Pakistan stocks up after UAE announces $3 billion loan

Pakistan Stock Exchange (PSX) building in Islamabad, Pakistan. The Pakistan stock market recovered more than 400 points at the close of the weekend session, after UAE announced that it would deposit $3 billion in Pakistan’s central bank, Islamabad, on Dec. 3, 2018. (REUTERS)
Updated 22 December 2018

Pakistan stocks up after UAE announces $3 billion loan

  • Market recovers more than 400 points at close of weekend session
  • Pressure in currency market eases

KARACHI: The Pakistan stock market recovered more than 400 points at the close of the weekend session, energized by the announcement on Friday by the UAE that it would deposit $3 billion in Pakistan’s central bank "in the next few days" to support the country's monetary policy. 
On Friday,  UAE’s state news agency WAM reported that the Abu Dhabi Fund for Development would deposit the amount in the “coming days to enhance liquidity and monetary reserves of foreign currency” of Pakistan.
In October, Saudi Arabia said it would loan Pakistan $6 billion and staunch ally China has also pledged to help but not announced the size of any assistance package.  Islamabad is also engaged in bailout talks with the International Monetary Fund.

“Stocks closed flat amid higher trades on late session recovery after the UAE announcement to deposit $3 billion to support monetary imbalances and improve foreign exchange reserves," equity analyst Ahsan Mehanti said. "Investor concerns, foreign outflows and uncertainty in global equities invited mid session pressure."
The benchmark KSE 100 Index closed the weekend session at 38,251 points with a gain of 15 points.  Volumes declined slightly from 136.7 million shares to 130.3 million but trade value increased by 29 percent to reach $48.3million.
“The market oscillated between +251 points and -391 points that included first session ending in red," said Misha Zahid, an equity analyst at Arif Habib Limited said. "However, the start of second session saw robust buying activity on the back of news that UAE is contributing $3 billion to Pakistan."
On a weekly basis the market remained range bound and ended down by 0.87 percent. 
“It was a dull week for the benchmark index, where negative sentiments persisted," said Nabeel Khursheed, a stock market analyst at Topline Securities. "Investors preferred to remain on the back foot due to the bleak economic outlook and expected poor corporate earnings for the coming year. Even the announcement by the UAE towards end of the week to deposit $3 billion SBP, was unable to alter dreary outlook."
But UAE’s announcement eased some pressure in the currency market. 
“At the time of dwindling foreign exchange reserves and increasing trade deficit the news has been taken by the market as a very positive gesture,” said Malik Bostan, the President of the Forex Association of Pakistan. 
He said following the news, the Pakistani rupee strengthened by one rupee against the US dollar in the open market to 139.77 rupees as compared to the previous day’s closing.
Economists believe the inflow from the UAE will have a "partially positive" impact on the economic situation of the country.
“This will have a positive impact on reserves; our balance of payment deficit will decline by $3 billion but this is not going to last long," said economist Dr. Bilal Ahmed. "For long term sustainability, the government will have to create another positive action."

Case against Ghosn excuse to get him out of Nissan, claim lawyers

Updated 13 November 2019

Case against Ghosn excuse to get him out of Nissan, claim lawyers

  • The former motor giant chief’s legal team has alleged that both his arrest and the prosecution efforts have been illegal

TOKYO: The drama surrounding the arrest of Carlos Ghosn, former boss of motor giants Nissan and Renault, has yet to reach its climax. Yet the plot continues to thicken with each new development.

On Monday, Ghosn’s defense lawyers unveiled court submissions highlighting the circumstances in which the 65-year-old executive was arrested and subsequently held in detention.

“We believe that Mr. Carlos Ghosn is innocent. We believe that the arrest and the prosecution efforts thus far are illegal and therefore Mr. Ghosn should be immediately released,” the head of his defense team, Junichiro Hironaka, said during a press conference at the Foreign Correspondents Club of Japan in Tokyo on Monday.

Hironaka claimed that Nissan wanted to kick out Carlos Ghosn from the company and therefore put together a team dedicated to searching around for something that would justify them to do that.

“This prosecution motion wasn’t initiated because the prosecution side believed that Mr. Ghosn had committed an illegal act. Fundamentally there is a problem with this being treated as a criminal act,” he said.

Hironaka further said that the prosecutor’s office is supposed to be acting in the public good for everyone and not behalf of a specific corporation.

“From the investigation level, there were various problems and mistakes with this case. Furthermore, the Japanese persecution office can’t reach overseas so they rely on Nissan employees to go into Mr. Ghosn’s offices and residences and removed objects illegally,” he said.

Hironaka said there is no evidence to support the alleged wrongdoing claim that Nissan made payments to SBA in Oman, and Ghosn re-directed that money to himself or his family.

“The amounts that were paid by Nissan matched exactly the amounts due to SBA,” he said.

The lawyer had a similar response to the reports connecting some donations by Ghosn to a school in Lebanon that would somehow benefit himself. “There is absolutely no evidence or factual basis for indicating that,” Hironaka said.

He said that his team is trying to access correct information and find out what evidence the prosecution might have.

“I have made an effort to share information with the media, including the foreign media, during this whole pre-trial motion,” he said.

Under the Japanese system, the prosecutors are not required to disclose all the evidence at their disposal. Japanese law requires that prosecutors must disclose anything related to any evidence related to the specific filings they make.

They must also disclose any evidence that is related to the filings that are made by the defense counsel. However, there is no requirement for them to disclose evidence from other parts.

Ghosn was arrested at Tokyo’s Haneda Airport on Nov. 19, 2018, on multiple charges related to his stewardship of the two companies.

The cases involved not only Nissan-Renault and Japan’s Mitsubishi Motors (part of the Franco-Japanese alliance), but also the Japanese and French governments along with various key players from Asia and the Middle East.

Nissan was on the brink of bankruptcy in March 1999, with about 2 trillion yen ($17.6 billion) in interest-bearing debt.

This is when it entered a capital partnership with major French automaker Renault SA. Ghosn has been credited for turning the company around dramatically since then.

However, fears that the high-profile CEO and chairman was planning to merge Nissan into a much larger multinational motor alliance appeared to have fueled speculation regarding the future of the company.

It was reportedly argued within Prime Minister Shinzo Abe’s government that the automaker would no longer be recognizably Japanese.

The case has larger ramifications and the two governments have routinely become involved in discussions related to its future.

According to news reports, when Macron and Abe met in Buenos Aires, the French president asked that the Franco-Japanese alliance be maintained.

On being asked by Arab News Japan about reports of a prosecution team visiting Saudi Arabia and Oman, Hironaka confirmed that the visit indeed took place after Ghosn’s arrest.

“However, we have not been given any access to any information that they may or may not have gathered there,” he said.