Wednesday, May 2, 2012

US Technical Analyst Bullish on Pakistan

Elliot Wave theorist Mark Galasiewski is forecasting continuation of multi-year bull market in Pakistan. This forecasts marks an unusual agreement of  a technical analyst with fundamental research done by  Jim O'Neill of Goldman Sachs who recently  reiterated Pakistan's place on its growth map

 The Elliott Wave Theory, formulated in 1939 by Ralph Nelson Elliot,  is the basis of technical analysis that some traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors.

Here are some excepts of a recent interview of Elliot Theorist Mark Galasiewski on what he calls the "Indian Ocean Renaissance":

".... there are various ways to make long-term investment decisions. For example, Warren Buffett has shown that picking individual stocks can provide good returns over time. But it's a very labor-intensive and time-consuming process, to research companies thoroughly enough to have the kind of conviction that he does. And his “buy and hold” strategy means that he suffers significant drawdowns in his portfolio at times -- like during the 2007-2009 crash.

Elliott wave analysis gives you the opportunity to make long-term bets with a similar conviction -- but with a fraction of the elbow grease. Instead of pouring over hundreds of quarterly reports and legal documents, you look for Elliott wave patterns in the charts of market indexes. Those patterns reflect investors' collective bias, bullish or bearish. (I won't go into details of why this is so; our Club EWI has tons of free reports explaining the mechanics of the Elliott Wave Principle.)

So, knowing what part of the Elliott wave pattern your market is in, you know how the pattern should progress from there, ideally. And that gives you a probabilistic forecast for the trend. It doesn't work 100% of the time (what does), but our subscribers remember more than one successful forecast we've made using Elliott waves.

For example, on March 23, 2009 -- at the time when almost no one felt bullish -- we issued a special report to our subscribers forecasting a multi-year bull market in Indian stocks. Two weeks later, we identified three more markets in the region -- Pakistan, Sri Lanka, and Indonesia -- that we believed were also likely to enjoy an "Indian Ocean Renaissance."

India, Pakistan, Sri Lanka, Indonesia have all since generated some of the best returns among global stock markets. Without knowledge of the Elliott Wave Principle, it would have been difficult to forecast the boom -- especially given the dismal news events at the time. Do you remember the headlines in early 2009?

The world was engulfed by the global financial crisis, and most people believed the worst was still ahead. The currencies of India, Pakistan, Sri Lanka, and Indonesia had collapsed. Pakistan and India were on the brink of conflict over the Mumbai terrorist attacks of late 2008. A civil war was still raging in Sri Lanka. Who would turn bullish on stock under those "fundamental" conditions? We did, and only because Elliott wave patterns in the price charts of those four markets told us to "buy."

And by the way, the terrible conditions in India, Pakistan and Sri Lanka mostly reversed along with the market rally over the next year."

"The Wave Principle is how the market works. Financial markets are non-rational and counter-intuitive. Investing according to conventional assumptions eventually leads to financial ruin, since the market too often does the opposite of what most people expect.

Even thinking contrarily is insufficient, because sometimes it’s necessary to run with the herd. But Elliott wave analysis helps you to determine which psychological stance is most appropriate at any given time. Often, the news at the time would be suggesting you do the opposite". 

These latest analyses remind me of what Reuters' Mark Bendeich  wrote on June 10, 2008:

"A little more than six years ago, immediately after the Sept. 11 attacks on U.S. cities, few sane investment advisers would have recommended Pakistani stocks. They should have. Their clients could have made a fortune. Since 2001, the nuclear-armed South Asian country, blamed for spawning generations of Islamic militants and threatening global security, has been making millionaires like newly minted coins. As Western governments have fretted about Pakistan's nuclear weapons falling into the hands of militants, the Karachi Stock Exchange's main share index has risen more than 10-fold."

 Related Links:

Haq's Musings

Pakistan on Goldman Sachs' Growth Map

Pakistan's 64 Years of Independence

Goldman Sachs & Franklin-Templeton Bullish on Pakistan

Emerging Market Expert Investing in Pakistan

Pakistan's Demographic Dividend

Genomics & Biotech Advances in Pakistan

The Growth Map by Jim O'Neill

Pakistan Rolls Out 50Mbps Broadband Service

More Pakistan Students Studying Abroad

Inquiry Based Learning in Pakistan

Mobile Internet in South Asia

Online Courses at Top International Universities


Riaz Haq said...

Here is a News report on foreign buying pushing shares to four year highs in Karachi:

The Karachi Stock Exchange’s benchmark 100-share index rose 2 percent on Thursday to close at a four-year high as strong foreign buying encouraged local investors to take new positions in key stocks, dealers said.

“Healthy foreign buying buoyed market sentiment,” said Ovais Ahsan, head of equity sales at Optimus Capital Management. Foreign investors bought shares worth $13 million in Thursday’s and Wednesday’s sessions.

The benchmark 100-share index increased by 277.40 points, or 1.96 percent, to close at a 48-month high of 14,419.92 points – the level last seen on May 15, 2008. The index closed just 34.58 points lower than the intra-day high of 14,454.50 points. The KSE 30-share index surged by 211.79 points, or 1.71 percent, to 12,578.11 points.

Out of total 389 companies’ shares traded, 247 advanced, 90 declined, while 52 closed unchanged.

Stocks which played a leading role in driving the 100-share index up included Pakistan Telecommunication Company Limited (PTCL), Oil and Gas Development Company Ltd. (OGDCL), MCB Bank, Allied Bank Limited, Habib Bank Limited, Standard Chartered Bank Limited and Unilever Pakistan. Other notable stocks included Lotte PakPTA, Fatima Fertilizer Company, National Bank of Pakistan, Lucky Cement, Engro Foods, Faysal Bank and Nestle Pakistan.

Ahsan said that foreigners were taking fresh positions as Pakistani markets remain cheaper in the region. Moreover, foreign investors were expecting a positive outcome from ongoing talks between Pakistan and the United States over new terms of engagement on war on terror.

He said that fertiliser stocks remained hot for investors on reports that the government might buy 0.3 million ton of urea from local manufacturers instead of importing the same quantity to maintain its strategic reserves.

Samar Iqbal, an equity dealer at Topline Securities, said that heavyweight OGDCL remained in the limelight and gained Rs3 on reports that the government was expected to increase wellhead price of Qadirpur field.

Ahmed Rauf, a trader on foreign desk of JS Global Capital, said that many of the investors were bringing in their money into Pakistan since the government allowed them to invest in shares without disclosing their source of investment till June 2014.

He added that foreigners were acquiring stocks in fertiliser, banking, cement and oil sectors. “Yesterday, they were seen buying stocks including Fatima Fertilizer Company, PTCL, Engro Corporation, Lucky Cement, DG Khan Cement and Karachi Electric Supply Company.”

Turnover improved to 293.97 million shares from 246.39 million shares traded in the previous session. Turnover in futures market enhanced to 16.70 million shares from 11.87 million shares traded a day earlier.

Market capitalisation rose by Rs68 billion to Rs3,683 billion.

PTCL was the turnover leader with 26.41 million shares as it closed at Rs14.42 with one-day maximum allowed increase of Re1. It was followed by Lotte PakPTA with 22.76 million shares turnover as it closed at Rs9.32 with an increase of 78 paisas. DG Khan Cement was on third position with 22.76 million shares turnover as it closed at Rs43.41 with a surge of Rs1.57.

Riaz Haq said...

Karachi's KSE-100 is the 3rd fastest growing index so far this year, according to London's Telegraph:

Egyptian stocks suffered last year amid the turmoil that followed the toppling of its president. But 2012 has signalled a recovery in their fortunes, notwithstanding a recent wobble on concerns that a dispute between the interim government and parliament threatened to derail talks on a loan from the International Monetary Fund, yet to be secure
In calmer times, it is economics rather than politics that will drive share price performance, of course. In second place, Vietnam’s benchmark Ho Chi Minh Index seems to have broken its downward trend, up more than 35pc so far.

What was last year one of the worst Asian performers certainly had room for a bounce back. The index plunged in 2011 on worries that tight monetary policy to fight double-digit inflation would hurt economic growth and corporate earnings. Inflation has since been slowing however, and the market has picked up.

Vietnam is seen as a “frontier” market, one of those economies which are smaller than developing or emerging markets and offer a worse environment for business and in terms of corruption.
The third biggest riser so far this year has been Pakistan’s benchmark Karachi 100, which this week reached its highest level in four years.

Figures showed that offshore investors increased their holdings of local stocks. “There are a number of foreign investors increasing positions in Pakistani shares and locals are following,” Ahmed Rauf, a trader at JS Global Capital, told Bloomberg.
1 EGX 30, Egypt UP 36.1pc

2 Ho Chi Minh, Vietnam UP 35.5pc

3 Karachi 100, Pakistan UP 28.8pc

4 Bucharest BET, RomaniaUP 23.8pc

5 OMX Tallinn, EstoniaUP 19.2pc Box light

1 General Market, Cyprus DOWN 24.7pc

2 Ibex 35, Spain DOWN 19.7pc

3 Colombo All-Share, Sri Lanka DOWN 11.5pc

4 Merval, Argentina DOWN 10.5pc

5 FTSE Mib, Italy DOWN 7.8pc

Riaz Haq said...

Starwoods (owner of Sheraton) plans to add hotels in Pakistan and other key emerging markets, reports Emirates 24 7:

Starwood Hotels & Resorts Worldwide is strengthening its position as the leading hotel operator in the Middle East and North Africa (Mena) region with an existing portfolio with a pipeline of 40 new hotels.

This growth, primarily in the luxury and upper-upscale segments, represents an increase of nearly 60 per cent over the next five years.

In the past 18 months, Starwood has debuted six new hotels throughout Mena and momentum continues in the region where the company has recently inked deals for 10 additional hotels.

"Despite economic and political uncertainty in parts of the region, Starwood continues to see demand for growth of all of our brands across the Middle East and North Africa," said Frits van Paasschen, President and CEO, Starwood Hotels & Resorts.
With more than 70 per cent of the world's economic growth coming from fast-growing markets over the next few years, Starwood is focused on expansion in developing markets such as the UAE, Saudi Arabia and Algeria as well as key emerging markets including Iraq, Tajikistan and Pakistan.

Riyaz said...

To the common Pakistani, meanwhile everything is expensive because prices keep shooting upwards.

The prevailing political uncertainty and a grim economic and investment outlook add to Pakistan's currency woes with leading brokerage houses and banks are predicting further rupee depreciation in the days ahead. The Standard Chartered Bank sees the Pakistani rupee at 94 rupees to a dollar by the year end, while the Investment Capital Markets – a brokerage house – predicts it at 98.5, according to a poll conducted by the Jang Group for its annual issue of “Kaisa hoga 2012?”

Sad news because more expensive imports higher inflation!

Riaz Haq said...

Riyaz: "Sad news because more expensive imports higher inflation"

The biggest and most important import that causes twin deficits and inflation in most developing economies is oil. And as the Iran fears ease, the oil prices are now flat to declining given the economic woes of the west. So I think that's good news for Pakistan as long as it maintains its exports and remittance growth.

Portfolio investments and stock prices in Pakistan are generally driven by rising profits and low price-earnings multiples relative to other emerging markets, making Pakistan's KSE the third fastest growing stock market in the world so fat this year.

Riaz Haq said...

Here's Daily Times on rising domestic sales of cement in Pakistan:

The cement sales in domestic market posted fifth straight month of increase as compared to last year but the industry is still passing through difficult times as its exports registered third consecutive month of decline.

A spokesman of All Pakistan Cement Manufacturers Association stated this while discussing performance of the cement industry during first 10 months of the current fiscal.

He said that the total cement despatches up till April 2012 were 26.643 million tonnes, which is 3.31 percent higher than despatches during the corresponding period of last fiscal. The domestic sales during this period increased by 8.51 percent but exports registered a decline of 8.91 percent. He said performance of north and south-based mills depicted different trends both in domestic sales and exports. He said local sales of the north-based mills increased by 7.77 percent to 15.928 million tonnes while the south-based mills registered higher domestic consumption by 11.81 percent to 3.701 million tonnes. In exports, however, the mills in the north suffered comparatively less decline than in the south. The cement producers based in north exported 5.087 million tonnes of cement posting a decline of 6.23 percent over exports made during the same period last year. The exports of south region mills declined by 15.29 percent to 1.928 million tonnes.

Among the export markets, the Afghanistan market remained relatively stable as exports declined nominally by 0.15 percent to 3.778 million tonnes. Exports to India increased by 15.19 percent to slightly over half million tonnes. This includes exports by sea, as well as, through Wagah border. Exports to other destinations through sea however decreased by 16.96 percent to 2.699 million tonnes. Cement industry people said that cement is one the major commodities that is abundantly available in Pakistan and can be exported to India through the land route. Despite tall claims to increase bilateral trade, the respective governments failed to remove non-tariff barriers imposed on Pakistani products. There is currently a labour strike on Indian side resulting in piling up of consignments, which is affecting the movement of trucks from Pakistan.

Besides, merely 10 wheeler trucks from Pakistan are allowed to cross the border and maximum weight may not be more than 40 tonnes per truck. Unfortunately, most of the available transportation for cement has a loading capacity of more than 40 tonnes.

Availability of 10 wheeler trucks with a loading capacity up to 40 tonnes for cement is limited; resulting in the cement industry being unable to export its surplus capacity

There is only one scanner installed at the new gate at Wagah border resulting in long queues creating hurdles and delay for Pakistani exports to India. The Pakistani exporters have demanded of the government to look into the matter and allow trucks with a loading capacity up to 80 tonnes instead of 40 tonnes. They further urged the government that exporters should also be provided all necessary facilities at the border points so that they could easily clear their consignments.\05\08\story_8-5-2012_pg5_2

Pradeep said...

India's cement needs are under a very high growth path.

Our report has found that, the Indian cement industry sustained its growth rate even in the tough conditions of economic slowdown. Cement production is expected to increase above 9% year-on-year during 2010-11 against the previous fiscal year. Almost every cement major expanded their installed capacity in the backdrop of the government backed construction projects as these projects have created strong demand for cement in the country. Moreover, it is anticipated that the industry players will continue to increase their annual cement output in coming years and the country’s cement production will grow at a CAGR of around 12% during 2011-12 - 2013-14 to reach 303 Million Metric Tons.
Easing imports via the Wagah border would help both sides!

Riaz Haq said...

NHA to implement 82 highway schemes at Rs 569bn, reports Daily Times:

National Highway Authority (NHA) is implementing 82 highway schemes at the cost of Rs 569 billion, while 14 new projects are in pipeline costing Rs 95 billion.

The participants of 11th Senior National Management Course visited NHA head office here on Wednesday where

NHA’s member (planning) Sabir Hasan while briefing about the functioning of the NHA to visiting faculty members of the 11th Senior National Management Course said 98 Toll Plazas have been approved on NHA, out of which 84 were operational.

NHA is striving hard for availability of National Trade Corridor (NTC), in the country. Practical advancement is being made for achieving North South economic corridor, providing linkages with Gwadar and up gradation of Karakoram Highway in particulars.

Under NTC programme highways, Motorways, Expressways are being constructed from ports to borders with the view to provide linkages for the Transit Trade. NTC will reduce 50 percent travelling time, decrease 10 percent transportation cost and reduce 70 percent road fatalities.

Rs 300 billion will be spent during the next 5 to 7 years for this gigantic programme. Toll Collection System is being established on modern lines, he added.

He said pragmatic steps have been taken to save asset of highways from bad effects of overloading. To this effect weigh stations have been set up at specific locations to check the overloaded vehicles. In order to ensure construction of durable roads state of the art and advanced technologies are being employed. NHA is attaching great importance to make journey safe and sound on its network, he added.\05\08\story_8-5-2012_pg5_5

Anonymous said...

Indian export growth FASTEST in the world!!!!


love heart

Riaz Haq said...

Here's a Businessweek report on Karachi stock market rally:

The Karachi Stock Exchange 100 Index may rally as high as 17,000 this year, Farrukh Hussain, chief investment officer of Karachi-based BMA Asset, Pakistan’s second-biggest private money manager, said in a May 7 interview. That would be the highest level on record. The gauge closed at 14,613.59 yesterday. BMA’s Pakistan Opportunities Fund, the nation’s only offshore, dollar- based fund, returned 23 percent this year, beating 99 percent of its peers, according to data compiled by Bloomberg.

Pakistan’s benchmark stock index has surged 29 percent this year after the government eased rules on a capital-gains tax and demand for energy and building materials bolstered company earnings. The gauge, which slid 5.6 percent in 2011, is trading at 7.3 times estimated earnings, the lowest valuation in Asia, reflecting the country’s struggles to cope with militant attacks and political instability.

“Stocks are dirt cheap compared to regional markets and by any standard of the imagination,” Hussain said. “The change in the capital-gains tax regime provided the much needed impetus but the trigger this year is corporate earnings and market fundamentals.”
Earnings Growth

Company profits in Pakistan will grow an average 20 percent in the year ending June 30, said Hussain, who oversees about $97 million at BMA. Investors should buy fuel explorers, banks and cement stocks, which will have profit growth of 20 to 25 percent, he said.

BMA’s Pakistan Opportunities Fund holds shares in Pakistan Oilfields Ltd. (POL), the nation’s third-biggest energy explorer, Engro Corp. (ENGRO), a maker of fertilizer, food and plastics, and Lucky Cement Ltd. (LUCK), the country’s biggest producer of the building material, Hussain said.

Pakistan Oilfields has gained 11 percent this year, Lucky Cement 77 percent, and Engro 67 percent. The shares are trading at less than 7 times estimated earnings, according to data compiled by Bloomberg.

“This is the world’s sixth-most populous country and a population of 180 million people who need housing, energy and food,” Muddassar Malik, chief executive officer of BMA, said.

Malik in September 2010 predicted a rally in stocks after Pakistan’s deadliest floods, which caused losses estimated by the government at $7 billion. The Karachi 100 share index jumped 20 percent in the last three months of that year.
Trading volumes have surged since Jan. 21 when Pakistan decided to ease rules on a capital-gains tax, exempting some investors from declaring their source of income. Average daily trading volume for the past three months almost tripled to 172 million shares from 61 million shares a year earlier, according to data compiled by Bloomberg.

“There’s been unprecedented turbulence in Pakistan and we don’t try to hide that,” Malik said. “But it’s also a story that’s yet to be discovered.”

Riaz Haq said...

Here's a Pak Observer report on outgoing Italian ambassador's belief that Pakistan will be Asia's third largest economy:

Vincenzo Prati the outgoing Ambassador of Italy has stated that he had no doubt in his mind that Pakistan would be the third greatest economy in the Asian Continent. He was speaking at a farewell reception held here in his honor by (CNG/LPG systems leaders) Landirenzo Pakistan.

Having said that the Envoy prompted to add that his wife was Japanese and he considered Japan as ‘some islands beyond’: “If we consider the (Asian) Continent itself, I think Pakistan deserves to be the third biggest economy. It is of interest to all partners of Pakistan to consolidate our cooperation with Pakistan and never tier ourselves to renew the efforts. Things are never easy so we need to be patient and resilient”. Vincenzo Prati, who has contributed tremendously towards ameliorating Pak-Italy relationship during his sojourn here, has unassumingly stated that he was only representing Italian citizens and the Government: “Our strength is not our own strength. Our strength is the strength of the people behind us and in this case we have very valuable companies working in Pakistan. Recalling his recent meeting with the Governor State Bank of Pakistan, Prati maintained: “He is a man of great vision and he knows that the future of Pakistan is the future of the economy; also of the relations of Pakistani economy with the partners ... multiplying contacts with all the neighbors and partners to improve its economy. We should think of Pakistan as a great economy of the future. It is already an important economy but I have no doubt in my mind that Pakistan will become even more important”.

Commenting on the crisis Italian company Landirenzo (and Japanese companies like Suzuki) had to face due to Government’s restriction on CNG, he maintained: “When the Japanese Ambassador, the Argentinean Ambassador and myself went to speak to the Pakistani authority we were not speaking on our own of course but on behalf of the important companies that are part of our countries. They are working in Pakistan and contributing to the welfare of Pakistan, not only of their own countries. I have to say that they stood by the Pakistani authorities; they of course share the common goal to improve relations because it is in the interest of both the countries”. Maintaining that there was always a margin of compromise whenever there were divergences he said: “We have good understanding that there is a margin of maneuver. We hope that Pakistani government and the companies will reach a compromise that this is in line with Pakistani expectations. Italian Ambassador concluded his address with a note of optimism: “I am sure that if Suzuki, Toyota, Landirenzo and other concerned companies continue to fight their good battle, Pakistani authorities would be on their side sooner or later”.

First Secretary Italian Embassy Dr. Federico Bianchi speaking on the occasion has said: “Today we get here to bid farewell to our Ambassador Vincenzo Prati who will be leaving soon this beautiful country that he had served for the last four years. We also took the occasion of our trip to the financial and the economic hub of the country to discuss the issue of Landirenzo and the other Italian and foreign companies that had invested in CNG in the past years”. He said that the Italian Embassy in the past months had been working with the Pakistani authorities to find measures to protect the investments that Landirenzo had made in Karachi and in Sindh. ....

Riaz Haq said...

Here's an FT report on Sweden's Pakistan Fund:

With Pakistan so much in the news for the above (negative) reasons it is no surprise that few fund managers have set up single country Pakistan funds.

However, newly established Swedish fund manager, Tundra Fonder, was determined to look beyond the headlines.

Tundra was founded in September last year by partners Johan Elmquist and Mattias Martinsson. By October the group had launched its first funds, one investing in Russia and the other in Pakistan. In February Tundra unveiled a third offering: the Global Emerging Markets Agri & Food Fund.

Launching Tundra Pakistanfond was a particular ambition for Mr Martinsson, the fund’s lead manager, who had formed a personal conviction in the country’s growth story. Even he has been taken by surprise, however, by how well things have gone. By last month, Mr Martinsson says, he and Mr Elmquist had noticed an extraordinary thing – the Tundra Pakistan fund was on top of the most clicked list, “Mest clickade fonder ” on the Swedish version of Morningstar, the fund news and data provider.

Investors have not only been clicking. They have been investing too. “We currently have approximately $65m in assets under management of which a little bit more than $50m right now is in the Pakistan fund,” says Mr Martinsson.

Early investors have already been rewarded. By May 31, year-to-date returns were 27.9 per cent, according to Morningstar.

Mr Martinsson says the strong inflows into Tundra’s Pakistan fund could be due to the structure being something that investors can understand and trust – it is Ucits IV compliant and open for daily trading. A buoyant period for Pakistan’s stock market (the KSE 100 has risen more than 20 per cent since January 1) might also have been helpful. But these factors cannot explain the whole story. The World Investment Oppportunities Funds – Pakistan, a Luxembourg registered Sicav still has only $1.75m in assets under management and it launched in 2008.

Riaz Haq said...

Here's a TOI story on declining violence in Pakistan:

According to the data collated by Pakistan Body Count, an organisation that maintains a 'news-report based database' of suicide and drone attacks carried out in the country, the number of incidents as well as causalities, have witnessed a steep decline compared to 2009 and 2010 - the peak years in terms of causalities. The incidents which failed to reach even double digits in the five years spanning between 2002- 2006 suddenly spiked to 57 in 2007. The bombings claimed over 800 lives in that year. They went unchecked for the next two years and reached a peak in 2009 when 90 suicide bombings claimed over thousand lives.

Although the number of incidents started declining in 2010 but the number of fatalities increased. In 2011 there were 44 blasts killing 625 people- nearly half of the 2009 figures. By March 2012, when the data was last updated, there were only 16 such blasts which took 119 lives.


Year Total Blasts Killed Injured
2002 2 27 91
2003 2 65 115
2004 8 82 399
2005 4 83 230
2006 9 161 230
2007 57 842 2008
2008 61 940 2426
2009 90 1090 3462
2010 58 1153 2954
2011 44 625 1386
2012 16 119 254

Source: Pakistan Body Count

Riaz Haq said...

Here's a CNN report on Pakistani city of Sialkot which manufactures musical instruments, surgical equipment and sports goods:

Which cities can boast more than a dozen bagpipe factories? Edinburgh? Glasgow? How about, Sialkot, Pakistan?

Sialkot is located in north-east Pakistan, some 125 kilometers from the capital Lahore. Legend has it that the city started making bagpipes during the British Raj, when a Scottish businessman came to town and set up a factory.

More than a century later Sialkot is one of the world’s biggest manufacturers of bagpipes, with more than a dozen bagpipe factories, both big and small.

The bagpipe business became so successful that manufacturers started making and exporting other specialty items - including staples of American culture such as vintage basketballs, American footballs and even replica civil war uniforms.

Today the city manufactures hundreds of items. Sports companies such as Nike and Adidas make their soccer balls here. Dozens of kinds of musical instrument, and even surgical equipment, are made in Sialkot.

Naeem Qureshi, of the Sialkot chamber of commerce, told CNN’s Reza Sayeh that the city's exports are increasing, and are now worth $1.4 billion.

While Pakistan often makes headlines these days because of militant attacks and extremism, local manufacturers say security concerns are overblown. Pakistan has plenty of space, as well as cheap raw materials and labor. And local businesses say Sialkot is a perfect example of why it pays to invest in Pakistan and do business there.