tag:blogger.com,1999:blog-5848640164815342479.post5075685435173074019..comments2024-03-27T15:36:44.737-07:00Comments on Haq's Musings: Pakistani Shares Beat Asian and BRIC Market Indices in 2012Riaz Haqhttp://www.blogger.com/profile/00522781692886598586noreply@blogger.comBlogger55125tag:blogger.com,1999:blog-5848640164815342479.post-80828092055497832082021-12-18T18:28:28.606-08:002021-12-18T18:28:28.606-08:00THE size of Pakistan’s informal economy is estimat...THE size of Pakistan’s informal economy is estimated to be as much as 56 per cent of the country’s GDP (as of 2019). This means that it’s worth around $180 billion a year, and that is a massive amount by any yardstick. by Dr. Lalarukh Ejaz, Assistant Professor, IBA Karachi<br /><br />https://www.dawn.com/news/1610606<br /><br />The country’s large black economy is inextricably linked to the levels and quality of governance exercised by the state. In the course of fieldwork for my doctoral research for the University of Southampton, I found that many Pakistani women who were setting out starting their own businesses did so in the informal sector. The reasons they gave usually related to their experience of dealing with the bureaucracy and government machinery in Pakistan which they found to be dominated by red tape and tedious and complicated procedures.<br /><br />This is precisely what drives many people who want to engage in economic activity towards the undocumented economy. The headache of having to deal with a large bureaucracy, of complying with complicated and long registration procedures, of getting approvals and licences from various government agencies and departments make it difficult for most people to operate within a documented framework.<br /><br />A large black economy is an indication of misgovernance and indicates a failure of the government to ensure that all businesses and entrepreneurial ventures are included in the formal sector. This failure in turn leads to reduced tax revenue collection since all entities outside of the formal economy do not pay any tax to the government.<br /><br />Given that the size of the black and informal economy is estimated at over half of the country’s GDP, bringing it under the documented net would bring hundreds of billions in tax revenue. Those funds would then be spent on social sector development projects and help the FBR meet its annual revenue collection targets.<br /><br />The solution is to increase the size of the formal economy and this can be done by making transparent and efficient those institutions tasked with registering and regulating businesses. Instead of harassing businesses and entrepreneurs, agencies like the FBR should act as facilitators and make it easier for new ventures to be registered and come under the documentation net. This would in turn be good for the FBR because achieving the tax collection target would be easier than if they were in the black economy.<br /><br />Government requirements for new businesses are linked to the general level of governance. A state whose primary aim is to improve the lives of its citizens will prioritise good governance over all other things and will formulate and implement policies that enable this. In fact, such a state will also be able to realise that having such priorities ends up helping it as well, not least because a happy populace is a more economically productive populace.<br /><br />Unfortunately, in a country like Pakistan, so far, this has not been the case. A multitude of licences and permissions are required from a wide variety of federal, provincial and local government departments to operate a business or a store. Having to comply with all of these requires not only a lot of time on the part of the entrepreneur but also funds for greasing the cogs of the bureaucratic machinery that regulates businesses and commercial enterprises in Pakistan.<br /><br />The result of this is that a significantly growing number of entrepreneurs, and especially those that happen to be female, are increasingly veering towards the informal sector. This is both good and bad — good because it enables economic activity to take place, and jobs to be created, away from the unwanted glare of government inspectors and officialdom, and bad because the incomes generated from such activity don’t end up getting counted in the national GDP and nor are taxes paid on it.<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-43524163436945421912013-10-03T22:03:39.345-07:002013-10-03T22:03:39.345-07:00Here's a NY Times on soaring stock market in K...Here's a <a href="http://www.nytimes.com/2013/10/04/world/asia/amid-bloodshed-in-pakistan-a-stock-exchange-soars.html" rel="nofollow">NY Times</a> on soaring stock market in Karachi, Pakistan:<br /><br /><i>If the best time to buy, as the old business adage says, is when there is blood on the streets, then Pakistan’s commercial capital, Karachi, offers the ideal investment opportunity.<br /><br />For more than a decade, the sprawling seaport megalopolis of about 20 million people has been racked by political, militant and criminal violence that has taken thousands of lives. Yet, over the same period, the city stock market, which is also Pakistan’s main exchange, has posted spectacular results.<br /><br />Over the past 12 months alone, the Karachi Stock Exchange has surged more than 44 percent, placing it among the world’s top-performing stock markets in dollar terms this year, according to Bloomberg.<br /><br />That follows a decade of growth in which one dollar invested in an index fund of Pakistani stocks 10 years ago would have earned, on average, 26 percent every year, analysts say, in a period otherwise notable mostly for bad news. As the stock market rose, the Pakistani military leader Gen. Pervez Musharraf fell, Osama bin Laden was captured and Taliban violence spread from the northwest to cities across the country, including Karachi.<br /><br />Just as surprising, perhaps, Wall Street firms are driving the latest phase of the stock boom. Bad news can make for a good bargain, they say.<br /><br />“What you see in the popular press is just one part of the picture,” said Mark Mobius, a fund manager at Franklin Templeton Investments, which has more than $1 billion invested in Pakistan stocks, mostly in the energy sector. “There’s another side to these countries, where life goes on. And that’s what we focus on.”<br /><br />The gloomy image of Pakistan obscures positive aspects of its economy that, investors say, make some companies an attractive bet. Beyond the headline news, much of the country is getting on with normal life. And with a population estimated at nearly 200 million people — a high proportion of them young — Pakistan offers a large, lucrative market for consumer goods, construction and financial services firms, which constitute the bulk of the Karachi stock market.<br /><br />The biggest publicly listed companies — like the multinational Nestlé, the Oil and Gas Development Company and Fauji Fertilizer, a military-run conglomerate — pay handsome dividends, which makes them attractive to foreign investors.<br /><br />And the recent election victory of Prime Minister Nawaz Sharif, a business tycoon, has injected confidence into the financial community, which had been wary of the previous government.<br /><br />For a time, Pakistani stocks were undervalued by as much as 50 percent to account for risk, compared with a regional discount of about 20 percent, said Taha Javed, a financial analyst in Karachi. Now, as foreign investors pile in, he said, “we are catching up.”...</i><br /><br />http://www.nytimes.com/2013/10/04/world/asia/amid-bloodshed-in-pakistan-a-stock-exchange-soars.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-65536785594652888552013-07-29T16:03:50.939-07:002013-07-29T16:03:50.939-07:00HWJ: "FRESH UPDATE! The Economist on KSE: htt...HWJ: "FRESH UPDATE! The Economist on KSE: http://www.economist.com/blogs/economist-explains/2013/07/economist-explains-19 "<br /><br />So how does Economist explain the fact that KSE-100 has been outperforming BRICS for many <a href="http://www.riazhaq.com/2010/01/karachi-tops-mumbai-in-stock.html" rel="nofollow">years before 2012</a> when the amnesty took effect? Do the rising profits, low P-E ratios and relatively low valuations not count for anything? <br /><br />http://www.riazhaq.com/2010/01/karachi-tops-mumbai-in-stock.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-71430696753568294312013-07-29T15:22:13.698-07:002013-07-29T15:22:13.698-07:00FRESH UPDATE! The Economist on KSE:
http://alturl....FRESH UPDATE! The Economist on KSE:<br />http://alturl.com/qy8dcHopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-38211321123102479312013-05-14T20:49:07.687-07:002013-05-14T20:49:07.687-07:00Here's a Reuters' report on Templeton and ...Here's a <a href="http://in.reuters.com/article/2013/05/14/pakistan-election-investment-idINDEE94D0HM20130514" rel="nofollow">Reuters' report</a> on Templeton and Goldman Sachs bullishness on Pakistan:<br /><br /><i>After 18 years as a banker at firms such as Citigroup and Nomura, Shaheryar Chishty took a different direction in late 2011, starting an investment firm that, among other things, helped guide Chinese and South Korean money into Pakistan.<br /><br />While Pakistan is probably not the first place the average investor would choose to park cash, Chishty's timing was spot on. The country's stock market surged 49 percent last year to become one of the five best performing markets in the world.<br /><br />The victory by former prime minister Nawaz Sharif in Pakistan's general election lifted the stock market to an all-time high on Monday, in a sign that investors, which include Goldman Sachs (GS.N) and Mark Mobius of Templeton, are betting on the prospect of further market gains through a stable government.<br /><br />"I'm not under-estimating the challenges, but we have one party with a simple majority," Chishty, the Pakistan-origin chief executive of Asiapak Investments Ltd, told Reuters in an interview in Hong Kong on Monday. "A lot of the market's rise happened despite the previous government."<br /><br />Risks, especially violence by Islamic militant groups, remain constant, yet Pakistan's market is up another 21 percent this year, behind only Japan and the Philippines as Asia's top gainers, according to Thomson Reuters data.<br /><br />Pakistan's uncertain security environment and a deteriorating economy have failed to keep emerging market fund guru Mobius and Goldman Sachs Asset Management out of the country.<br /><br />Mobius invested 4.6 percent of his $18.5 billion Templeton Asian Growth Fund's assets in Pakistani shares as of the end of March, more than his exposure to shares in Hong Kong, Singapore or Taiwan, according to data from Thomson Reuters Lipper.<br /><br />"Pakistan is not a small country and it is strategically significant. However, with the negative press surrounding the country, it has tended to be ignored by investors," said Mobius, executive chairman of Templeton Emerging Markets Group.<br /><br />Last year, 15 equity funds from Pakistan were among the world's top 100 performers, the Thomson Reuters Lipper data show....</i><br /><br />http://in.reuters.com/article/2013/05/14/pakistan-election-investment-idINDEE94D0HM20130514Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-79124384756033443252013-05-13T09:04:07.500-07:002013-05-13T09:04:07.500-07:00Here's a Bloomberg story on Sharif victory rai...Here's a <a href="http://mobile.bloomberg.com/news/2013-05-12/pakistan-stocks-seen-extending-record-rally-on-election-results.html" rel="nofollow">Bloomberg story</a> on Sharif victory raising investors' hopes:<br /><br /><i>Pakistan’s stocks climbed the most in two months to a record as unofficial election results showed a party led by former Prime Minister Nawaz Sharif winning the most seats in parliament.<br />The benchmark KSE 100 Index gained 1.8 percent, the most since March 12, to 20,272.28 as of 2:10 p.m. Karachi time, taking its rally this year to 20 percent. Sharif’s Pakistan Muslim League will probably lead a government that will support the nation’s business community, said Farrukh Hussain, who oversees about $110 million as chief investment officer at BMA Asset Management Co.<br />Sharif, who served two terms as Pakistan’s prime minister in the 1990s, will face the challenge of bolstering an economy hampered by a power crisis and quelling a Taliban-led insurgency that has killed 151 people leading up to the elections. The KSE 100 rallied 8.5 percent in February 1997 when Sharif won his second term. The gauge could rise between 3 percent and 5 percent this week, and 15 percent by the end of the year, BMA Asset’s Hussain said.<br />“With a Nawaz Sharif-led government, we can see a lot of support for the economy,” Hussain said by phone from Karachi yesterday. “Investors would feel much more comfortable with the incoming government.” BMA Asset’s Pakistan Opportunities Fund has beaten 98 percent of its peers this year, data compiled by Bloomberg show.<br />Sharif’s party had won 127 seats in the lower house of parliament, according to a tally by state-run Pakistan Television. President Asif Ali Zardari’s Pakistan Peoples Party, which headed the previous administration, took 31 seats, a third of its previous total.<br />Slowing Growth<br />The results set the stage for the longer-term stability of the country’s sovereign rating of B minus, Standard & Poor’s Ratings Services said in a statement from Singapore today. That’s six levels below investment grade.<br />Sharif, whose family owns steel and sugar mills, ended state monopolies in shipping, airlines and telecommunications when in office. Pakistan’s $210 billion economy grew an average 3.8 percent each year during Sharif’s terms as prime minister, according to data on the World Bank’s website. Under Zardari’s five-year administration, growth slowed to an average 3 percent, less than half the annual pace of the previous five years.<br />The KSE 100 Index (KSE100) surged this year as higher commodity prices and consumer spending boosted earnings of the gauge’s companies by 43 percent in the past 12 months, the most among 17 Asian equity indexes, data compiled by Bloomberg showed as of May 9. That profit growth lured $202 million of stock purchases from overseas investors this year, the most since the same period in 2010, the data show.<br />Attractive Valuations<br />The stock rally has driven the gauge to trade at 8 times estimated earnings, the most expensive level in almost two years, according to data compiled by Bloomberg. The last time the gauge traded at this level -- in June 2011 -- the measure slumped more than 10 percent in two months. The current valuation is still 44 percent below the MSCI Asia-Pacific Index’s 14.2 multiple.<br />“Valuations are still attractive,” Muhammad Imran, who oversees about $203 million as chief investment officer at ABL Asset Management Co. in Karachi. “People will take this election positively. Foreign inflows have been driving the market and this will continue.”<br />Seven stocks advanced in the KSE 100 today for each one that declines. MCB Bank Ltd., the country’s largest by market value, gained 4.9 percent to 261.60 rupees, poised for the highest close since May 2008. Pakistan State Oil Co. jumped 5 percent to 221.86 rupees....</i><br /><br />http://mobile.bloomberg.com/news/2013-05-12/pakistan-stocks-seen-extending-record-rally-on-election-results.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-81297834536556626732013-04-26T17:53:19.984-07:002013-04-26T17:53:19.984-07:00Here's a Daily Times report on Karachi stock m...Here's a <a href="http://www.dailytimes.com.pk/default.asp?page=2013%5C04%5C27%5Cstory_27-4-2013_pg5_17" rel="nofollow">Daily Times</a> report on Karachi stock market rally:<br /><br /><i>KARACHI: The Karachi stock market crossed 18,900 points level on the last trading day of the week Friday as earnings frenzy continued to encourage investors to go for buying in oil, fertilizer and cement sectors.<br /><br />The Karachi Stock Exchange (KSE) 100-share index gained 32.10 points or 0.17 percent to close at 18,917.71 points as compared to 18,885.61 points of the previous session. The KSE 30-share index was up by 10.81 points to close at 14,584.18 points as compared with 14,573.37 points.<br /><br />“Mixed activity was seen at the market with corporate results season almost coming to an end,” said Topline Sec dealer Samar Iqbal. “Mixed March quarter results were announced today.”<br /><br />Once again TRG came in the limelight as it closed at its upper cap with 27.5 million shares, she said and added that Engro Corporation and Foods saw some profit-taking ahead of the weekend.<br /><br />The market turnover went down by 3.53 percent and traded 206.02 million shares as against 213.57 million shares of the previous session. The overall market capitalisation rose 0.34 percent and traded Rs 4.649 trillion as against Rs 4.633 trillion. Gainers outnumbered losers 204 to 146, while 17 stocks were unchanged.<br /><br />“Stocks closed higher led by second-tier stocks on strong valuations,” said Arif Habib Corporation Director Ahsan Mehanti. “Index remained in a narrow range amid concerns over security unrest in the city, economic uncertainty and rupee fall despite recovery in global commodities and record quarter-end earnings announcements in oil, fertilizer, textile and cement stocks.”<br /><br />The KMI 30-share index gained 36.24 points to close at 32,930.01 points from its opening at 32,893.77 points. The KSE all-share index closed with a gain of 48.06 points to 13,455.50 points as compared to 13,407.44 points of the previous session.<br /><br />“The market closed in the green zone with intraday gains clipped by selling pressure in Engro Chemicals and Pakistan Petroleum,” said JS Research analyst Ovais Ahsan. “The banking sector gained led by MCB Bank and UBL as the sector continued to limp out of a long spell of underperformance.”<br /><br />Adamjee Insurance corrected overbought momentum after a weeklong rally.<br /><br />“Bulls reined the final session of the week as index came close to 19,000 points level during intraday trade,” said Habib Metropolitan Finance Corporation Salman Vidhani. “Selling pressure in Engro dampened overall sentiment as some stocks also registered a negative close.”<br /><br />TRG Pakistan Ltd was the volume leader in the share market with 27.54 million shares as it closed at Rs 11.30 after opening at Rs 10.30, gaining Re 1. Lotte Chemical traded 16.43 million shares as it closed at Rs 7.54 from its opening at Rs 7.35, rising 19 paisas. Maple Leaf Cement traded 11.81 million shares and closed at Rs 18.95 as compared to its opening at Rs 19.36, shedding 41 paisas. Pervaiz Ahmad traded 11.50 million shares as it closed at Rs 3.29 as against its opening at Rs 2.57, increasing 72 paisas.</i><br /><br />http://www.dailytimes.com.pk/default.asp?page=2013\04\27\story_27-4-2013_pg5_17Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-84928988838765272772013-03-29T22:06:24.163-07:002013-03-29T22:06:24.163-07:00Here's a PakistanToday report on KSE-100 perfo...Here's a <a href="http://www.pakistantoday.com.pk/2013/03/30/news/profit/equity-market-rallies-6-in-1q2013-as-election-nears/" rel="nofollow">PakistanToday</a> report on KSE-100 performance in Q1-2013:<br /><br /><i>KARACHI - Hopes for change in the political setup along with strong foreign inflows were the major drivers of the country’s equity market during the first quarter of calendar year 2013 (1Q2013).<br />The market observers believe that while the May 11 election are around the corner, the equity investors were cautiously looking at the fast-changing political developments in the country. “We anticipate market activity to hinge on political temperature of the country,” viewed Topline analyst Nauman Khan.<br />The heightened investors’ confidence was also attributed to significant reduction in the policy rate that had facilitated the funds flows towards equity market, said the analysts.<br />The benchmark KSE 100-share index posted a gain of 6 percent, 5 percent in dollar terms, during the quarter to close at 18,043 and overall market capitalization reached Rs4.4 trillion or $45.2 billion.<br />“Though the index made a new high of 18,185, on March 01, 2013, the market capitalization was still seven percent, 40 percent in dollar terms, down from its record high of Rs 4.8 trillion ($74.9 billion) achieved on April 18, 2008,” said Khan.<br />With index achieving our midyear target of 18,000, we re-iterate that index can make a new high by crossing 19,500 in calendar year 2013 as mentioned in our strategy note date December 12, 2012. Abrupt PKR deprecation due to weakness in external account remains the major risk to our assessment.<br />The positive momentum was accompanied by higher traded volumes. During 1Q2013, average daily traded volumes stood at Rs5.7 billion (US$58.4 million) which compares favorably with Rs4.5 billion (US$46.6 million) recorded in the previous quarter. The average traded volumes are the highest in last 12-quarters.<br />In terms of shares, average volume stood at 210.6 million which is up 25 percent from preceding quarter, while are highest since 1Q2008 (19-quarters high).<br />In addition to higher foreign buying, we believe increased participation by individual investors have also contributed to improved depth of the market. Individual participation on an average improved to 50 percent in 1Q2013 as against 48 percent in the preceding quarter.<br />The foreigners, that hold $3.3 billion worth of Pakistan shares that is 31 percent of free-float and 8 percent of market capital, remained net buyers in 1Q2013.<br />The offshore investors in the quarter bought shares worth $228 million and sold $158 million resulting in net buying of $70 million as of March 28.<br />The numbers compare favorably with $65 million net inflow registered in previous quarter.<br />Giving their future outlook, the analysts reiterated that the market participants were likely to cheer signs of change in the political setup. “Mid caps with high leverage and consumer related business can perform better than large caps in 2013,” said Khan. </i><br /><br />http://www.pakistantoday.com.pk/2013/03/30/news/profit/equity-market-rallies-6-in-1q2013-as-election-nears/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-53409603425701579942013-03-08T21:41:34.497-08:002013-03-08T21:41:34.497-08:00Here's an ET report on Elixir Securities CEO&#...Here's an <a href="http://tribune.com.pk/story/517892/elixir-securities-bullish-on-kse-even-if-incumbent-govt-returns/" rel="nofollow">ET report</a> on Elixir Securities CEO's projections for Pak equities:<br /><br /><i>KARACHI: The sales pitch employed by Elixir Securities CEO Junaid Iqbal to global fund managers at the Pakistan Capital Markets Day in New York last month was simple: even if the incumbent government returns to power after the upcoming elections, the Karachi Stock Exchange (KSE)-100 Index is still likely to post returns of over 21% in 2013.<br /><br />In case a more pro-business government – supposedly led by the PML-N – comes into power, the stock market will rerate from the current multiple of 6.9 to 7.9, if the projections of the Elixir Securities research team are to be believed. That would push the index to 23,200 points by the end of 2013, which translates into an annual return of 38%.<br /><br />In the best-case scenario, wherein the new political leadership tries to fix the taxation system in its first months in power, Elixir Securities estimates the KSE-100 Index will likely touch 26,000 points by December 2013, which means a staggering 54.8% annual return.<br /><br />“The market is operating at an average multiple. In the absence of any leverage, there are no associated risks. It is being driven purely by earnings growth right now,” Iqbal told The Express Tribune in an interview.<br /><br />Initially planned as a one-day event (hence named the Pakistan Capital Markets Day), Elixir Securities’ two-day road show in the global financial centre was attended by 35 fund managers, partners and principals from 25 major international asset management companies and hedge funds. Elixir Securities also took along representatives from Engro Corporation, Engro Foods, Lucky Cement and United Bank Limited. Iqbal was accompanied by the heads of his research and sales departments.<br /><br />“All of them wondered how Pakistan’s capital markets could perform so well amidst bombings and violence,” he said, while noting that the KSE remained the third best-performing stock exchange of the world in 2012 by posting 37% returns in dollar terms, despite political instability and frequent terrorist attacks.<br /><br />“I told them, honestly, that we cannot defend Pakistan on its human rights record: but the fact remains that the annualised growth in profits of the corporate sector for the last four years has been 17%,” he said.<br /><br />“They understand that a political metamorphosis is taking place in Pakistan. At the same time, they are supremely impressed by the quality of management in our corporate sector,” he added.<br /><br />Without naming the funds or giving their exact number, Iqbal said many of the companies he interacted with in New York have already consented to visit Pakistan in the near future. He said that it is not possible to state the exact amount of foreign institutional portfolio investment that is likely to come in as a result of his road show, but added that he was confident that investment will soon be coming into Pakistan’s capital markets.<br /><br />He cited two reasons: firstly, all of the participants, which included some of the largest global funds, had sent their senior team members – something that shows how seriously they viewed Pakistan’s financial sector. Secondly, he noted, they were all ‘knowledgeable investors’ who had already developed deep understanding of issues ranging from the suspension of gas to Engro’s $1.1 billion fertiliser plant, to turf wars in Karachi involving the People’s Aman Committee.<br /><br />“Pakistan is already on their radar. Our market will skyrocket once the law and order situation improves,” he said.</i><br /><br />http://tribune.com.pk/story/517892/elixir-securities-bullish-on-kse-even-if-incumbent-govt-returns/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-36635104614424068192013-03-04T10:17:29.928-08:002013-03-04T10:17:29.928-08:00Here's Gulf News on various sectors of the eco...Here's <a href="http://gulfnews.com/business/investment/politics-set-to-boost-pakistan-1.1153474" rel="nofollow">Gulf News</a> on various sectors of the economy in Pakistan:<br /><br /><i> Naveed Vakil, director, research and business development, AKD Securities:<br /><br />Oil and Gas Development Company Limited (OGDCL): Dollar-based returns and a firm oil price outlook should keep returns high, especially as key development projects come online and the monetisation of recent finds is fast-tracked. <br /><br />Pakistan Oil Fields (POL): [Its performance is closely linked] to international oil prices that are likely to remain firm in the near term as demand growth recovers, especially from China. POL also offers exposure to Pakistan’s Kohat Basin which is where there has recently been a string of discoveries have been high impact.<br /><br />Pakistan Telecommunication Company Limited (PTCL): PTCL should post strong earnings growth this year, due to higher margins following the implementation of higher international incoming call rates. Infrastructure is being installed to curtail grey incoming international traffic, which should support legitimate volume as well.<br /><br />Lucky Cement: Pakistan’s largest cement company should continue benefitting from a rise in domestic consumption led by development spending ahead of the elections. It should benefit from high margins as domestic cement prices remain firm while coal costs remain low. <br /><br />Furqan Punjani, deputy head of equity research at BMA Capital Management Limited:<br /><br />Oil and gas<br /><br />Robust oil prices coupled with [increasing production volumes should] keep the oil and gas exploration and production sector in the limelight in next few years. Revenue streams linked to the dollar and local currency depreciation would also help augment bottom-lines in the sector. We prefer Pakistan Oilfields and Pakistan Petroleum because of their better dividend yields.<br /><br />Textiles<br /><br />Based on better exports prospects and higher profit margins (on low cost cotton) as well as a promotion in the gas allocation list by the government, the textile sector has made it onto our list of top investment ideas for 2013. Nishat Mills is the biggest integrated textile unit in Pakistan and will continue to benefit from its well-diversified core operations and the good potential of its portfolio holdings. <br /><br />Fertilizer<br /><br />We believe the fertilizer sector presents an ideal mix of defensive and high-growth plays for 2013. Our top pick in the sector is ENGRO. <br /><br />Cement<br /><br />Cement prices are currently at an all-time high of Rs440(Dh16.27) a bag. We like companies that can magnify top line growth into the bottom-line, thanks to the deleveraging of their balance sheet. This makes DGKC.PA our top pick in the sector. <br /><br />Energy<br /><br />Pakistan is an energy deficit country and the entire production of independent power producers (IPPs) is consumed on any given day. Moreover, with higher and regular subsidies from the government translating into better cash inflows, the sector has once again come into limelight. Furthermore, as revenues and profits are linked to the dollar, the depreciating Pakistani rupee will also benefit this sector. We prefer Hub Power Company, the largest private sector power producer of Pakistan, because of its higher dividend yields and stable bottom-line. <br /><br />Commercial banks<br /><br />The Central bank of Pakistan has reduced the base [interest] rate by 450 basis points in the last 24 months. This has reduced the net interest margins of the entire banking sector, barring a few large banks that have the ability to reduce the rates provided to their depositors and keep attracting fresh deposits at lower rates. United Bank Limited is one of them. We prefer UBL [because] of their ability to grow their deposits by double digits at lower cost, coupled with their greater exposure to high yielding long term government bonds. Furthermore their quarterly payout will continue to lure value investors to the bank. ....</i><br /><br />http://gulfnews.com/business/investment/politics-set-to-boost-pakistan-1.1153474Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-73958036307205805302013-02-15T08:30:28.023-08:002013-02-15T08:30:28.023-08:00Here's Emirates 24-7 report on a massive prope...Here's <a href="http://www.emirates247.com/business/economy-finance/abu-dhabi-group-property-tycoon-to-build-world-s-tallest-building-in-pakistan-2013-02-15-1.495174" rel="nofollow">Emirates 24-7</a> report on a massive property investment deal between Abu Dhabi Group and Malik Riaz:<br /><br /><i>UAE’s Abu Dhabi Group and Pakistani real estate tycoon Malik Riaz on Friday signed a deal to invest $45 billion (Dh165.15 billion) in Pakistan including building the world’s tallest building in Karachi.<br /><br />Pakistan’s news channel Geo reported today that $35 billion (Dh165.15 billion) will be pumped in Sindh province while the rest will be invested in Lahore and Islamabad.<br /><br />Under the deal, Sports City, International City, Media City, Educational and Medical City will be built in Pakistan’s financial capital. The news channel said that world’s Seven Wonders will also be built as part of the project.<br /><br />The deal is expected to generate over 2.5 million jobs in Pakistan.<br /><br />The channel, however, didn’t reveal the time for the completion of the project.</i><br /><br />http://www.emirates247.com/business/economy-finance/abu-dhabi-group-property-tycoon-to-build-world-s-tallest-building-in-pakistan-2013-02-15-1.495174Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-25716175070042298372013-02-03T09:46:27.523-08:002013-02-03T09:46:27.523-08:00Whoa there, Cowboy!
Textile exports more than...
...Whoa there, Cowboy!<br /><br />Textile exports more than...<br />40 Billion USD!<br /><br />http://alturl.com/tbhuc<br /><br />Fine print.Hopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-50466872007226528942013-01-27T18:54:03.227-08:002013-01-27T18:54:03.227-08:00thought this might interest you since it agrees wi... thought this might interest you since it agrees with some of the things you have been saying on your blog:<br /><br /><br /><i>On my way from Pakistan to Washington, I had a chance meeting with a Pakistani economist of considerable repute. We met at Karachi airport’s departure lounge. I have known him for years and have highly valued his work on the Pakistani economy. He surprised me by suggesting that the country was in a much better shape than suggested by some of my writings and those of several others who thought like me. He was of the view that the situation did not warrant the kind of pessimism reflected in our assessments. “Macro numbers may look bad but the real economy is doing reasonably well — in fact very well”, he said. ...<br />-----------<br />He told me of a recent visit he and some other economists had taken to Faisalabad — arguably the hub of Punjab’s industrial economy — and came across extraordinary enthusiasm about the future of the country and its economy. “The industrialists and traders we met at the city’s Chamber of Commerce were looking forward to the opening of the economy with India. There was nothing but good in that for them and the country”. But it was not only the entrepreneurs operating in large urban centres of the country that look upon Pakistan’s economic future with hope. “The countryside was booming with consumer durables being sold at rates never seen before”, said my economist friend. “I have traveled up and down the country in recent months and seen with my own eyes what numbers don’t tell. The recent commodity boom in the international market place has done wonders for the Pakistani producers in the countryside and also for rural consumers. There is palpable prosperity in the country’s towns and villages”.<br />----------<br />For the last five years, Pakistan has had a representative form of government but the representatives people have sent to the various legislative assembles have served mostly vested interests. Would that change? The tens of thousands of people who followed the preacher-politician Tahirul Qadri to Islamabad did so in the hope of widening the system by including those who are prepared to work for others.</i><br /><br />http://tribune.com.pk/story/499385/on-the-eve-of-the-third-real-election/HopeWins Juniornoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-83493642831387347292013-01-27T08:45:48.601-08:002013-01-27T08:45:48.601-08:00Here's PakistanToday on politics driving econo...Here's <a href="http://www.pakistantoday.com.pk/2013/01/27/news/profit/political-economy-drives-investor-sentiment-at-booming-equity-market/" rel="nofollow">PakistanToday</a> on politics driving economy and stocks in Pakistan:<br /><br /><i>KARACHI - Among other factors, the political activity near the looming general elections in the country is calling the shots when it comes to Karachi Stock Exchange (KSE).<br />Last Thursday witnessed the KSE climbing to a new high with the benchmark KSE-100 share index peaking beyond 17,000 points level.<br />The market observers attributed the historic positive to the politico-economic factors developing on the country’s internal and external fronts. The KSE 100-share index gained 148 points to close at 17,056.36 points compared to Wednesday’s 16,908.67 points. The intraday high and low the index hit on the day were recorded at 17,067.58 and 16,908.67 respectively, the closing point of the previous day.<br />Of the total 353 scrips traded, 205 gained, 123 lost and 25 saw no change in their price. The trading volumes were higher to climb to 271 million shares as against 218 million of the previous session. The trading value also rose to Rs 6.90 billion from Rs 5.49 billion on Wednesday. The market capital grew beyond Rs 4.263 trillion compared to Rs 4.22 trillion a day earlier.<br />The free float KSE-30 index also set in the green zone and gained 125 points to last at 13,931.66 points against 13,806.38 points of the previous trading session.<br />The day marked mostly the second and third tier stocks leading the volumes with Fauji Cement, the volume leader, counting its traded shares as 60.334 million, gaining Re 32 paisas on each of its stakes that were priced at Rs 7.48 in the opening and Rs 7.80 at closing.<br />Turnover on the future market also headed northward to stand at 22.983 million shares compared to Wednesday’s 22.172 million.<br />According to stocks analysts, the result announcement session had led other positives to help the index peak to the historic high.<br />Muhammad Sohail, a broker and senior analyst at the KSE, said the announcement of “good” corporate results was the leading attributable factor for Thursday’s stocks market boost.<br />“Good corporate results, foreign buying and a relative calm on local political front helped the equities to cross the 17000 mark,” Sohail, the Chief Executive Officer of Topline Securities, told Pakistan Today.<br />Another equity analyst Ashen Mehanti, a director at Arif Habib Securities, said the rate-cut by the central bank in its Wednesday’s T-bill auction had coupled with the favorable announcement factor.<br />“Stocks closed at record high amid rising trades in the earnings announcements session at KSE after the SBP slashes yield on T-bills,” the analyst said.<br />Other catalysts Mehanti cited were the investors’ hope for a possible cut in the SBP discount rate to be announced next month, rising local cement prices, easing political uncertainty and renewed foreign interest. The abovementioned factors, the analyst said “played a catalyst role in bullish close in stocks across the board at KSE ahead of major earning announcements due next week”. </i><br /><br />http://www.pakistantoday.com.pk/2013/01/27/news/profit/political-economy-drives-investor-sentiment-at-booming-equity-market/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-72857376821874007752013-01-25T19:20:58.632-08:002013-01-25T19:20:58.632-08:00HWJ: "See Group B (Textiles & Related) in...HWJ: "See Group B (Textiles & Related) in the last two columns for Jul-Dec comparison.It clearly shows a DECREASE.Well? You have something to say?"<br /><br />Look at the P in parentheses indicating "provisional" data in the Excel spreadsheet in your link. The data in the data in the more recent Fiber2Fashion report that I shared is ACTUAL, not PROVISIONAL.<br /><br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-4755440069862343622013-01-25T19:20:37.990-08:002013-01-25T19:20:37.990-08:00^^RH: "But do you know that Pak textile expor...^^RH: "But do you know that Pak textile exports in July-Dec 2012 rose 8.55% in spite of the problems the article lists? "<br /><br />Here's an excerpt from Fiber2Fashion...<br />----<br /><br />You believe the muddled-media too easily. You should check everything before relying on it.<br /><br />Here is the OFFICIAL data from State Bank of Pakistan:<br />http://www.sbp.org.pk/ecodata/Export_Receipts_by_Commodity.xls<br /><br />See Group B (Textiles & Related) in the last two columns for Jul-Dec comparison.<br /><br />It clearly shows a DECREASE.<br /><br />Well? You have something to say?<br /><br />HopeWins Juniornoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-82830012067390495782013-01-25T16:51:58.558-08:002013-01-25T16:51:58.558-08:00HWJ: "Do you disagree with the gist of the ar...HWJ: "Do you disagree with the gist of the article? Have any of the problems described been solved in the 4 months since this article was published?"<br /><br />The FT article says as follows: <br /><br />><i>A senior member of the All Pakistan Textiles Manufacturing Association (APTMA) who spoke to beyondbrics on condition of anonymity said; “Interest rate cuts of the kind we have seen in Pakistan bear no relevance to our economy. This summer (2012), many of us had to deal with sharp production losses because there was no electricity”.</i><br /><br />But do you know that Pak textile exports in July-Dec 2012 rose 8.55% in spite of the problems the article lists? <br /><br />Here's an excerpt from <a href="http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=120341" rel="nofollow">Fiber2Fashion</a>:<br /><br /><i> With a year-on-year rise of 8.55 percent, Pakistan’s textile and garment exports for first half of the current fiscal increased to US$ 6.458 billion from US$ 5.590 billion worth of exports made during the corresponding period of last year.<br /> <br />According to Pakistan Bureau of Statistics (PBS), exports for December 2012 grew to US$ 1.058 billion, compared to exports of US$ 1.009 billion in December 2011.<br /> <br />Product-wise, cotton yarn exports grew by 38 percent year-on-year during July-December 2012, while that of cotton cloth by 12.31 percent, yarn by 53.94 percent, towels by 10.98 percent, tents by 25.39 percent, readymade garments by 13.29 percent and other textile materials by 62.95 percent.</i><br /><br />http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=120341Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-3465892609754237902013-01-25T15:16:46.471-08:002013-01-25T15:16:46.471-08:00^^RH: "Karachi Bourse closes over 17,000 poin...^^RH: "Karachi Bourse closes over 17,000 points first time ever, reports Dawn...."<br />-----<br /><br />Here is an article on the KSE by Farhan Bukhari that was published 4 months ago in The Financial Times:<br />http://alturl.com/uq894<br /><br />Do you disagree with the gist of the article? Have any of the problems described been solved in the 4 months since this article was published?<br /><br />Yes? What are your views?Hopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-50995444977365081612013-01-25T11:03:13.267-08:002013-01-25T11:03:13.267-08:00Karachi Bourse closes over 17,000 points first tim...Karachi Bourse closes over 17,000 points first time ever, reports <a href="http://dawn.com/2013/01/25/kse-index-breaks-17000-barrier/" rel="nofollow">Dawn</a>:<br /><br /><i>KARACHI: Stocks roared ahead at the Karachi Stock Exchange with the KSE-100 index quite easily breaking the psychological barrier of 17,000 on Thursday.<br /><br />The benchmark settled at 17,056.36 points, representing gain of 147.69 points.<br /><br />The market capitalisation-based KSE-30 index jumped 125.28 points to 13,931.66 points.<br /><br />Figures released by the National Clearing Company of Pakistan showed that mutual funds were major buyers with net purchases worth $6.03 million. Foreign investors sold equity in the net sum of $0.76 million.<br /><br />Turnover galloped to 271 million shares on Thursday, against 218 million shares traded the earlier day with the trading value increasing to Rs6.9 billion, from Rs5.5 billion.<br /><br />Market capitalisation was up to Rs4.263 trillion, from Rs4.223 trillion.<br /><br />In all, 353 stocks came up for trading with 205 gainers; 123 losers and 25 ending at the previous values.<br /><br />Equity dealer, Samar Iqbal at Topline Securities observed that the Karachi bourse managed to close above psychological mark of 17,000.<br /><br />Institutional buying and good corporate results helped equity prices to improve by approximately one per cent.<br /><br />More than expected earnings announcement by Engro Foods helped the market sentiment.<br /><br />Mid cap cement stocks performed well as investors expecting healthy profits for the quarter ending December.<br /><br />Ahsan Mehanti at Arif Habib Corp stated that the stocks had closed at record high amid rising trades in the earnings announcements session at KSE after SBP slashed yield on T-bills.<br /><br />Other reasons listed for the bullish trend at the market were investor hopes for policy rate cut in monetary announcement due next month, rising local cement prices, easing political uncertainty and renewed foreign interest in Pakistani equities.<br /><br />Hasnain Asghar Ali at Escorts Capital commented that fresh inflows in E&P stocks took along the benchmark for yet another historic session.<br /><br />The heavy weight E&P stocks led the bullish run and were well supported by the cement and textiles. Also better than expected earnings of EFood invited renewed buying interest as the company reported record growth in earnings.<br /><br />The news flows regarding Secondary Public Offering of PPL, settlement of property dispute with Etisalaat and issuance of 3G license stayed the driving factor for the local equities.<br /><br />Judicial hearings, law and order concerns and volatility on political front continued to suggest caution.<br /><br />On Thursday’s trading, Unilever Food posted the highest gain for the day, in the sum of Rs105 to Rs3905 and was followed by Bata (Pak) which rose by Rs41.05 to Rs1355.<br /><br />On the other side, UniLever Pak posted the heaviest loss of Rs35.16 to Rs9914.83 and Sanofi-Aventis Pak declined by Rs9 to Rs316.<br /><br />The 10-top active list was again dominated by the sideboard items. Fauji Cement rose by 32 paisa to Rs7.80 on a huge volume of 60m shares.<br /><br />It was followed by Maple Leaf Cement, which hit the ‘upper circuit’ with a gain of Re1 to end at Rs17.86 on 23m shares.<br /><br />Byco Petroleum added 45 paisa to close at Rs14.37 on 20m shares; Jah.Sidd.Co was up by19 paisa to s16.53 on 14m shares; Fatima Fertilizer Company edged higher by 8 paisa to Rs25.88 on13m shares; PTCL was up by 46 paisa to Rs17.82 on12m shares; Lafarge Pakistan was firm by 16 paisa to Rs5.46 on 8m shares; Engro Foods, which declared financial figures on Thursday, was greeted warmly by investors with the price of stock jumping by Rs3.83 to Rs100.82.<br /><br />TRG was the only scrip among the volume leaders which shed 7 paisa to s7.01 on 6m shares and KESC added 19 paisa to its overnight value and closed at Rs5.84 on 6m shares.</i><br /><br />http://dawn.com/2013/01/25/kse-index-breaks-17000-barrier/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-46895315828414732212013-01-23T22:28:33.309-08:002013-01-23T22:28:33.309-08:00Here's an ET story on new pharma investment in...Here's an <a href="http://tribune.com.pk/story/497833/broadening-its-presence-reckitt-benckiser-may-invest-up-to-15m-in-pakistan/" rel="nofollow">ET story</a> on new pharma investment in Pakistan:<br /><br /><i>KARACHI: <br /><br />Reckitt Benckiser (RB) Pakistan will invest between $5 million to $15 million within the next three years in the country, Salvatore Caizzone, executive vice president of Reckitt Benckiser Russia, Middle East and Africa region told The Express Tribune.<br /><br />Talking to this reporter during an interview on Tuesday, Caizzone said RB Pakistan is going to set up a new factory in Karachi, regardless of the persistent energy crisis in the country. “Decisions like these are not taken for the short term. We’re investing heavily in Pakistan because we have a positive outlook on this country,” he said.<br /><br />Refusing to reveal the revenue figures or the profit margins of RB Pakistan, Caizzone said that emerging markets contribute 42% to RB’s net revenue globally: their share is expected to increase to up to 50% by 2016. “Without stating the actual statistics, all I can say is that, for us, Pakistan is one of the top 10 markets in the emerging economies,” he said.<br /><br />RB Pakistan has introduced 12 brands in Pakistan, in the categories of healthcare, hygiene and homecare. Its most recognisable products include Strepsils throat lozenges, Disprin painkillers, Dettol disinfectants, Mortein insecticides, Harpic household cleaners and Cherry Blossom polishes.<br /><br />“Although we don’t reveal our actual growth numbers, we have been growing at the higher end of double digits in Pakistan. I know that some of my competitors will be very happy to grow at 7-8%, but we’d be extremely unhappy if this happens to us,” he said. He persistently refused to state the actual growth rate of RB Pakistan.<br /><br />However, we found out through our sources that the combined annual growth rate of RB Pakistan for the last three years has been 16.8%. Its total revenues increased from Rs4.5 billion in 2009 to Rs7.2 billion in 2012, our sources said.<br /><br />Caizzone says brands falling in the healthcare segment are the top priority for RB, followed by hygiene and homecare brands. The largest chunk of growth in Pakistan has come from the hygiene segment, he noted; in comparison, the company’s growth at the global level is divided equally between healthcare and hygiene segments. “We have a very large business of hygiene brands in Pakistan, which is driven particularly by Dettol, Harpic and Mortein. But we have very few brands in the homecare segment,” he remarked....</i><br /><br />http://tribune.com.pk/story/497833/broadening-its-presence-reckitt-benckiser-may-invest-up-to-15m-in-pakistan/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-69531583687467494642013-01-22T10:59:49.034-08:002013-01-22T10:59:49.034-08:00^^RH: "The author may or may not, but Dean Kh...^^RH: "The author may or may not, but Dean Khan quoted in the article does.."<br />----<br /><br />Here is your hero "Dean Khan" on the disaster that is the macroeconomic foundation of our economy---<br /><br />Jan 22, 2013: http://alturl.com/pnox5<br /><br />QUOTE from Dr. Ashfaque Khan: "As to the performance of the SBP and its governors, there can be no two opinions that it has been disappointing. Rather than pursuing a prudent monetary policy, they pursued a ‘ballot monetary policy’. While the government and its economic team have systematically destroyed the economy of Pakistan, the SBP has become a partner in crime by relinquishing its responsibilities as a regulatory body."<br /><br />Well? Where are those rose-tinted glasses?Hopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-42842008257718016262013-01-19T21:32:50.087-08:002013-01-19T21:32:50.087-08:00Here's an ET report on Pakistan's exclusio...Here's an <a href="http://tribune.com.pk/story/495921/why-should-we-be-left-out-of-the-club/" rel="nofollow">ET report</a> on Pakistan's exclusion from Morgan Stanley's Emerging Market Index:<br /><br /><i>The MSCI Emerging Markets Index is a free float-adjusted market capitalisation index, which measures equity market performance of emerging markets that include Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. With 821 constituents, the index covers approximately 85% of the free float-adjusted market capitalisation in each country.<br /><br />Pakistan was part of the Emerging Markets Index for 15 years, but MSCI dropped the country in December 2008. According to Askari, MSCI did not remove Pakistan because of any quantitative changes: rather, this was done solely because of the imposition of the floor rule by KSE authorities that year, which shut the stock market for over three months in August 2008.<br /><br />“We should keep in mind that the Czech Republic and Peru have three companies each, while Hungary and Morocco have four companies each which meet the requirements of the MSCI Emerging Markets Index,” Askari said, emphasising the fact that in terms of the number of eligible companies, Pakistan is ahead of these four countries.<br /><br />“They have not given us any logical reason yet. They keep saying we’re reviewing your case, but there hasn’t been any definite answer. Their reluctance is a mystery to me,” Askari added.<br /><br />The MSCI communications team did not respond to repeated queries from The Express Tribune.<br /><br />According to the MSCI Global Investable Market Indices Methodology issued in March 2011, a country must have at least three companies with full market capitalisation of $876 million, float market capitalisation of $438 million and 15% Annualised Traded Value Ratio – a liquidity measure – to become part of the MSCI Emerging Markets Index. Five Pakistani companies currently fulfil these requirements.<br /><br />As for MSCI’s market accessibility criteria, capital market regulations in Pakistan do not discriminate between local and foreign investors, as the latter have no special registration and/or licencing requirement. Similarly, foreign investors may acquire up to 100% shares in a listed company through the secondary market.<br /><br />As for the ease of capital inflows/outflows, which is another criterion for a country’s inclusion into the MSCI Emerging Markets Index, the regulatory framework in Pakistan allows foreign investors to trade freely in equities and debt instruments, he said. There are no restrictions on foreign investors taking their capital out of the country, he pointed out.<br /><br />“The Securities and Exchange Commission of Pakistan has implemented necessary measures to ensure that market discipline and integrity are not compromised in the future by ad hoc decision-making, such as floor rules, by the country’s stock exchanges,” Askari added.<br /><br />While mentioning that the returns on the KSE-100 index were 49.3% in rupee terms and 37% in dollar terms in 2012, Askari said MSCI must review its decision to keep Pakistan out of its Emerging Markets Index.</i><br /><br />http://tribune.com.pk/story/495921/why-should-we-be-left-out-of-the-club/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-1844949511518205092013-01-19T10:24:49.976-08:002013-01-19T10:24:49.976-08:00HWJ: "Does the author even know what "sa...HWJ: "Does the author even know what "savings" really are in the macroeconomic sense?"<br /><br />The author may or may not, but Dean Khan quoted in the article does. <br /><br />Read the piece carefully to understand how people are investing their savings. <br /><br />"Nadeem is looking forward to his payout so he can put a new roof on his house."<br /><br />"Now he’s (refering to Ali) a few months away from getting 400,000 rupees ($4,100) from a savings group of 16 shopkeepers into which he’s been paying 1,000 rupees a day for almost a year. He plans to put a down payment on an apartment."<br /><br />Another key point that Mangi misses is that many Pakistanis avoid banks because they consider the interest-based banking un-Islamic. This is the reason why Islamic banking is growing rapidly in Pakistan. Here's an excerpt of a recent piece in The News:<br /><br />LAHORE: The share of Islamic banking in Pakistan has increased to 8.2 percent. It now has 1,000 branches, 650 of which are operated by dedicated Shariah compliant Islamic banks, according to an Islamic banking official.<br /><br /> <br /><br />According to Global Islamic Finance Report 2012, the size of the Islamic banking industry has grown to $1.35 trillion with the annual growth rate of more than 20 percent. Globally the Islamic financial industry now comprises 430 Islamic banks and financial institutions and around 191 conventional banks with Islamic banking windows operating in more than 75 countries, it said.<br /><br /> <br /><br />The share of Islamic banking in Pakistan has reached 8.2 percent in assets and 8.9 percent in deposits, said Shafqat Ahmad, country head of Al-Baraka Islamic Bank.<br /><br /> <br /><br />“Our Shariah experts have worked relentlessly to develop asset-based products. Five years ago, 99 percent of the Islamic banking transactions were in Muharaba and there were no asset-based products,” he said. Today, the share of Muharaba-based transactions has decline to 45 percent and 55 percent transactions are in asset-based products such as Ijara, Istasna, Sukuk and Musharqa, he added.<br /><br /> <br /><br />Ahmad said that Islamic finance, with its roots in a moral economic model that supports productive economic activity and discourages excessive leveraging and imprudent risk taking, can play an important role in rebuilding the financial system.<br /><br /> <br /><br />Investment financing has now peeped into Islamic banking, he added. “Islamic banks are now financing large projects such as fertilisers, etc. We are still behind Malaysia and some other Islamic countries in the Middle East where Sukuk market is flourishing and crowding out conventional banking products,” he said, adding that experts predict that the asset-based Islamic banking would largely replace conventional banking in these countries.<br /><br /> <br /><br />“Entrepreneurs in Pakistan are turning towards Islamic banking in large numbers,” said Ahmad, adding that they may change from one Islamic bank to another but they do not go back to conventional banks once they adopt Islamic mode of banking.<br /><br />http://www.thenews.com.pk/Todays-News-3-149919-Islamic-banking-share-rises-to-82pc<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-88220955850497164592013-01-19T08:55:17.522-08:002013-01-19T08:55:17.522-08:00^^RH: "Here's Bloomberg on informal savin...^^RH: "Here's Bloomberg on informal savings and investment in Pakistan...<br /><br />The bottom line: The savings rate in Pakistan is probably higher than the official 10.7 percent, thanks to the near-universal use of savings circles"<br />-----<br /><br />TWO QUESTIONS--<br /><br />1) See Table 1.6 on Page 13:<br />http://finance.gov.pk/survey/chapter_12/01-GrowthAndStabilization.pdf<br /><br />Clearly, our domestic savings rate was about 16% in 2006. By 2012, however, it had COLLAPSED to a pathetic 9%.<br /><br />How does this "informal savings circles" theory account for this COLLAPSE in the "formal" savings rates? Have people STOPPED using "formal" savings channels?<br /><br />2) Assume that Tahira Bibi gets togther with 11 of her friends to form a pool. Each of them "saves" 500 PKR a month to put into the pool. Each month, 1 of them uses the proceeds of the pool to buy a 6000 PKR microwave (picture shown). <br />QUESTION: How much "savings" have these people added to the Domestic Savings of Pakistan in the first month by vitrue of their "pool"? How much will they add in the second month? In the nth month? At the end of the year? <br /><br />Does the author even know what "savings" really are in the macroeconomic sense? If one person consumes what another person has saved, what effect does it have on the macroeconomic savings rate of Pakistan as a whole? <br /><br />Yes? Any answers? Hopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-92079340247519387232013-01-19T08:38:38.729-08:002013-01-19T08:38:38.729-08:00Dr. Haq,
Please change the Business week link in ...Dr. Haq,<br /><br />Please change the Business week link in the comment above. Or at least post this comment below yours so that readers can also access the actual article with the picture of Tahira, her son and her new Microwave.<br /><br />http://www.businessweek.com/articles/2013-01-17/in-pakistan-savings-circles-beat-banks<br /><br />Thank you.Hopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.com