bhutto assassination hits economy, markets
Saturday, 29 December 2007
Killing worries Pak investors, mkts
LONDON, Dec 28 (Reuters): Benazir Bhutto's killing will boost perceived risk in nuclear-armed Pakistan, analysts warned yesterday, but some said it was not in itself surprising enough to substantially change investor sentiment.
News of her assassination in a suicide gun and bomb attack outside a political rally in the garrison city of Rawalpindi sent global gold and oil prices higher, also unsettling global foreign exchange markets.
Credit ratings agency Standard & Poor's said Pakistan's sovereign foreign currency rating of B+ could be lowered if the assassination was followed by instability, making it more difficult for the country to borrow money in global markets.
Pakistani five-year credit default swaps, used to insure against restructuring or defaulting debt, widened by around 100 basis points on the news, implying traders felt the country's debt was higher risk.
The attack took place after the Pakistani stock market closed for the day and with little trade reported on the Pakistani rupee PKR . Both were seen potentially falling on Friday.
Pakistani forecasts growth of 7.2 percent in the year to June 2008, with the country classed by some as one of a new breed of lesser-developed "frontier markets" offering better returns than mainstream emerging markets such as Eastern Europe.
But some investors were already starting to worry after President Pervez Musharraf's Nov 3 declaration of emergency rule and another suicide attack on Bhutto on her return to the country killed at least 139.
The news would put off any immediate investment deals in Pakistan, she said, but most serious investors would already have been awaiting the outcome of the election scheduled for January -- which some now expect to be postponed.
Oil prices near $97 on Bhutto killing
LONDON(Internet): World oil prices held near 97 US dollars per barrel Friday as traders mulled the murder of Pakistani opposition leader Benazir Bhutto, alongside another steep drop in US crude reserves.
New York's main contract, light sweet crude for February, won 10 cents to 96.72 US dollars per barrel on Friday.
On Thursday, the contract struck a one-month high of 97.79 US dollars-which was just 1.50 US dollars away from the record 99.29 US dollars hit on November 21.
In London on Friday, Brent North Sea crude for February delivery added a marginal three cents to 94.81 US dollars.
"Yesterday, oil pushed back up towards the all time highs on the back of a bullish weekly US fuel report and as further geopolitical risk premium was added to prices following the assassination of Pakistani opposition leader Benazir Bhutto," said Sucden analyst Nimit Khamar in London.
Friday trade was "fairly flat," with support stemming from "geopolitical and stock news," he added.
Dealers said Bhutto's killing on Thursday, which plunged the nation into crisis and sparked global condemnation and concern, would have a psychological impact on the market even though the country is not an oil producer.
Stocks shaken by killing
SINGAPORE, Dec 28 (Reuters): Asian stocks fell on Friday as news of the assassination of Pakistani oppositionleader Benazir Bhutto and fears over regional political turmoil triggered a flight to less risky assets such as government bonds and gold.
European stock markets were expected to open lower, with Britain's FTSE, Germany's DAX and France's CAC seen down around 0.5 percent.
Concerns over instability in Pakistan, which prompted credit agency Standard & Poor's to caution on the negative outlook for its sovereign debt ratings, prompted investors to dump the dollar and buy the yen in an unwinding of the carry trade, in which traders borrow lower-yielding currencies to buy higher-yielding ones.
The dollar fell as low as 112.97 by 0648 GMT, while the Australian dollar fell to 98.74 yen and the euro dropped 0.6 percent to 165.20 yen
The news of Bhutto's assassination dampened appetite for risk, which had already been hit by US economic reports showing a weaker-than-forecast rise in US durable goods orders and an unexpected rise in jobless claims.
The combination of the weak data and the Bhutto news sent Japan's benchmark Nikkei average down 1.7 percent in a shortened final session for 2007.
The index fell more than 11 percent, the first annual decline in five years and heading to be the world's worst-performing major stock market in 2007.
LONDON, Dec 28 (Reuters): Benazir Bhutto's killing will boost perceived risk in nuclear-armed Pakistan, analysts warned yesterday, but some said it was not in itself surprising enough to substantially change investor sentiment.
News of her assassination in a suicide gun and bomb attack outside a political rally in the garrison city of Rawalpindi sent global gold and oil prices higher, also unsettling global foreign exchange markets.
Credit ratings agency Standard & Poor's said Pakistan's sovereign foreign currency rating of B+ could be lowered if the assassination was followed by instability, making it more difficult for the country to borrow money in global markets.
Pakistani five-year credit default swaps, used to insure against restructuring or defaulting debt, widened by around 100 basis points on the news, implying traders felt the country's debt was higher risk.
The attack took place after the Pakistani stock market closed for the day and with little trade reported on the Pakistani rupee PKR . Both were seen potentially falling on Friday.
Pakistani forecasts growth of 7.2 percent in the year to June 2008, with the country classed by some as one of a new breed of lesser-developed "frontier markets" offering better returns than mainstream emerging markets such as Eastern Europe.
But some investors were already starting to worry after President Pervez Musharraf's Nov 3 declaration of emergency rule and another suicide attack on Bhutto on her return to the country killed at least 139.
The news would put off any immediate investment deals in Pakistan, she said, but most serious investors would already have been awaiting the outcome of the election scheduled for January -- which some now expect to be postponed.
Oil prices near $97 on Bhutto killing
LONDON(Internet): World oil prices held near 97 US dollars per barrel Friday as traders mulled the murder of Pakistani opposition leader Benazir Bhutto, alongside another steep drop in US crude reserves.
New York's main contract, light sweet crude for February, won 10 cents to 96.72 US dollars per barrel on Friday.
On Thursday, the contract struck a one-month high of 97.79 US dollars-which was just 1.50 US dollars away from the record 99.29 US dollars hit on November 21.
In London on Friday, Brent North Sea crude for February delivery added a marginal three cents to 94.81 US dollars.
"Yesterday, oil pushed back up towards the all time highs on the back of a bullish weekly US fuel report and as further geopolitical risk premium was added to prices following the assassination of Pakistani opposition leader Benazir Bhutto," said Sucden analyst Nimit Khamar in London.
Friday trade was "fairly flat," with support stemming from "geopolitical and stock news," he added.
Dealers said Bhutto's killing on Thursday, which plunged the nation into crisis and sparked global condemnation and concern, would have a psychological impact on the market even though the country is not an oil producer.
Stocks shaken by killing
SINGAPORE, Dec 28 (Reuters): Asian stocks fell on Friday as news of the assassination of Pakistani oppositionleader Benazir Bhutto and fears over regional political turmoil triggered a flight to less risky assets such as government bonds and gold.
European stock markets were expected to open lower, with Britain's FTSE, Germany's DAX and France's CAC seen down around 0.5 percent.
Concerns over instability in Pakistan, which prompted credit agency Standard & Poor's to caution on the negative outlook for its sovereign debt ratings, prompted investors to dump the dollar and buy the yen in an unwinding of the carry trade, in which traders borrow lower-yielding currencies to buy higher-yielding ones.
The dollar fell as low as 112.97 by 0648 GMT, while the Australian dollar fell to 98.74 yen and the euro dropped 0.6 percent to 165.20 yen
The news of Bhutto's assassination dampened appetite for risk, which had already been hit by US economic reports showing a weaker-than-forecast rise in US durable goods orders and an unexpected rise in jobless claims.
The combination of the weak data and the Bhutto news sent Japan's benchmark Nikkei average down 1.7 percent in a shortened final session for 2007.
The index fell more than 11 percent, the first annual decline in five years and heading to be the world's worst-performing major stock market in 2007.