Dubai faces gradual exodus of migrant workers

DUBAI: Construction worker Bilal is in a happy mood as he takes his lunch break sitting next to an artificial lake near Dubai’s showpiece Mall of the Emirates.

But he admits anxiety about the end of his contract in one year’s time, when the 24-year-old may have to return to Bangladesh.

The shock news of Dubai’s debt crisis is not expected to spark an immediate surge in redundancies in the once-booming desert metropolis, but a gradual exodus is likely as workers’ contracts expire and the lack of new projects means they are unable to find new jobs.

Before last year’s credit crunch, Dubai and the rest of the United Arab Emirates were estimated at the end of 2007 to have a population of 6.4 million people – of whom 5.5 million were foreigners.

More than three million were registered with the ministry of labour as workers, when Dubai was still racing to build enormous shopping centres and business districts.

But now the picture is very different. Even before state-owned Dubai World said last week that it wants to halt payments on its huge debts for at least six months, property prices were down by half and office rents by as much as two-thirds.

People from Asia, who form the majority of the construction workforce, may find their livelihoods at stake following the mothballing of hundreds of new building projects worth tens of billions of dollars.

Ferraris, Aston Martins and Maseratis are parked less than 100 metres away from where Bilal sits by the lake on Thursday, his blue safety helmet alongside him.

There is no indication anywhere nearby of the financial crisis swirling across the city.

‘No, I’m not worried’ about losing my job, he says. ‘I have worked here for two years, our company’s agreement is for three years.’

But he concedes that not knowing where he will work when his contract expires is a source of concern.

For Indian site engineer Thomas, unemployment is a already a reality.

He walked out of Thiruvananthapuram International airport in the southern Indian state of Kerala on Thursday, after 10 years in the Emirati city, with just two items of hand luggage and a bundle of clothes.

His contract had been terminated by his Dubai-based construction company after the project was hit by the economic crisis.

‘I was working as a site engineer in Dubai. I’ve no other choice than return to Kerala,’ 50-year-old Thomas told French news agency.

‘My flight was full of people returning. Sooner or later almost 80 per cent of the workers will have to leave Dubai.’

He said that during his time in Dubai, where many southern Indians found work, he had sent home enough money to build a house in his village and pay for his three sisters’ weddings.

‘What to do now?’ he said. ‘I don’t have a hefty bank balance or land to support my family. I may try my luck in Saudi Arabia or Muscat.’

‘Many companies in Dubai have not paid the workers for the last three months,’ Thomas said.

Foreign workers in the Gulf city state often face major challenges if they have to leave. A proportion have been allowed to bring in their families, which makes life easier but causes extra upheaval if the main breadwinner loses his or her job.

An even bigger proportion of Asian workers in the UAE send some of their wages as remittances to their families back home.

Dubai security guard Pradeep, 36, has connections in the transport industry in India and believes he can find a job there if he has to.

‘I can also return to my home country and work,’ he said.

But his salary working in the emirate is enough for him to support his family at home.

He first came to Dubai in 2003, then later returned to India to work before coming back to Dubai in early 2009.

‘Job is not secure, job is not secure,’ he said with a smile, slowly shaking his head. ‘The economy is very down.’ He added that, although this will not affect him immediately, it could cause him to lose his job in the future.

If this happens, Pradeep says he will leave Dubai once more.

Job security is ‘our main concern these days,’ said Jomy, a 35-year-old Indian working in Dubai as a contractor with a company that sells apples.

Jomy’s friend Jino, also Indian, describes the economic troubles as being ‘industry-specific,’ especially in the banking sector in which he works.

‘So many industries linked to it will have a chain reaction’ from banking to other sectors, he added.

The change in lifestyle can be dramatic when people have to return home.

Satheesh, a civil engineer, worked in the Gulf for 19 years, including the last two years in Dubai. Now he is back home in Kochi, Kerala.

‘I was getting 200,000 rupees a month in Dubai. But now I’m unemployed as my company asked me to go on long leave and now it has closed down the project. The management has shelved 450 Indian workers. It’s a bad time for me.’

Many unskilled foreign workers in Dubai, with no special knowledge about the crisis, are broadly worried and just hoping for the best.

But even those specialising in finance are fearful of the prospects for once-booming Dubai.

‘Of course I’m worried (the economic situation) is going to affect my bonuses by the end of the year, and there might be some job losses,’ said Sheraz, a Pakistani internal auditor working in Dubai for a major retail group.

‘There’s still a lot of uncertainty around. We don’t know what will happen next year,’ the 27-year-old said.

Hyatt begins trading on NY stock exchange

NEW YORK (AFP) – Leading US group Hyatt Hotels began trading on the stock exchange on Thursday, raising almost a billion dollars with its initial public offering, in the New York bourse's second largest flotation this year.In a massive show of confidence in the US and global economy as it recovers from the worst recession in decades, Hyatt said it was offering 38 million shares at 25 dollars each for a total of 950 million dollars.The Chicago-based group, which is owned 85 percent by the wealthy Pritzker family, became the 18th company to launch an IPO on the New York Stock Exchange this year."We are delighted at the success of our initial public offering and with our new partnership with the NYSE," said Mark Hoplamazian, chief executive officer of Hyatt Hotels Corporation, in a statement."Moving forward, our focus will continue to be providing authentic hospitality to our guests and driving preference for our brands."The Banco Santander, which listed on October 7, was the year's biggest flotation raising some seven billion dollars.Hyatt operates hotels in 45 countries.Its shares, trading under the symbol of "H," rose sharply in early morning trading and by 1545 GMT were up 7.72 percent to 26.93 dollars."Hyatt is a leading global brand and a welcome addition to our listed company family," said Duncan Niederauer, chief of NYSE Euronext."We look forward to a beneficial and lasting partnership with Hyatt and to providing the company and its shareholders with the highest levels of service and market quality."

Stock Markets2

A man walks by a screen showing stock prices at the London Stock Exchange in the City of London, Tuesday, Nov. 3, 2009. World stock markets mostly fell Tuesday amid renewed concerns about the banking sector after Britain's Royal Bank of Scotland PLC got more government help and Switzerland's UBS AG booked another massive charge

Stock Markets

File photo shows the New York Stock Exchange in the centre of the US city. The Federal Reserve is widely expected to hold interest rates near zero at a monetary policy meeting Wednesday, in a bid to nurture a fragile recovery from recession.

Stock Markets

File photo shows the New York Stock Exchange in the centre of the US city. The Federal Reserve is widely expected to hold interest rates near zero at a monetary policy meeting Wednesday, in a bid to nurture a fragile recovery from recession.

S&P 500, Nasdaq end higher on deal news

NEW YORK (Reuters) – The S&P 500 and Nasdaq rose slightly on Tuesday as news of a major railroad acquisition helped sentiment, but the Dow edged lower on caution before a Federal Reserve statement on interest rates and the economy.

Morgan Stanley's downgrade of semiconductor stocks also limited a broad advance.

The Dow Jones Transportation Average(.DJT) rose 5.3 percent as Warren Buffett's Berkshire Hathaway (BRKa.N) agreed to buy Burlington Northern Santa Fe Corp (BNI.N) in a deal that values the railroad company at $34 billion, Berkshire's biggest deal ever. Burlington shares jumped 27.5 percent to $97.

"One of the themes we've been pointing toward is that the next catalyst after earnings is M&A activity, and we've had some big ones," said Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC in Greenwich, Connecticut. "People consider companies to be cheap."

The Federal Open Market Committee began a two-day meeting on Tuesday. While investors expect the Fed to leave rates close to zero, they are nervous to hear what the officials say about the economic outlook.

The Dow Jones industrial average (.DJI) slipped 17.53 points, or 0.18 percent, to end at 9,771.91. But the Standard & Poor's 500 Index (.SPX) added 2.53 points, or 0.24 percent, to finish at 1,045.41. The Nasdaq Composite Index (.IXIC) advanced 8.12 points, or 0.40 percent, to close at 2,057.32.

The S&P is up 55 percent since its early March lows, partly because of stronger-than-expected economic data.

Semiconductors ranked among the major decliners after Morgan Stanley downgraded the sector to "cautious" from "attractive," and cut its view on Dow component Intel Corp (INTC.O), saying inventories were beginning to creep up in the sector.

The PHLX semiconductor index (.SOXX) lost 1.3 percent. [ID:nBNG421836] Shares of Intel slid 2.7 percent to $18.50 on Nasdaq.

Even so, the Nasdaq eked out a gain as investors searched for bargains among tech shares that have suffered losses recently. The Nasdaq has been down five of the past eight sessions.

In other deal news, Black & Decker Corp (BDK.N) shares jumped 31 percent to $62, a day after Stanley Works Inc (SWK.N) said it struck a deal to buy the company. Stanley shares rose 10.1 percent to $49.69.

Higher oil prices helped lift the S&P 500, with the S&P energy sector index (.GSPE) up 1.1 percent.

U.S. oil futures shot up $1.47, or 1.88 percent, to settle at $79.60 a barrel. ConocoPhillips' (COP.N) stock gained 1.5 percent to $50.75.

Shares of Black & Decker jumped 23.9 percent to $58.66, while shares of Stanley Works were up 4.8 percent at $47.30.

Data showed new orders received by U.S. factories rose more than expected in September but had little impact on the broader market.

Volume was below average on the New York Stock Exchange, with 1.38 billion shares changing hands, below last year's estimated daily average of 1.49 billion, while on the Nasdaq, about 2.18 billion shares traded, below last year's daily average of 2.28 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of 18 to 11, while advancing stocks beat decliners on the Nasdaq, by about 8 to 5.

(Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

Rising commodities, dealmaking lift stocks

NEW YORK – Investors sidestepped some of their doubts about the economy and bought energy and industrial stocks as commodity prices rose.

Stocks ended back-and-forth trading mostly higher Tuesday as a spike in the price of gold and corporate dealmaking extended an advance from Monday. The gains in commodity prices helped stocks pare early losses.

The Dow Jones industrial average slipped 17 points, while broader indexes rose modestly.

Investors were encouraged by billionaire investor Warren Buffett's decision to pay $34 billion for the railroad Burlington Northern Santa Fe in what he termed an "all-in wager" on the future of the U.S. economy. Meanwhile, tool maker Stanley Works struck a deal to acquire Black & Decker Corp. for $3.46 billion in stock.

Investors also took cues from commodities including gold, which jumped to a new high after India's central bank bought $6.7 billion worth of the metal from the International Monetary Fund.

Still, even with the gains in commodities, traders remained on edge about unemployment and the strength of an economic recovery.

Concerns about unemployment grew after health care products maker Johnson & Johnson said it would cut up to 7 percent of its global work force and streamline its business structure to save up to $900 million next year. Investors worry high unemployment will make it hard for the economy to sustain recent growth.

Financial stocks fell after the British government injected more money into Royal Bank of Scotland PLC and Lloyds Group PLC. That fanned worries about the troubles with bad debt still facing many banks.

Traders have been uneasy in recent weeks, wary about whether the economic recovery can maintain its third-quarter growth once government stimulus measures are removed. The Commerce Department said last week the economy grew at an annual rate of 3.5 percent during the summer.

The uncertainty about the economy has led to swings in the market. The Dow has risen or fallen more than 100 points in six of the last eight trading days, the most volatility since March.

Analysts said a break in the advance could ease worries that the market has advanced too quickly.

"This is a much-needed healthy pause and reassessment. It ran so far," said David Darst, chief investment strategist for Morgan Stanley Smith Barney in New York.

The Dow fell 17.53, or 0.2 percent, to 9,771.91, after being down as much as 86 points. The Dow rose 77 points Monday following reports of improvements in manufacturing and housing.

The broader Standard & Poor's 500 index rose 2.53, or 0.2 percent, to 1,045.41. The index is up 54.5 percent from a 12-year low in early March.

The Nasdaq composite index rose 8.12, or 0.4 percent, to 2,057.32.

"We're seeing a natural ebb and flow of risk appetite," said Kevin Gardiner, head of investment strategy for Europe, Middle East and Africa at Barclays Wealth.

Analysts expect trading to be choppy this week, as investors digest a frenzy economic reports. Investors are watching the Federal Reserve, which concludes a two-day meeting Wednesday, for any clues about the economy and the direction of interest rates.

Investors also looked past increases in automobile sales. Ford Motor Co. said sales rose 3 percent from October last year, while General Motors Corp.'s sales rose 4.7 percent. It was the first monthly sales increase for the nation's largest automaker since January 2008. Meanwhile, Chrysler's sales fell 30 percent, though they improved from September.

Bond prices fell as stocks rose, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.47 percent from 3.42 percent late Monday.

The dollar was mixed against other major currencies.

Crude oil rose $1.47 to settle at $79.60 a barrel on the New York Mercantile Exchange, while gold surged to a new high of $1,087 an ounce.

Shares of Burlington Northern jumped $20.93, or 27.5 percent, to $97 after the move by Buffett's Berkshire Hathaway Inc., which already owns about 22 percent of Burlington.

That pulled other railroads higher. CSX Corp. rose $3.13, or 7.3 percent, to $45.97, while Norfolk Southern Corp. advanced $2.52, or 5.4 percent, to $49.15.

Black & Decker jumped $14.66, or 31 percent, to $62, while Stanley Works rose $4.54, or 10.1 percent, to $49.69.

Johnson & Johnson fell 56 cents, or 0.9 percent, to $58.93.

Royal Bank of Scotland fell 69 cents, or 5.5 percent, to $11.96, while Lloyds rose 28 cents, or 5.2 percent, to $5.72.

The Russell 2000 index of smaller companies rose 8.22, or 1.5 percent, to 570.62.

Three stocks rose for every two that fell on the New York Stock Exchange, where consolidated volume came to 5.5 billion shares, compared with 6.3 billion Monday.

Overseas, Britain's FTSE 100 fell 1.3 percent, Germany's DAX index fell 1.4 percent, and France's CAC-40 dropped 1.5 percent. Markets in Japan were closed for a holiday.

China's small-company stock market starts trading

HONG KONG – A new Chinese stock exchange meant to nurture small and high-tech enterprises, modeled on the U.S.-based Nasdaq market, started trading Friday and all 28 listed companies soared in price.

Chengdu Geeya Technology Co., a digital equipment provider, vaulted 210 percent to 35 yuan on the ChiNext exchange in the southern city of Shenzhen. Film studio Huayi Bros. Media Corp. rose 148 percent, while other companies gained by at least 75 percent.

The new board is intended to help smaller Chinese companies in a financial system that has long favored big, state-owned companies. Geeya Technology and most of the other companies on the new exchange are privately owned, while China's main exchanges in Shanghai and Shenzhen are dominated by government enterprises.

The communist government has talked for more than a decade about creating a Nasdaq-style market to promote technology and other new industries, but its launch was repeatedly delayed.

Beijing hopes the new exchange will "channel resources into competitive emerging industries to nurture new economic growth," the chairman of the China Securities Regulatory Commission, Shang Fulin, said last week.

Six companies on ChiNext are in biotech or pharmaceuticals and others are in information technology, energy efficiency, telecoms, medical equipment, entertainment and electronics.

The exchange "will help to upgrade industries, serving as a window for the world to know more about the Chinese economy," said Peng Yunliang, an analyst for Shanghai Securities.

The size of share offerings on ChiNext was small compared with the multibillion-dollar initial public offerings on the main boards in Shanghai and Shenzhen, but analysts said investors would welcome the new opportunities.

Some investors worried ahead of ChiNext's launch that the flood of new shares might depress other stock prices as money moved to the exchange. But the benchmark Shanghai Composite Index closed up 1.2 percent.

Stocks retreat as worries mount about spending

NEW YORK – Evidence that consumers are still holding off on spending drove stocks sharply lower Friday, tempering enthusiasm from the day before over the economy's growth in the third quarter.

Major stock indexes fell about 1.5 percent in midday trading, including the Dow Jones industrials, which tumbled about 150 points, giving back a chunk of the previous day's 200-point gain.

Investors shed stocks after the Labor Department said personal spending fell 0.5 percent in September. Though the decline was in line with forecasts, it was the largest drop in nine months and followed a 1.3 percent jump in August fueled by the government's popular Cash for Clunkers car rebate program.

A drop in the mood of consumers was also discouraging. The Reuters/University of Michigan consumer sentiment index fell to 70.6 in October from 73.5 in September. The reading was revised slightly higher from a preliminary estimate of 69.4 earlier this month, and was roughly in line with expectations.

The market is paying close attention to indicators of consumer spending, which is still in a slump despite improvements in other parts of the economy such as manufacturing and housing. Spending by consumers makes up a major part of the U.S. economy.

The day's news fanned fears that weak spending by consumers will continue to hold the economy back and put a damper on the market's excitement over a 3.5 percent jump in gross domestic product in the third quarter.

The stronger-than-expected GDP growth came after four straight quarters of declines and was the most promising evidence yet that the longest recession since the 1930s has ended. Stocks soared following the report, giving the Dow its best one-day performance since July.

But many economists worry that much of that growth came from government stimulus measures and that without a rebound in consumer spending the economic recovery won't be sustainable.

The Labor Department also reported Friday that personal income, the fuel for future spending, was flat in September compared with the previous month, in line with expectations. A lack of income growth is due, in part, to ongoing high unemployment rates, also a major worry for the market.

"Until we get to better employment numbers, it's hard to get real income growth and real spending ... and we're just not there yet," said Kurt Karl, chief US economist at Swiss Re. "Today is a reaction to a little bit of excess exuberance yesterday."

The Dow fell 153.57, or 1.5 percent, to 9,809.01. The Standard & Poor's 500 index fell 17.86, or 1.7 percent, to 1,048.25, and the Nasdaq composite index lost 31.46, or 1.5 percent, to 2,066.09.

Stocks have fallen for most of the past week on worries about the economy. A stronger dollar, which hurts commodities prices, has also weighed on the market.

The dollar rose again Friday, sending commodity prices lower. On the New York Mercantile Exchange, gold prices slipped about $6 to $1,040 an ounce, while oil prices tumbled $1.52 to $78.35 a barrel.

Bond prices rose as stocks fell. The yield on the benchmark 10-year Treasury note fell to 3.43 percent from 3.50 percent late Thursday.

Friday marks the end of the fiscal year for many mutual funds, which could be adding to the selling pressure in the market. Fund managers looking to minimize taxes for shareholders often sell some of their investments as the fiscal year comes to a close.

Analysts say trading is likely to remain volatile in the coming week amid a flood of major economic news, including the Institute of Supply Management's readings on the manufacturing and services industries, sales reports from major retailers and the Labor Department's October employment report — arguably the month's most important piece of economic data. The Federal Reserve will also convene for a two-day policy meeting beginning Tuesday.

Without stronger evidence that the labor market is improving and consumers are feeling more comfortable about spending, investors will have trouble extending the market's massive rally into a ninth month. Even with this week's declines, the S&P 500 index is up about 55 percent since hitting a 12-year low in early March.

More than three stocks fell for every one that rose on the New York Stock Exchange, where volume came to 416.7 million shares, compared with 604.1 million at the same time a day earlier.

In other trading, the Russell 2000 index of smaller companies fell 10.78, or 1.9 percent, to 569.44.

Overseas, Japan's Nikkei stock average rose 1.5 percent. In afternoon trading, Britain's FTSE 100 fell 1.6 percent, Germany's DAX index dropped 2.8 percent, and France's CAC-40 declined 2.7 percent.

Stocks turn lower as rising dollar hits oil prices

NEW YORK – Stocks gave up early gains Monday as a rising dollar stalled a rally in commodities.

Oil and other commodities had risen in early trading, pushing up shares of energy and materials companies, but by midmorning those gains were gone as the dollar turned higher against other currencies.

Changes in the dollar frequently push commodity prices up or down, since a higher dollar makes oil and other basic materials, which are priced in dollars, more expensive to non-U.S. investors.

The Dow Jones industrial average swung in a 200-point range, surrendering an early advance for a loss of about 100 points by late morning. Oil fell $1.16 to $79.34 per barrel on the New York Mercantile Exchange, having given up earlier gains.

Technology shares fared somewhat better than other parts of the market after Marvell Technology Group Ltd., which makes chips used in phone networks, raised its fiscal third-quarter revenue forecast. That helped the technology-focused Nasdaq composite index limit its losses.

RadioShack Corp.'s third-quarter sales topped expectations, giving a boost to retailers.

Richard Ross, global technical strategist at Auerbach Grayson in New York, said the direction of the dollar as well as volatility continues to drive trading.

"You're seeing this sort of waltz between the dollar and volatility and stocks," he said.

In midday trading, the Dow fell 120.62, or 1.2 percent, to 9,851.56. The index had been up 100 points in early trading.

The broader Standard & Poor's 500 index fell 13.29, or 1.2 percent, to 1,066.31, while the Nasdaq fell 17.11, or 0.8 percent, to 2,137.36.

More than two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 548.9 million shares compared with 496.4 million shares traded at the same point Friday.

The Dow fell 0.2 percent last week, while the S&P 500 index fell 0.7 percent.

Bond prices slipped as the government prepared to auction more than $120 billion in debt this week. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.52 percent from 3.49 percent late Friday.

The dollar rose against most other major currencies, while gold fell.

Traders looked to another busy week of earnings reports. Investors will look for clues about a possible pickup in consumer spending when companies including Kellogg Co., Procter & Gamble Co. and Visa Inc. report earnings.

The energy and insurance industries also will be in focus throughout the week with ConocoPhillips and Exxon Mobil Corp. as well as Aetna Inc. and MetLife Inc. scheduled to release quarterly results.

Among companies reporting earnings, Marvell rose 33 cents, or 2.3 percent, to $14.91, while RadioShack rose $2.15, or 13.7 percent, to $17.81.

The Russell 2000 index of smaller companies fell 5.12, or 0.9 percent, to 595.74.

Overseas markets turned lower as U.S. stocks dropped. In afternoon trading, Britain's FTSE 100 fell 0.6 percent, Germany's DAX index fell 1.1 percent, and France's CAC-40 fell 1.2 percent. Japan's Nikkei stock average rose 0.8 percent.

Wall Street eyes new catalyst as earnings rally fades

NEW YORK (AFP) – The earnings-driven rally of the past few weeks appears to have run out of steam on Wall Street, leaving the market in search of a new catalyst heading into the final stretch of 2009.

The main stock indexes remain near 12-month highs, but gains have been harder to achieve following the sizzling move since March of some 60 percent for the broad market.

Wall Street has been pleasantly surprised by the strength of third-quarter corporate earnings. Analysts, though, say their ability to spark fresh gains appears to be diminished.

The Dow Jones Industrial Average lost 0.24 percent for the week to end at 9,972.18, as it hovered around the 10,000 level topped a week earlier.

The Standard & Poor's 500 broad-market index shed 0.74 percent to 1,079.60 and the technology-rich Nasdaq composite drifted down 0.11 percent on the week to 2,154.47.

Over the past week, the market warmed to earnings from Apple, Microsoft and Yahoo! in the tech sector, as well as Morgan Stanley and Wells Fargo in banking, but they only gave a temporary boost to stocks.

"The earnings have been tremendous, not just beating estimates but blowing away estimates. That's been the catalyst for holding the market together," said Marc Pado at Cantor Fitzgerald.

But he said that because many had already anticipated a strong season, "we see selling on the news."

In the coming week, investors will see more quarterly results and economic data including gross domestic product (GDP) for the third quarter, expected to show the economy expanded after four consecutive declines.

Douglas McIntyre at 24/7 Wall Street says he believes the rally has strong momentum and can carry further despite some skepticism.

"Each week most market experts say that the Dow cannot go any higher," he said.

"Earnings are not good enough. The economy is not strong enough. Unemployment is too high and so is the federal deficit. None of that has kept the market from its persistent climb."

He said there is room to rise further in view of the fact that the Dow index is still well below its all-time high over 14,000 in October 2007.

"The Dow is not going back to 14,000 next year, but there are several arguments that it could rise much more between now and the middle of 2010," he said.

Even if some earnings disappoint, McIntyre said, "they are not going to be shocking enough to knock the market off its present course."

Gregory Drahuschak at Janney Montgomery Scott said the market is now looking further ahead at the potential for a slowdown in activity as the impact of government stimulus fades.

"As we approach 2010 the market increasingly will look not at potential fourth quarter GDP or earnings but rather what both will be like by the middle of next year," he said.

Al Goldman at Wells Fargo Advisors said the sharp swings of the market over the past months are a reflection of the shifts in investor sentiment.

"What we have witnessed the past seven months is classic market action," he said.

"Most folks just can't buy stocks when they are fearful but they do buy after a big rally when they are feeling good."

In view of the strong rally this year, he said a pause is needed.

"For the short term, we believe the market has entered a correction that will take the popular averages down about five percent," he said.

"If things heat up further in Iran and oil leaps up in price, a 10-percent correction is likely. Last week we advised adding some caution to our optimism and assumed better buying opportunities lie ahead before a higher market by year-end. That remains our opinion."

Bonds failed to benefit from stock market weakness. The yield on the 10-year Treasury bond rose to 3.475 percent from 3.417 percent a week earlier and that on the 30-year bond climbed to 4.289 percent from 4.247 percent. Bond yields and prices move in opposite directions.

In the coming week, the market reacts to data on consumer confidence, durable goods orders and new home sales as well as Thursday's key report on GDP.

Earnings news will be dominated by oil giants ExxonMobil and Chevron, with reports also coming from International Paper and Colgate-Palmolive.

PSO,

PSO, PEPCO sign fuel supply agreement

KARACHI: Pakistan State Oil (PSO) and Northern Power Generation Company Limited (NPGCL), a subsidiary company of the Pakistan Electric Power Company (Private) Limited (PEPCO), have signed a fuel supply agreement (FSA) for fulfilling furnace oil and HSD requirements of all the power stations of NPGCL. According to PSO here on Wednesday, the deal was signed in Lahore,

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ICB Global Classification System Adopted By Karachi Stock Exchange

The Industry Classification Benchmark (ICB), a jointly developed classification system launched by FTSE Group and Dow Jones Indexes, has been adopted by the Karachi Stock Exchange (KSE) to classify and analyse specific sectors of the Pakistan stock market using internationally accepted standards. The Industry Classification Benchmark provides a comprehensive system with four levels of granularity – industry (10), supersectors (19), sectors (41) and subsectors (114) and facilitates cross-border company comparison.

ICB will replace KSE’s own classification system after a transition period in which KSE will run both classification systems parallel to allow a smooth adoption process.

ICB is the standard used by major stock exchanges, data distributors, index providers, buy side and sell side institutions, custodians and media organizations globally. KSE joins other exchanges and global financial institutions which have integrated ICB into their research, trading and investment workflows. These include NASDAQ, NYSE/Euronext, the London Stock Exchange, the Swiss Exchange, Aegon, the International Monetary Fund and the World Economic Forum, as well as media outlets including The Wall Street Journal, the Financial Times, CNBC and Dow Jones Newswires.

James Cemprola, Managing Director of ICB commented, “By adopting well-established global standards like ICB, upcoming financial markets can strengthen their transparency, comparability and hence draw the attention of international market participants. The Industry Classification Benchmark is a relevant, clear, strictly rules-based and accurate system which is designed to meet the needs of sophisticated investors. We are pleased that financial institutions in emerging Asia such as the Karachi Stock Exchange are choosing ICB to assist them in bringing their services in line with practices of the global investment community.”

More information about ICB is available at www.icbenchmark.com. link..