Pakistan’s stock market is witnessing a red-hot surge as foreign investors flock to the country amid easing financial & political tensions

Pakistan's stocks emerge as top choice in emerging markets

Pakistan's surging stock market rally received a significant boost as foreign investors return, contributing to a 50 per cent surge in the benchmark KSE-100 Index since late June. <o:p></o:p>

The nation's stock market is now the world's second-best performer in this period, following Argentina. Foreign traders, encouraged by signs of stability, have injected $26.3 million into Pakistani stocks in November, marking the highest monthly total in over four years, as per exchange data compiled by Bloomberg.<o:p></o:p>

The rally is fuelled by positive developments, including Pakistan's ability to secure a loan agreement with the International Monetary Fund in July, averting a potential default. With national elections scheduled for February, the country is experiencing a reduction in political and economic uncertainty. <o:p></o:p>

Inflation, a key concern, has also shown signs of cooling, providing the central bank with some flexibility after implementing interest rate hikes over the past two years.<o:p></o:p>

Bloomberg cited Mattias Martinsson, the Chief Information Officer at Tundra Fonder AB, a Stockholm-based frontier market investor, who noted that foreign investors are factoring in diminishing political and economic uncertainty. <o:p></o:p>

"What they see now is that there appears to have come into place a sort of political stability, at the same time as economic indicators are improving and there is a strong likelihood of significant cuts in the policy rate during 2024," Bloomberg quoted him as saying.<o:p></o:p>

While the stock rally continues to attract bullish sentiment, Ali Khalpey, Head of Equity Capital Markets at EFG Hermes in Dubai, highlights Pakistan's attractiveness compared to other emerging markets. He anticipates foreign cash inflow to persist, emphasising that Pakistani stocks like Lucky Cement Ltd., United Bank Ltd., and Habib Bank Ltd. are appealing with their cost-effectiveness, high quality, and attractive dividend yields.<o:p></o:p>

Simultaneously, Pakistan's sovereign dollar bonds are delivering robust returns, among the best in emerging markets this month, approaching 15 per cent total returns. On Wednesday, these bonds outperformed their counterparts in developing nations.<o:p></o:p>

(With inputs from Bloomberg)<o:p></o:p>

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Pakistan's surging stock market rally received a significant boost as foreign investors return, contributing to a 50 per cent surge in the benchmark KSE-100 Index since late June.

Pakistan's surging stock market rally received a significant boost as foreign investors return, contributing to a 50 per cent surge in the benchmark KSE-100 Index since late June. The nation's stock market is now the world's second-best performer in this period, following Argentina. Foreign traders, encouraged by signs of stability, have injected $26.3 million into Pakistani stocks in November, marking the highest monthly total in over four years, as per exchange data compiled by Bloomberg. The rally is fuelled by positive developments, including Pakistan's ability to secure a loan agreement with the International Monetary Fund in July, averting a potential default. With national elections scheduled for February, the country is experiencing a reduction in political and economic uncertainty. Inflation, a key concern, has also shown signs of cooling, providing the central bank with some flexibility after implementing interest rate hikes over the past two years. Bloomberg cited Mattias Martinsson, the Chief Information Officer at Tundra Fonder AB, a Stockholm-based frontier market investor, who noted that foreign investors are factoring in diminishing political and economic uncertainty. "What they see now is that there appears to have come into place a sort of political stability, at the same time as economic indicators are improving and there is a strong likelihood of significant cuts in the policy rate during 2024," Bloomberg quoted him as saying. While the stock rally continues to attract bullish sentiment, Ali Khalpey, Head of Equity Capital Markets at EFG Hermes in Dubai, highlights Pakistan's attractiveness compared to other emerging markets. He anticipates foreign cash inflow to persist, emphasising that Pakistani stocks like Lucky Cement Ltd., United Bank Ltd., and Habib Bank Ltd. are appealing with their cost-effectiveness, high quality, and attractive dividend yields. Simultaneously, Pakistan's sovereign dollar bonds are delivering robust returns, among the best in emerging markets this month, approaching 15 per cent total returns. On Wednesday, these bonds outperformed their counterparts in developing nations. (With inputs from Bloomberg) WATCH WION LIVE HERE

Pakistan's stock rally ignited by foreign investors hits four-year high

Pakistani stocks are soaring, improved security is fuelling economic growth and the South Asian nation will be upgraded to &quot;emerging market&quot; status by index provider MSCI. 
 
But for Ali Saigol, co-founder of a private equity firm, convincing foreign investors to overlook the country&#39;s violent past and bet on its economy remains a hard sell. He said pitches often encountered the same problem: Pakistan&#39;s image. 
 
After a turbulent decade in which Islamist militants staged frequent gun and bomb attacks on cities, some investors still refuse to visit Pakistan and insist on meeting Saigol in Dubai. 
 
&quot;Most people have never been to Pakistan. It&#39;s a huge problem,&quot; said Saigol, sipping a cappuccino in an upscale cafe in Islamabad, Pakistan&#39;s leafy, affluent capital. 
 
&quot;When people visit Pakistan, they see it&#39;s actually opposite of what they expect.&quot; 
 
Saigol&#39;s frustration goes to the heart of Pakistan&#39;s struggle to attract foreign investment and boost economic growth from 4.7 per cent towards above 6 per cent, the minimum level experts say is needed to absorb new entrants into the job market in a nation of 190 million people. 
 
Pakistan&#39;s $250 billion economy is growing at the fastest pace in eight years but only attracted $1 billion in foreign direct investment (FDI) in the nine months to April. FDI inflows into Indonesia, by comparison, hit $29 billion last year. 
 
Many businesses in Pakistan have flourished since 2014, when a military offensive against Islamist groups improved security. 
 
Violence is down overall, although deadly attacks are not uncommon. In late March, more than 60, mostly women and children, were killed by a suicide bomber in Lahore. 
 
In major cities, car sales are rising and shopping malls are sprouting to cater for an expanding middle class. 
 
A crime crackdown in Karachi, Pakistan&#39;s financial hub of 20 million people, has helped spur a real estate boom and new, upmarket seaside restaurants and cafes are overflowing. 
 
Perceptions take time to change 
 
The progress is in stark contrast to economic instability during the past decade, when the stock market collapsed and Pakistani Taliban militants held territory 100km from Islamabad. 
 
The militants have since been contained in small pockets in mountainous areas near the Afghan border and the country&#39;s stock market is Asia&#39;s best performing index in 2016. 
 
&quot;Perceptions change with a lag. Our reality has changed, but it takes a little while for investors to realise that,&quot; said Miftah Ismail, an adviser to the prime minister tasked with bringing foreign investment into Pakistan. 
 
Ismail said he had expected more money to flow from abroad by now, and concedes investors need convincing that Pakistan &quot;will not revert to type&quot; by running large deficits and facing foreign exchange crises. 
 
Investors will also have to be convinced that political risks are easing in a nuclear-armed nation surrounded by countries with whom it has unstable relations, including arch-foe India. 
 
Yet there are tentative signs foreign companies are eyeing Pakistan&#39;s fast-growing consumer market. 
 
Carmakers Renault-Nissan are considering a plant in Pakistan, and Suzuki, which already has a presence, said it may invest $460 million for a new factory. 
 
A Dutch dairy cooperative, FrieslandCampina International Holding, in March announced plans to buy a stake in Pakistani food giant Engro Foods, in a deal estimated at $460 million. 
 
Indicators &quot;flashing green&quot; 
 
Omar Hamid, head of Asia Pacific country risk research for IHS, said interest in Pakistan has soared this year by IHS corporate clients seeking country and political risk analysis. 
 
&quot;It&#39;s a massive consumer market and the economic indicators are flashing green for many international companies,&quot; he said. 
 
Pakistan&#39;s interest rates are at 42-year lows, inflation has been tamed at about 3 per cent, the currency is stable and foreign exchange reserves have jumped to all-time highs. 
 
The economy is also expected to receive a shot in the arm from the China-Pakistan Economic Corridor (CPEC), a $46 billion roads and energy project. 
 
Much of the money is earmarked for power stations to ease chronic electricity shortages which hobble business and investment. 
 
Prime Minister Nawaz Sharif&#39;s government is so confident about the economy that it plans to end the IMF&#39;s $6.7 billion financial assistance programme in September. Analysts say this could prove a risky move if oil prices spike. 
 
In Karachi, the business community hopes MSCI&#39;s upgrade of Pakistan will herald a return of foreign investors who fled in anger in 2008 when the bourse imposed a floor and trapped them in a collapsing market for three months. 
 
&quot;What happen in 2008 could never happen again,&quot; said Haroon Askari, deputy director of the Pakistan Stock Exchange. 
 
Pakistan&#39;s main benchmark index has risen by more than 500 per cent since the start of 2009, but is still considered cheap by some, trading at multiples below other emerging markets due to political and security risks associated with Pakistan. 
 
Saigol, founding partner of Baltoro Capital, which manages a new $48.5 million private equity fund, said foreign investors who finally take a serious look at Pakistan are often surprised. 
 
&quot;They say they have never seen a country or an economy the size of Pakistan with so little coverage, so under the radar.&quot; 
(Reuters)

A crime crackdown in Karachi has helped spur a real estate boom but getting foreign investments has been tough

Pakistani stocks are soaring, improved security is fuelling economic growth and the South Asian nation will be upgraded to "emerging market" status by index provider MSCI. But for Ali Saigol, co-founder of a private equity firm, convincing foreign investors to overlook the country's violent past and bet on its economy remains a hard sell. He said pitches often encountered the same problem: Pakistan's image. After a turbulent decade in which Islamist militants staged frequent gun and bomb attacks on cities, some investors still refuse to visit Pakistan and insist on meeting Saigol in Dubai. "Most people have never been to Pakistan. It's a huge problem," said Saigol, sipping a cappuccino in an upscale cafe in Islamabad, Pakistan's leafy, affluent capital. "When people visit Pakistan, they see it's actually opposite of what they expect." Saigol's frustration goes to the heart of Pakistan's struggle to attract foreign investment and boost economic growth from 4.7 per cent towards above 6 per cent, the minimum level experts say is needed to absorb new entrants into the job market in a nation of 190 million people. Pakistan's $250 billion economy is growing at the fastest pace in eight years but only attracted $1 billion in foreign direct investment (FDI) in the nine months to April. FDI inflows into Indonesia, by comparison, hit $29 billion last year. Many businesses in Pakistan have flourished since 2014, when a military offensive against Islamist groups improved security. Violence is down overall, although deadly attacks are not uncommon. In late March, more than 60, mostly women and children, were killed by a suicide bomber in Lahore. In major cities, car sales are rising and shopping malls are sprouting to cater for an expanding middle class. A crime crackdown in Karachi, Pakistan's financial hub of 20 million people, has helped spur a real estate boom and new, upmarket seaside restaurants and cafes are overflowing. Perceptions take time to change The progress is in stark contrast to economic instability during the past decade, when the stock market collapsed and Pakistani Taliban militants held territory 100km from Islamabad. The militants have since been contained in small pockets in mountainous areas near the Afghan border and the country's stock market is Asia's best performing index in 2016. "Perceptions change with a lag. Our reality has changed, but it takes a little while for investors to realise that," said Miftah Ismail, an adviser to the prime minister tasked with bringing foreign investment into Pakistan. Ismail said he had expected more money to flow from abroad by now, and concedes investors need convincing that Pakistan "will not revert to type" by running large deficits and facing foreign exchange crises. Investors will also have to be convinced that political risks are easing in a nuclear-armed nation surrounded by countries with whom it has unstable relations, including arch-foe India. Yet there are tentative signs foreign companies are eyeing Pakistan's fast-growing consumer market. Carmakers Renault-Nissan are considering a plant in Pakistan, and Suzuki, which already has a presence, said it may invest $460 million for a new factory. A Dutch dairy cooperative, FrieslandCampina International Holding, in March announced plans to buy a stake in Pakistani food giant Engro Foods, in a deal estimated at $460 million. Indicators "flashing green" Omar Hamid, head of Asia Pacific country risk research for IHS, said interest in Pakistan has soared this year by IHS corporate clients seeking country and political risk analysis. "It's a massive consumer market and the economic indicators are flashing green for many international companies," he said. Pakistan's interest rates are at 42-year lows, inflation has been tamed at about 3 per cent, the currency is stable and foreign exchange reserves have jumped to all-time highs. The economy is also expected to receive a shot in the arm from the China-Pakistan Economic Corridor (CPEC), a $46 billion roads and energy project. Much of the money is earmarked for power stations to ease chronic electricity shortages which hobble business and investment. Prime Minister Nawaz Sharif's government is so confident about the economy that it plans to end the IMF's $6.7 billion financial assistance programme in September. Analysts say this could prove a risky move if oil prices spike. In Karachi, the business community hopes MSCI's upgrade of Pakistan will herald a return of foreign investors who fled in anger in 2008 when the bourse imposed a floor and trapped them in a collapsing market for three months. "What happen in 2008 could never happen again," said Haroon Askari, deputy director of the Pakistan Stock Exchange. Pakistan's main benchmark index has risen by more than 500 per cent since the start of 2009, but is still considered cheap by some, trading at multiples below other emerging markets due to political and security risks associated with Pakistan. Saigol, founding partner of Baltoro Capital, which manages a new $48.5 million private equity fund, said foreign investors who finally take a serious look at Pakistan are often surprised. "They say they have never seen a country or an economy the size of Pakistan with so little coverage, so under the radar." (Reuters)

Despite flourishing economy, Pak's 'violent past' keeping investors at bay

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Pakistan's stocks emerge as top choice in emerging markets

Pakistan's stock rally ignited by foreign investors hits four-year high

Despite flourishing economy, Pak's 'violent past' keeping investors at bay