.Investors helped drive up oil prices in recent weeks, pulling their money out of cash and putting it into hard assets such as crude oil as they anticipated imminent economic recovery and a weaker dollar -- and were willing to stomach more risk. Oil futures briefly topped $60 a barrel in trading Tuesday on the New York Mercantile Exchange for the first time since November, before falling back to close at $58.85, up 35 cents. Oil prices are up 73% since bottoming out at just under $34 in February.Oil prices are rising even as U.S. demand for petroleum products has fallen to its lowest level in a decade. But while U.S. drivers and industries have been slow to increase energy consumption, Chinese oil demand is strong. On Tuesday, China reported near-record volumes of oil imports, indicating that an aggressive economic-stimulus effort by the Chinese government is reviving consumption. April imports were up nearly 14% from a year ago. Chinese car sales last month set a new record.The thirst for oil from emerging markets was a prime reason prices surged several years ago, breaking through $60 a barrel for the first time in mid-2005. Rapid growth in Chinese demand laid the groundwork for a period of record-breaking prices and profits. Asian demand is expected to continue to have a big impact on prices, as any rebound in consumption in the U.S. and Europe is tempered by increased energy efficiency and an emphasis on renewable fuels.There are 2.5 billion people in China and India rising to the level of middle-class consumers, and there's declining production in the world's maturing oil fields, noted Chris Ross, a vice president of economic consultant CRA International. "You put that together and you have the pretty serious foundation for a more robust price environment," he said.Oil's rapid return to $60 has sparked concern that rising prices could slow an economic recovery. Noting that a $10 a barrel rise in oil prices translates into a $5.5 billion monthly hit to U.S. consumers and industry, J. P. Morgan analysts recently said that "in the current fragile economic state, [rising oil prices] may be an unnecessary shock."Still, the current rally in crude prices, so far a shadow of last year's race to $145 a barrel, might defuse the potential for a much more dramatic price spike when oil demand returns in the U.S. and other industrialized economies. Current prices should bolster some energy companies' decisions to continue drilling through the relatively brief period of low prices, limiting the possibility of a future supply crunch. Industry behemoths such as Exxon Mobil Corp. and Royal Dutch Shell PLC have maintained their multibillion-dollar capital budgets, despite falling profits in recent quarters.
Sunday, May 10, 2009
LAHORE: All Pakistan Gems and Jewellers Association Convention held here demanded from the government for the abolishment of withholding tax.
SINGAPORE: Oil prices eased in Asian trade Monday after breaching the 58-dollar mark last week on hopes that the flagging global economy was on the mend, analysts said. New York's main futures contract, light sweet crude for delivery in June, was down 20 cents to 58.43 dollars a barrel from Friday's close at around 0200 GMT. Brent North Sea crude for June delivery shed 10 cents to 58.04 dollars.Analysts said buoyant oil prices were a cause for concern as the fundamentals of the oil markets were still weak. The prices were likely to rise further in the week ahead as "60 dollars looks like a magnet for investors in oil," said the analysts.
Jewellers Association demands abolish withholding tax
LAHORE: All Pakistan Gems and Jewellers Association Convention held here demanded from the government for the abolishment of withholding tax.Earlier, Sarrafa and Jewelers Association (Lahore Division)’s office-bearers took oath in the convention held at Hamdard centre here.
Islamic finance has a bigger role after global slowdown
SINGAPORE: Islamic finance must strengthen regulation, boost its professional staff and diversify as it takes on a bigger global role in the aftermath of the worldwide financial crisis, experts said.Financial products compliant with Islamic shariah law are likely to gain in popularity as investors seek safer havens after the ruin caused by toxic derivatives sold globally by mainstream Western banks, they said.However, experts warn that Islamic financial institutions must be on their guard against falling into the same unbridled excesses that jolted Wall Street and snowballed into a global economic downturn. "Islamic finance is not immune from such pitfalls. Hence, we must be careful to avoid this error in the Islamic financial industry," said Muhammad Sulaiman Al-Jasser, governor of the Saudi Arabian Monetary Agency.Islamic finance is now established in 47 countries with more than 600 institutions managing "balance-sheet assets" worth over 630 billion US dollars, with another 200 billion to 300 billion dollars managed as investment funds, he added.Issuance of Islamic bonds, called sukuk, in Asian currencies aggregated to 64.3 billion dollars in 2008, down 1.5 percent from 2007 when it expanded by 50 percent over the year before, Moody's Investor Service said this month.But the industry has much room for growth as Islamic finance represents only 1.0 percent of the total assets held by the global financial markets, experts said.
Dung Quat Refinery Gasoline Commercially Available From June
HANOI -(Dow Jones)- Gasoline from Dung Quat Refinery, Vietnam's first, will be commercially available in the domestic market from June, the Ministry of Natural Resources and Environment said Monday.
The ministry said the refinery will provide between 400,000 and 500,000 metric tons of oil products to the market each month, without giving the figure for gasoline.
A refinery operator said late last month the plant started pumping out gasoline April 29.
He said gasoline is the last of a range of products the refinery produces.
The refinery is owned by state-run Vietnam Oil and Gas Group, also known as PetroVietnam.
The refinery will receive 80,000 tons of domestic crude oil for operations during the three-month period, it said.
PetroVietnam said the refinery will operate at 70% capacity by June and at 100% by August. It is expected to produce 2.6 million tons of petroleum products this year.
The $3.1 billion refinery, located 885 kilometers south of Hanoi in Quang Ngai province, is expected to meet a third of Vietnam's petroleum product needs.
When fully operational, it will be able to produce 1.9 million tons of gasoline, 3 million tons of diesel, 290,000 tons of liquefied petroleum gas, 110,000 tons of propylene, 410,000 tons of jet fuel and 320,000 tons of fuel oil, PetroVietnam said.
The ministry said the refinery will provide between 400,000 and 500,000 metric tons of oil products to the market each month, without giving the figure for gasoline.
A refinery operator said late last month the plant started pumping out gasoline April 29.
He said gasoline is the last of a range of products the refinery produces.
The refinery is owned by state-run Vietnam Oil and Gas Group, also known as PetroVietnam.
The refinery will receive 80,000 tons of domestic crude oil for operations during the three-month period, it said.
PetroVietnam said the refinery will operate at 70% capacity by June and at 100% by August. It is expected to produce 2.6 million tons of petroleum products this year.
The $3.1 billion refinery, located 885 kilometers south of Hanoi in Quang Ngai province, is expected to meet a third of Vietnam's petroleum product needs.
When fully operational, it will be able to produce 1.9 million tons of gasoline, 3 million tons of diesel, 290,000 tons of liquefied petroleum gas, 110,000 tons of propylene, 410,000 tons of jet fuel and 320,000 tons of fuel oil, PetroVietnam said.
Al Qaeda Pipeline Through Syria Reactivated - Report
WASHINGTON (AFP)--A Syrian pipeline used by Al Qaeda in Iraq to smuggle Islamic fighters into Iraq has been reactivated after a short lull, The Washington Post reported late Sunday.
The newspaper said the revival of the transit route that officials had declared all but closed comes as the administration of President Barack Obama is exploring a new diplomatic dialogue with Syria.
On Wednesday, acting Assistant Secretary of State Jeffrey Feltman and National Security Council official Daniel Shapiro arrived in Syria for their second visit since Obama's inauguration as president.
However later last week, the administration renewed sanctions against Syria, accusing Damascus of supporting Mideast terrorism and undermining Iraqi stability.
The Bush administration frequently criticized Syria for the transit of foreign fighters, suggesting that the authoritarian government of President Bashar al- Assad was involved in the traffic, the report said.
"We do think that the knowledge of these networks exists at least within the Syrian intelligence community," the paper quoted an unnamed senior U.S. military official as saying. "What level, if it's low or high up, we just don't have a good gauge on."
Gen. David Petraeus, who heads the U.S. Central Command, told Congress late last month that Al Qaeda's Iraq pipeline through Syria had been "reactivated."
The military is particularly concerned about the area around Mosul, in the northwest near the Syrian border, which officials have described as the last bastion of Al Qaeda in Iraq.
"There was a period...where we were probably seeing less than half a dozen foreign fighters being pushed through the network," the official told The Post.
More recently, he said, the estimate has risen to 20 a month, and various intelligence sources have noted an increased "demand call" in Iraq for foreign fighters.
The newspaper said the revival of the transit route that officials had declared all but closed comes as the administration of President Barack Obama is exploring a new diplomatic dialogue with Syria.
On Wednesday, acting Assistant Secretary of State Jeffrey Feltman and National Security Council official Daniel Shapiro arrived in Syria for their second visit since Obama's inauguration as president.
However later last week, the administration renewed sanctions against Syria, accusing Damascus of supporting Mideast terrorism and undermining Iraqi stability.
The Bush administration frequently criticized Syria for the transit of foreign fighters, suggesting that the authoritarian government of President Bashar al- Assad was involved in the traffic, the report said.
"We do think that the knowledge of these networks exists at least within the Syrian intelligence community," the paper quoted an unnamed senior U.S. military official as saying. "What level, if it's low or high up, we just don't have a good gauge on."
Gen. David Petraeus, who heads the U.S. Central Command, told Congress late last month that Al Qaeda's Iraq pipeline through Syria had been "reactivated."
The military is particularly concerned about the area around Mosul, in the northwest near the Syrian border, which officials have described as the last bastion of Al Qaeda in Iraq.
"There was a period...where we were probably seeing less than half a dozen foreign fighters being pushed through the network," the official told The Post.
More recently, he said, the estimate has risen to 20 a month, and various intelligence sources have noted an increased "demand call" in Iraq for foreign fighters.
Australian Mining Technology Cos Seek To Invest In Vietnam
HANOI -(Dow Jones)- Representatives from 15 Australian mining technology firms will visit Vietnam later this month to seek investment opportunities in the country's mining industry, Vietnam's Ministry of Natural Resources and Environment said Monday.
During the three-day visit starting Monday, the delegation will hold talks with state-run Vietnam National Coal-Mineral Industries Group and visit the Sin Quyen Copper Mine and Tang Loong Copper Refining Plant in the northern province of Lao Cai, the ministry said in a statement.
The delegation will introduce their mining technologies and services to mining firms in Vietnam, the ministry added.
During the three-day visit starting Monday, the delegation will hold talks with state-run Vietnam National Coal-Mineral Industries Group and visit the Sin Quyen Copper Mine and Tang Loong Copper Refining Plant in the northern province of Lao Cai, the ministry said in a statement.
The delegation will introduce their mining technologies and services to mining firms in Vietnam, the ministry added.
Global Ocean Talks Begin In Indonesia
MANADO, Indonesia (AFP)--A global meeting on the future of the world's oceans opened in Indonesia Monday with discussions aimed at helping set the stage for December's climate change talks in Denmark.
Officials from more than 70 countries met in Manado city for the five-day World Ocean Conference, a ministerial-level meeting touted as the first major global talks on the role of oceans in mitigating climate change and global warming.
Environment, fisheries and resources ministers are expected to pass a joint declaration aimed at influencing talks in Copenhagen in December that will discuss a successor to the expiring Kyoto Protocol on climate change.
Host Indonesia says it hopes to broaden the scope of any future climate agreement to encompass marine environments.
"It is clear that our precious marine resources are under dire and increasing threat and that in many parts of the world climate change will accelerate their destruction," Indonesian Maritime Affairs and Fisheries Minister Freddy Numberi said at the conference opening.
"Adaptation and mitigation measures are urgently needed to be taken up not only to save marine and coastal resources but also to save the coastal communities."
Leaders from six countries - Indonesia, the Philippines, Malaysia, East Timor, the Solomon Islands and Papua New Guinea - will meet on the sidelines of the conference to launch a plan to save the Coral Triangle, an underwater ecosystem that is home to more than half the world's coral reefs.
Officials from more than 70 countries met in Manado city for the five-day World Ocean Conference, a ministerial-level meeting touted as the first major global talks on the role of oceans in mitigating climate change and global warming.
Environment, fisheries and resources ministers are expected to pass a joint declaration aimed at influencing talks in Copenhagen in December that will discuss a successor to the expiring Kyoto Protocol on climate change.
Host Indonesia says it hopes to broaden the scope of any future climate agreement to encompass marine environments.
"It is clear that our precious marine resources are under dire and increasing threat and that in many parts of the world climate change will accelerate their destruction," Indonesian Maritime Affairs and Fisheries Minister Freddy Numberi said at the conference opening.
"Adaptation and mitigation measures are urgently needed to be taken up not only to save marine and coastal resources but also to save the coastal communities."
Leaders from six countries - Indonesia, the Philippines, Malaysia, East Timor, the Solomon Islands and Papua New Guinea - will meet on the sidelines of the conference to launch a plan to save the Coral Triangle, an underwater ecosystem that is home to more than half the world's coral reefs.
BOJ Nishimura: Hard To Stop Financial, Econ Vicious Cycle
TOKYO -(Dow Jones)- Bank of Japan Deputy Gov. Kiyohiko Nishimura voiced concerns last Friday that it could be difficult to stop the current vicious cycle between financial distress and economic activity.
"Once an adverse feedback loop has been started, it is extremely difficult and costly to stop it and to restore confidence" in the markets, Nishimura said at a conference held by the Federal Reserve Bank of Chicago on Friday, according to the text of the speech released by the central bank on Monday.
While there is some resemblance between the financial crisis in the U.S. and the one Japan experienced in the 1990s, the current crisis is "far more complex, interconnected and global" than Japan's so-called "lost decade," Nishimura said.
The deputy chief also pointed out the difficulty in getting "reasonable estimates of losses and a reasonable pricing of troubled assets" during a financial turmoil - which leads to erosion in investor confidence and "excessive aversion to uncertainty."
To prevent further deepening of the crisis, Nishimura said it is necessary to "make every effort to avoid macro-systemic financial distress, and thus to regulate macro-systemically important financial institutions more closely and comprehensively."
"Once an adverse feedback loop has been started, it is extremely difficult and costly to stop it and to restore confidence" in the markets, Nishimura said at a conference held by the Federal Reserve Bank of Chicago on Friday, according to the text of the speech released by the central bank on Monday.
While there is some resemblance between the financial crisis in the U.S. and the one Japan experienced in the 1990s, the current crisis is "far more complex, interconnected and global" than Japan's so-called "lost decade," Nishimura said.
The deputy chief also pointed out the difficulty in getting "reasonable estimates of losses and a reasonable pricing of troubled assets" during a financial turmoil - which leads to erosion in investor confidence and "excessive aversion to uncertainty."
To prevent further deepening of the crisis, Nishimura said it is necessary to "make every effort to avoid macro-systemic financial distress, and thus to regulate macro-systemically important financial institutions more closely and comprehensively."
China Bank Regulator:Bks Face Long-Term Risks From Urbanization
BEIJING -(Dow Jones)- China's banks face a potential concentration of risks over the long term due to their exposure to projects related to the country's urbanization process, China Banking Regulatory Commission Chairman Liu Mingkang said Monday.
Liu's comments in a speech at the Asian Banker Summit 2009 in Beijing highlight the regulator's concerns over systemic risks in the banking sector.
Beijing has urged banks to direct huge amount of loans to support infrastructure projects as well as other types of industrial investment. In the first quarter, banks issued CNY4.58 trillion worth of new loans, nearly equal to all new lending made last year.
Separately, Liu said China's financial infrastructure, such as the clearing system for derivative contracts, has yet to be fully developed. He also said China still doesn't have deposit insurance or a bankruptcy law for financial companies.
Liu's comments in a speech at the Asian Banker Summit 2009 in Beijing highlight the regulator's concerns over systemic risks in the banking sector.
Beijing has urged banks to direct huge amount of loans to support infrastructure projects as well as other types of industrial investment. In the first quarter, banks issued CNY4.58 trillion worth of new loans, nearly equal to all new lending made last year.
Separately, Liu said China's financial infrastructure, such as the clearing system for derivative contracts, has yet to be fully developed. He also said China still doesn't have deposit insurance or a bankruptcy law for financial companies.
China, UK To Discuss Reform Of International Financial Systems, Boosting Trade
BEIJING -(Dow Jones)- China and the U.K. will discuss reform of the international financial system, the promotion of financial stability, the development of capital markets, and cooperation to boost bilateral trade and investment, Vice Finance Minister Zhu Guangyao said ahead of the Second China- U.K. Economic and Financial Dialogue that begins Monday.
Zhu's comments, made at a news briefing in London on Sunday, were posted in a statement on the Chinese government's Web site Monday.
Chinese Vice Premier Wang Qishan will chair the dialogue with U.K. Chancellor of the Exchequer Alistair Darling. Wang will also meet U.K. Prime Minister Gordon Brown and representatives of local enterprises and financial institutions, the statement said.
Zhu's comments, made at a news briefing in London on Sunday, were posted in a statement on the Chinese government's Web site Monday.
Chinese Vice Premier Wang Qishan will chair the dialogue with U.K. Chancellor of the Exchequer Alistair Darling. Wang will also meet U.K. Prime Minister Gordon Brown and representatives of local enterprises and financial institutions, the statement said.
India April Local Car Sales Rise 4.2% To 102,899 Vehicles
NEW DELHI -(Dow Jones)- Local car sales in India rose 4.2% in April to 102,899 units from 98,752 a year earlier, data issued Monday by the Society of Indian Automobile Manufacturers showed.
SIAM didn't give any reason for the rise in the sale of cars.
Automobile sales are considered a key indicator of India's economic condition. Vehicle sales in units
April '09 April '08 Change
Passenger Cars 102,899 98,752 4.2%
Utility Vehicles 22,320 22,201 (0.5%)
Multipurpose Vehicles 10,478 9,070 15.5%
Light Trucks/Buses 18,819 14,676 28%
Medium, Heavy Trucks/Buses 11,023 18,950 (42%)
Scooters 97,129 81,002 20%
Motorcycles 562,357 501,592 12%
Mopeds 40,915 32,944 24%
Three Wheelers 27,524 27,066 1.7%
Figures in parantheses represent decline in sales.
SIAM didn't give any reason for the rise in the sale of cars.
Automobile sales are considered a key indicator of India's economic condition. Vehicle sales in units
April '09 April '08 Change
Passenger Cars 102,899 98,752 4.2%
Utility Vehicles 22,320 22,201 (0.5%)
Multipurpose Vehicles 10,478 9,070 15.5%
Light Trucks/Buses 18,819 14,676 28%
Medium, Heavy Trucks/Buses 11,023 18,950 (42%)
Scooters 97,129 81,002 20%
Motorcycles 562,357 501,592 12%
Mopeds 40,915 32,944 24%
Three Wheelers 27,524 27,066 1.7%
Figures in parantheses represent decline in sales.
ASIA MARKETS: Toyota Leads Auto-stock Sell-off
Shares of major automakers in Asia traded mostly lower Monday as the industry continued to reel from news that the world's largest carmaker had posted its first-ever annual loss.
"It was an extremely difficult operating environment for the automakers during the quarter (and past 12 months), and it doesn't appear to be getting any easier," David Silver, an analyst at Wall Street Strategies, wrote in a recent research note.
"The Japanese yen has remained stubbornly high, but the fact remains once the economy in the United States begins to turn, other economies around the world will follow," he said.
Toyota Motor Corp. (TM) reported Friday a $7.7 billion quarterly loss and forecast another loss for the current fiscal year.
"The company reported its first loss since becoming a public company in 1950," said Silver.
Toyota had already warned it would report full-year loss, which Silver said was the first since it became a public company in 1950.
However, the warning, issued in February had called for a net loss of 350 billion yen ($3.6 billion). The actual result was a larger loss of 437 billion yen. A year earlier, Toyota saw a net profit of 1.72 trillion yen.
During Monday's morning session, shares of Toyota fell by 5%.
Other automakers also headed lower, with Honda Motor Co. (HMC) falling 3.1%, Nissan Motors shares (NSANY) down 4.4%, and Mazda Motor Corp. (7261.TO) losing 4.1% in Tokyo.
In Seoul, shares of Hyundai Motor Co. (HYMTF) fell by 1.7%.
Nissan and Mazda are scheduled to report their financial results on Tuesday.
Isuzu Motors (ISUZY) saw its stock climb 0.5% in Tokyo ahead of its fiscal year results due later Monday. The company expects to report a net loss of 15.85 billion yen.
Kia Motors Corp. (KIMTF) also managed to climb 1.8% in Seoul, and shares of mainland China's Dongfeng Motor Group were 4.5% higher.
The share moves came amid mixed trading in the broader Asian markets. The Nikkei 225 Average fell 0.9% in Tokyo, and the broader Topix fell 0.1%, but Hong Kong's Hang Seng Index was up 0.8% and the China Shanghai Composite gained 0.9%.
Challenges abound
Toyota's losses were "primarily linked to the plunge in sales," said Silver.
Its rivals have, of course, been taking similar hits. Ford Motor Co. (F) in April saw its U.S. vehicle sales drop by 32%, but it still outsold Toyota for the first time in at least a year, according to a note from analysts at Canaccord Adams released on May 4.
"You know things suck when dropping 32% ranks you No. 1," analysts at Canaccord said in last week's note.
The Japan Automobile Importers Association reported that sales of imported motor vehicles in Japan, including those made by Japanese carmakers overseas, dropped for a 12th month in a row, down 30.5% from a year earlier to 11,348 units in April, according to a Kyodo News report on the data.
And many companies have been hurt by the strength in the Japanese yen.
Honda, for example, cited the recently strong yen as a major reason for the 77% drop in its fiscal year income.
In Asian trade Monday, one U.S. dollar bought 98.37 yen, down from 98.93 yen on Friday.
But despite the sales and currency headwinds, Wall Street Strategies' Silver is still bullish, reiterating his recommendation to buy Toyota stock regardless of the expected loss for the current fiscal year.
"We feel the company is best positioned to capitalize on the eventual rebound in auto sales," he said.
And "the fact remains that despite the steep drop, General Motors and Toyota are still No. 1 and No. 2 in the market," he said.
He also noted weakness in Toyota's U.S. competitors.
With "bankruptcy rumors circling around General Motors, and the [bankruptcy] filing by Chrysler, the American marketplace is wide open for another player to try to enter," he said.
Chrysler LLC fell into bankruptcy in late April and last week said it expects billions of dollars in losses in the coming years.
On Thursday, U.S.-based General Motors Corp. (GM) said it lost $6 billion as revenue was cut almost in half.
"It was an extremely difficult operating environment for the automakers during the quarter (and past 12 months), and it doesn't appear to be getting any easier," David Silver, an analyst at Wall Street Strategies, wrote in a recent research note.
"The Japanese yen has remained stubbornly high, but the fact remains once the economy in the United States begins to turn, other economies around the world will follow," he said.
Toyota Motor Corp. (TM) reported Friday a $7.7 billion quarterly loss and forecast another loss for the current fiscal year.
"The company reported its first loss since becoming a public company in 1950," said Silver.
Toyota had already warned it would report full-year loss, which Silver said was the first since it became a public company in 1950.
However, the warning, issued in February had called for a net loss of 350 billion yen ($3.6 billion). The actual result was a larger loss of 437 billion yen. A year earlier, Toyota saw a net profit of 1.72 trillion yen.
During Monday's morning session, shares of Toyota fell by 5%.
Other automakers also headed lower, with Honda Motor Co. (HMC) falling 3.1%, Nissan Motors shares (NSANY) down 4.4%, and Mazda Motor Corp. (7261.TO) losing 4.1% in Tokyo.
In Seoul, shares of Hyundai Motor Co. (HYMTF) fell by 1.7%.
Nissan and Mazda are scheduled to report their financial results on Tuesday.
Isuzu Motors (ISUZY) saw its stock climb 0.5% in Tokyo ahead of its fiscal year results due later Monday. The company expects to report a net loss of 15.85 billion yen.
Kia Motors Corp. (KIMTF) also managed to climb 1.8% in Seoul, and shares of mainland China's Dongfeng Motor Group were 4.5% higher.
The share moves came amid mixed trading in the broader Asian markets. The Nikkei 225 Average fell 0.9% in Tokyo, and the broader Topix fell 0.1%, but Hong Kong's Hang Seng Index was up 0.8% and the China Shanghai Composite gained 0.9%.
Challenges abound
Toyota's losses were "primarily linked to the plunge in sales," said Silver.
Its rivals have, of course, been taking similar hits. Ford Motor Co. (F) in April saw its U.S. vehicle sales drop by 32%, but it still outsold Toyota for the first time in at least a year, according to a note from analysts at Canaccord Adams released on May 4.
"You know things suck when dropping 32% ranks you No. 1," analysts at Canaccord said in last week's note.
The Japan Automobile Importers Association reported that sales of imported motor vehicles in Japan, including those made by Japanese carmakers overseas, dropped for a 12th month in a row, down 30.5% from a year earlier to 11,348 units in April, according to a Kyodo News report on the data.
And many companies have been hurt by the strength in the Japanese yen.
Honda, for example, cited the recently strong yen as a major reason for the 77% drop in its fiscal year income.
In Asian trade Monday, one U.S. dollar bought 98.37 yen, down from 98.93 yen on Friday.
But despite the sales and currency headwinds, Wall Street Strategies' Silver is still bullish, reiterating his recommendation to buy Toyota stock regardless of the expected loss for the current fiscal year.
"We feel the company is best positioned to capitalize on the eventual rebound in auto sales," he said.
And "the fact remains that despite the steep drop, General Motors and Toyota are still No. 1 and No. 2 in the market," he said.
He also noted weakness in Toyota's U.S. competitors.
With "bankruptcy rumors circling around General Motors, and the [bankruptcy] filing by Chrysler, the American marketplace is wide open for another player to try to enter," he said.
Chrysler LLC fell into bankruptcy in late April and last week said it expects billions of dollars in losses in the coming years.
On Thursday, U.S.-based General Motors Corp. (GM) said it lost $6 billion as revenue was cut almost in half.
Growth In Korea Money Supply Slows For 3rd Straight Mo In Mar
SEOUL -(Dow Jones)- Growth in South Korea's broadest measure of money supply slowed for a third straight month in March as the pace of rise in loans to companies and households eased, Bank of Korea data issued Monday showed.
The measure, known as L money supply, rose a preliminary 10.6% from a year earlier to KRW2,340.9 trillion ($1.892 trillion), compared with the previous month's gain of 10.8% and a 10.9% rise in January.
L money supply includes cash, deposits at financial institutions and money- market instruments.
"Money supply keeps growing, but at a slower pace as growth in credit loans to companies and households has eased," the central bank said in a statement.
The data come ahead of a rate review Tuesday, when the central bank is expected to keep its benchmark interest rate unchanged at an all-time low of 2.00% for a third straight month amid some signs showing that the economy is improving.
Growth of a sub-indicator, M2, slowed for a 10th straight month, rising 11.1% to KRW1,470.4 trillion in March, after increasing 11.4% in February.
M2 consists of cash in circulation and deposits with maturities of less than two years at banks and non-bank financial institutions, excluding those at insurance and securities companies.
In a separate statement, the BOK said that funding conditions of local corporations improved further in April, helped by the BOK's easing stance in recent months, an increase in the issuance of corporate bonds and expanded bank loans to smaller firms.
The BOK said lending by South Korean banks to businesses rose by KRW3.2 trillion to KRW472.4 trillion in April, a bigger rise than a KRW2.1 trillion increase recorded in March.
Loans to households also rose in April, by KRW1.1 trillion to KRW392.7 trillion, the central bank said.
The measure, known as L money supply, rose a preliminary 10.6% from a year earlier to KRW2,340.9 trillion ($1.892 trillion), compared with the previous month's gain of 10.8% and a 10.9% rise in January.
L money supply includes cash, deposits at financial institutions and money- market instruments.
"Money supply keeps growing, but at a slower pace as growth in credit loans to companies and households has eased," the central bank said in a statement.
The data come ahead of a rate review Tuesday, when the central bank is expected to keep its benchmark interest rate unchanged at an all-time low of 2.00% for a third straight month amid some signs showing that the economy is improving.
Growth of a sub-indicator, M2, slowed for a 10th straight month, rising 11.1% to KRW1,470.4 trillion in March, after increasing 11.4% in February.
M2 consists of cash in circulation and deposits with maturities of less than two years at banks and non-bank financial institutions, excluding those at insurance and securities companies.
In a separate statement, the BOK said that funding conditions of local corporations improved further in April, helped by the BOK's easing stance in recent months, an increase in the issuance of corporate bonds and expanded bank loans to smaller firms.
The BOK said lending by South Korean banks to businesses rose by KRW3.2 trillion to KRW472.4 trillion in April, a bigger rise than a KRW2.1 trillion increase recorded in March.
Loans to households also rose in April, by KRW1.1 trillion to KRW392.7 trillion, the central bank said.
S Korea Securities Cos' FY2008 Net Profit Fall 54%
SEOUL -(Dow Jones)- The combined profit of 60 securities companies operating in South Korea fell 54% during the fiscal year 2008 ended March 31 due to a drop in brokerage commission as a result of the stock market slowdown, the Financial Supervisory Service said Monday.
Securities companies in South Korea posted a combined KRW2.04 trillion in net profit in 2008, compared with KRW4.41 trillion in the preceding year, the FSS said in a statement.
Return on equity of the brokerage firms fell to 6.7% in 2008 from 17.0%.
The net profit of 20 foreign-owned brokerage firms fell 30.1% to KRW711 billion, while that of locally owned companies fell 61% to KRW1.33 trillion, the FSS said.
The average net capital ratio of securities companies, a key measurement of financial health, was at 615.7% at the end of March, up from 591.2% a year earlier, and much higher than the 150% threshold recommended by the FSS.
Securities companies in South Korea posted a combined KRW2.04 trillion in net profit in 2008, compared with KRW4.41 trillion in the preceding year, the FSS said in a statement.
Return on equity of the brokerage firms fell to 6.7% in 2008 from 17.0%.
The net profit of 20 foreign-owned brokerage firms fell 30.1% to KRW711 billion, while that of locally owned companies fell 61% to KRW1.33 trillion, the FSS said.
The average net capital ratio of securities companies, a key measurement of financial health, was at 615.7% at the end of March, up from 591.2% a year earlier, and much higher than the 150% threshold recommended by the FSS.
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