Thursday, January 7, 2010

Goldman, Franklin-Templeton Bullish on Pakistan's Economy


Ron Rowland, a researcher at Weiss Research, believes that the world is going to hear a lot more about the "Next 11", a group of 11 nations beyond the four "BRIC" nations of Brazil, Russia, India and China. Goldman Sachs "Next 11" group includes Mexico, Nigeria, Egypt, Turkey, Iran, Pakistan, Bangladesh, Indonesia, Vietnam, South Korea and Philippines. Like BRICs, the rationale for the selection of N-11 is a good-size and growing population with a modern industrial base for a critical mass: The ability to produce consumer goods, and the consumers who can afford to buy them. Having natural resources, such as oil, in your back yard helps too. All of this creates the potential for major consumer and business growth. And the investment opportunities — for those who are patient and do their homework — could be enormous!

However, except for population and good economic potential, the N-11 are a diverse group in terms of their level of economic and market development as well as integration in the world economy. As in the case of BRICs, the authors of the concept, Goldman Sachs Consulting Group, have used variables grouped under Macroeconomic stability, Macroeconomic conditions, Technological capabilities, Human capital and Political conditions to determine the speed with which N-11 will be able to converge or catch up with the developed economies. Indonesia, Mexico and Turkey are three of the N 11 nations are already members of the Group of 20 (G20) nations. The rest of the N11 have the potential to join the group of the twenty largest economies of the world in the next few decades.

Comparing Pakistan with other N-11 countries in 2009, we find that it is only second to Indonesia in terms of population. However, in terms of the size of GDP, it is in the middle of pack, ahead of Bangladesh, Egypt, Nigeria, Philippines and Vietnam. All of this points to the potential Pakistan has to become a major economy based on its population size and demographics in the years to come.

Goldman Sachs report on "Next 11" projects Pakistan's rank moving up from the 26th largest now to the 18th largest economy in the world by 2025. In this context of Pakistan's tremendous economic potential as outlined in the report, there is considerable interest among individual US investors looking for opportunities to invest in Pakistan stocks. Unfortunately, there are no pure-play mutual funds investing exclusively in Pakistan. However, in addition to Franklin Templeton Funds, there are at least two other companies specializing in Asian economies that invest part of the portfolio in Pakistan along with India, Sri Lanka and other countries in Asia. These companies are Matthews Funds and Eaton Vance Funds.



It is heartening to see that top international investment professionals and firms continue to have faith in Pakistan's growth potential. To sustain and increase investor interest, it is absolutely essential that Pakistanis strive for a measure of peace and stability. The nation must also continue to increase the necessary investments in developing its human capital and infrastructure to support continued expansion of the economy and to realize the full potential of the country.

Related Links:

Goldman Sachs "Next 11"

Emerging Markets Expert Investing in Pakistan

Who Are the Next 11?

Is Pakistan Too Big to Fail?

GS Next 11 and Pakistan in 2050

Karachi Stock Exchange

Pakistan FDI Survey Report 2009

Emerging Markets: Brazil, China---and Pakistan?

Templeton's Asian Growth Fund

Pakistan Economic Survey 2008-2009

Pakistan's Infrastructure

Karachi Fashion Week

Is Pakistan Too Big to Fail?

How To Invest in Pakistan?

Karachi Fashion Week Goes Bolder

More Pictures From Karachi Fashion Week 2009

Pakistan's Foreign Visitors Pleasantly Surprised

Start-ups Drive a Boom in Pakistan

Pakistan Conducting Research in Antarctica

Pakistan's Multi-billion Dollar IT Industry

Pakistan's Telecom Boom

Pakistan Telecom Sector Investment Prospects

ITU Internet Data

Eleven Days in Karachi

Pakistani Entrepreneurs in Silicon Valley

Musharraf's Economic Legacy

Infrastructure and Real Estate Development in Pakistan

Pakistan's International Rankings

Foreign Direct Investments in Pakistan 1999-2009

Video: Who Says Pakistan Is a Failed State?

Pakistan's Financial Services Sector

Assessing Pakistan Army Capabilities

Pakistan's Auto Industry

Pakistan is not Falling

Jinnah's Pakistan Booms Amidst Doom and Gloom

Pakistan's Higher Education Reform

The Next 11 Emerging Economies--Euromonitor

Karachi Stock Exchange Presentation


Anonymous said...

Mujtaba said...

I do read always your optimistic views on Pakistan furture based on some authentic references, however reality on ground is totally different as i stayed two years there 2007-2009 but i saw is downward spiral,all the way,currency has lost its value by approx 20% in two years, jobless are increasing in thousand every day, price hike is steep for every commodity, law and order is terrible,corruption is at his peak,education standrads are going down,power cut off four times a day for hours, custruction industry is at stand still ,i put money on Emaar project which is almost but stop, no major projects.

Tell me i am wrong, so i can go back, i love the country but just cant survive there

Riaz Haq said...


I can not disagree with you about your own experience in the last two years. I saw some of the same things when I was there in July, and the big long-term investors know these facts, too. And yet the KSE-100 did rise 50% in 2009. And the direct and portfolio investors have made a killing in banking, telecom, real estate and other sectors during the last decade, because the asset prices are much lower than in other countries, reflecting the risks in Pakistan. The price-earnings ratios of the shares of good companies in Karachi is about half or less than the P-E ratios in Mumbai or Shanghai markets. So there is greater potential for further gains in KSE-100.

Here's what Mark Bendeich of Reuters wrote on Jan 10, 2008:

They should have. Their clients could have made a fortune.


The fact is that the economy never grows in a straight line, particularly in developing countries like Pakistan experiencing great turmoil. But the long-term trends are positive. It's a huge country with a lot of young people and lot of consumers that the investors see.



Salman said...

Like other areas,there are are stories about ups and downs of stock markets in Pakistan.Most here beleive that it i manipulated by few famous names who really control
them.As such I never see the stock market here as a bench mark for any confidence of investors.Yes ,these manipulations have benefitted many outside the ring/network as well on their lucky day.

However for those living here without having a choice to leave the country,please continue with your optimistic mails to keep the morale high.But honestly speaking,as I said earlier,I dont see the light at the end of the tunnel as it is too dark to see the tunnel either.Yes
we see some lights after sunset when torch bearers put the shops on fire or as a daily routine tyres are burnt on the streets.

Riaz Haq said...


I know it's hard to be optimistic when you are in a dark tunnel with no visible light at the end of it. But let me try and shine a little light for you.

All stock markets are manipulated to various degrees, the KSE much less so than the NYSE or LSE. KSE does not trade most of the speculative securities like exotic derivatives traded on many exchanges in Europe and America.

The stock market indexes (New York, Mumbai, Karachi, Shanghai etc) are followed and considered by most investors as barometers of a country's prospects. Why?

Because of the following reasons:

1. Professional investors and analysts do basic calculations of parameters such as price-earnings ratios and revenue and profit growth rates over several years for key companies' with shares on the major indices. It's not difficult for them to see if the market is being manipulated.

2. Most investors, direct (FDI) or portfolio (shares) investors take the movement of the share indices into account when deciding where to invest.

3. No economy, company or country can grow without infusion of capital which comes from investors.

So when KSE-100 does well, Pakistan attracts both direct investors in plants/equipment and securities investors in Pakistani shares, infusing capital, creating jobs and growing the economy. I see it as a hopeful sign for the future, in spite of all of the genuine problems that you see everyday now.

Rashid said...

Riaz, I need to call you on something that you wrote here..

The Efficient Capital Market Theory (which I had to study) - is a bunch of crap. At least we agree on that. You say that when you say that all markets are manipulated.

But to make a finer distinction regarding the presence or absence of fancy financial products as the only determinant - is incorrect.
If I understand it correctly, you are saying that KSE is better off because of the absence of derivatives. Here we agree.

But please get to the crux of the issue. The same damn western manipulators are entering the KSE because their own playing grounds are muddy. These are the same people who caused the fall of the capital markets. Why should their valuation of KSE have any validity? Why should their "investment" be beneficial to Pakistan?

Let me throw an analogy - Tea was not the "national" drink of the subcontinent. The British-India Tea Company handed out free tea at every street corner for years. Now Tea is the national drink of India and Pakistan. Now you have books written about the Three Cups of Tea. Caffeine addiction is still an addiction.

What if the KSE were to achieve the heights of the NYSE and all the other exchanges? I foresee the same thing happening to KSE eventually as happened to the western markets. A bubble growing - then bursting. Only this time an already shaky economy will become even more shaky.

It is my contention that the only reason for glamorizing the KSE by western writers is for nefarious purposes. They want to legitimize gambling and make it appear as a legitimate and worthy cause of utilizing Capital at its best usage. (Isn't that the premise of all Capital markets?)

You state that all Capital Markets are manipulated - yet you think that the end result is the betterment of mankind. My analogy is this - two thieves trade stolen goods - and mankind is benefited??? No way. Similarly, two speculators bid up the price of XYZ stock - and the entire economy is benefited? How? Why? Just because some poor sucker thinks he too can enter and depart from the bidding war at the exact right moment? You wish!!! The poor sucker can't even call the correct heads or tails in a totally unbiased coin toss - where the odds are fifty-fifty. It is downhill from there in everything in life.

I see the entrance of western capitalists into KSE as a very bad sign. It is a capitulation. If the Pakistani society can accept McDonalds and Kentucky Fried - then why not Goldman Sachs and Weiss Research and the remaining group of money-lenders? My usage of the term "money-lenders" is very deliberate.

Riaz Haq said...



I think you are overgeneralizing when you paint all investors by the same brush. There is a huge difference between long term stock investors like the mutual funds managed by Franklin-Templeton's Mark Mobius and the hedge funds that use heavy leverage (debt) in the US market to sell shorts or engage in derivatives sch as mortgage backed securities,mcredit default swaps that brought down the US market. They even allow naked shorts in America, that's a non-no in Pakistan.

But you can not, nor can India and China, escape the fact that the whatever happens in NY or London also affects Mumbai, Shanghai and Karachi. The reality of capital is that it is globalized just like labor and goods, and services. So unless you create a "bubble" and live it it isolated from the outside world, you are not going to be insulated from what happens in the US or Europe, or elsewhere in Asia.

And to create a "bubble" to live in, you need your own capital which is scarce. Pakistanis save only 15% of the GDP versus Indians' 30% and the Chinese 40%. We need capital from elsewhere to invest. It won't come unless we play in the global markets, and trade with other nations, and allow foreign investors into our markets.

As former Musharraf finance adviser Salman Shah put it in an interview with Wall Street Journal last year, Pakistan has "to globalize or Talibanize". Pakistan needs to attract both FDI and portfolio investments from abroad. All those millions of youths on the farms or in the tribal belt of Pakistan have to either be in schools or working in factories or offices. Otherwise, they'll be potentially recruited as fighters by the terrorists to continue to cause death and destruction on the streets of Pakistan and elsewhere.

Najam said...

Atleast ,since the day Pervez Musharraf (and Salman Shah) surrendered on a phone call 10 years back,Pakistan is well and truly on the course of Globalization and not Talibalization.The results are there for all to examine.

a)Streams of Milk and Honey are flowing throughout the country.
b)Law and order is so good that Lion waits for the Goat to drink water and a woman travels from Karachi to Peshawar throwing Gold in the air and no one dare look at her.
c)Shops are full of buyers,having high buying value.The factories are operating 24 hours with extremly high production out put.
d)There is no interruption in Electric Power anywhere in the country and clean drinking water comes from the Taps.
e)Transportation is of highest class.Bullet trains,Air conditioned buses and at very nominal fare.
f)People struggle from day to night to find a poor person ,a beggar to whom they can give Zakat and Sadqah ,but can not find any.
g)Pakistan has become a major Donor nation.

The list is unending ,the merits of last 10 years policies are enormous.

Riaz Haq said...

Your comment dripping with sarcasm would be really funny if it wasn't so tragic. The picture you paint is a Utopia that doesn't exist anywhere in this world.

If you really want someone to blame for Talibanization, why stop at Musharraf or Salman Shah? You really have to go further back to your hero Zia ul Haq in the 1980s, who sought out American CIA's help and sowed the seeds of 911 terrorist attacks that forced Mush and the rest of the world to acquiese to American aggression in the aftermath of Sept 11, 2001. After 911, it wasnt just Mush that accepted the US demands. There was a UN reolution endorsing the American invasion of Afghanistan, supported by India, China, Russia, Europe and the Muslim nations.

What we are now reaping is the bitter harvest of terror from the al Qaeda, Taliban, the Lal Masjid gang and their allies today. Their ideology of hate is consuming all of us as never before. Muslims are their biggest victims in Pakistan and elsewhere. All actions have consequences, and what we do now will have consequences now and ten, twenty or thirty years later.

It's time for us to stop the blame game and come to our senses. Each of us needs to accept responsibility for our own mistakes. We need to start thinking about the real problems of poverty, illiteracy, malnutrition and unemployment that our people suffer from, and learn from our neighbors India and China how they are solving their problems by selectively cooperating with rather than confronting the Americans and the West to get the capital and the export markets they need to increase their economic self-sufficiency and achieve a degree of true sovereignty in the future.

As they often say, a crisis is a terrible thing to waste.

Anonymous said...

Riaz Sb. Thanks for the good news. The moment I saw your article I knew some pathetic loser from our eastern neighbor will be here and find some bad news to post. Well they never miss a chance to make a fool of themselves.

Anonymous said...


Anonymous said...

It is difficult to be optimistic about countries like India and Pakistan in the long run. How will the teeming hordes be fed? Where will the water to wash and drink come from? How to avoid indulging in pointless bloodshed instead of solving bigger problems together?

Only systematically applied science may provide an answer - and for now that can only come from the US, Europe, Japan or South Korea.

Reader from India

Riaz Haq said...

Here's a report on Goldman Sachs assessment of BRIC and N11 at the end of 2009:

MANILA, Philippines - Global investment bank Goldman Sachs said the Philippines performed better than most of the next 11 emerging economies (N-11) during the global crisis.

"Within the N-11, Indonesia and the Philippines have positively surprised," Goldman Sachs said in its latest Global Economics Paper.

The N-11 and the BRIC (Brazil, Russia, India, and China) are 2 terms coined by Goldman Sachs several years ago. The investment bank considers the BRIC as the fastest-growing developing economies, and the N-11 as the ones "worth keeping an eye on" outside of the BRIC.

Aside from the Philippines and Indonesia, other members of the N-11 include Bangladesh, Egypt, Korea, Turkey, Nigeria, Vietnam, Iran, Pakistan, and Mexico.

Goldman Sachs said the Philippines exceeded growth expectations, along with China, Brazil, India, and Indonesia. On the other hand, countries which performed in line with the investment bank's projections include Bangladesh, Egypt, Korea, Turkey, Nigeria, and Vietnam.

Meanwhile, Goldman Sachs said Iran, Pakistan, and Mexico have "largely disappointed" its expectations.

Stronger rebounds

While the BRIC and N-11 saw sharper contractions than developed countries in general, Goldman Sachs said these economies also posted stronger rebounds. The investment bank grouped the BRIC and the N-11 in terms of the differentiation, with the Philippines still at the top tier.

"This group of winners includes Brazil, China, India, Egypt, Indonesia, and the Philippines. They have experienced a relatively mild slowdown, and have shown an impressive rebound in growth and activity this year."

In the middle group are Korea, Nigeria, Turkey, and Vietnam, which have also seen impressive rebounds despite relatively sharp contractions, Goldman Sachs said.

Meanwhile, Iran, Mexico, Pakistan, and Russia belong to the bottom level given the depth of their recessions and sluggishness of recoveries.

"While overall the BRICs and N-11 saw much sharper contractions than the developed countries, they also saw much stronger rebounds," Goldman Sachs said.

World growth

Since 2007, Goldman Sachs said the BRIC has contributed 45% of world growth, while the N-11 countries account for 11%. The Group of 7 (G7), on the other hand, only contributed 20% in the past 2 years.

The G7, a group of industrialized nations, includes Canada, France, Germany, Italy, Japan, United Kingdom, and the United States.

"While the 2000-2006 contribution to global growth was almost equally split between the developed and developing world, the last 2 years saw the trend change sharply, with the divergence mainly driven by the BRICs," Goldman Sachs said.

On an individual country basis, Goldman Sachs said all of the BRICs and 7 of the N-11 (Bangladesh, Egypt, Indonesia, Iran, Nigeria, Philippines, and Vietnam) contributed more to world growth in 2007 to 2008 than from 2000 to 2006.

Anonymous said...

riaz, you keep believing that Pak is at the same level as India when it comes to science and technology.

today's WSJ
BANGALORE -- General Motors Co.'s research center in India will be ready to develop a global car platform by 2012, a senior executive said Monday.

"By 2012, we will have the full capability to design, develop and build a global platform," Karl Slym, who is General Motors India Pvt. Ltd.'s president and managing director, told a news conference.

He didn't say what type of vehicle the R&D center will develop.

The center in the southern city of Bangalore employs 1,600 engineers, said P. Balendran, vice president at General Motors India.

Write to Rumman Ahmed at

NEW DELHI--The Indian unit of Huawei Technologies Co. plans to manufacture telecommunications equipment in the country and invest about $500 million in its research-and-development center in five years, the unit's chief executive, Max Yang, said late Friday.

Huawei Technologies India has yet to decide on partnering with Indian state-run telecom equipment maker ITI Ltd., Mr. Yang told reporters.

"[Partnering with] ITI is one of the ways [to manufacture equipment in India]. ... We have some other choices [like contract manufacturing] also," he said. In June, ITI had invited initial bids from investors interested in buying a stake in three of its six manufacturing plants in the country.

Huawei's team from China visited ITI's plants in November to decide on whether to participate in a bid for majority stakes in the three joint ventures the Indian telecom-equipment maker plans to form.

Mr. Yang said manufacturing in India will also protect the company from steep antidumping duties levied by India on imports of some telecom equipment from China. In December, India said it would levy antidumping duties of up to more than three times the value on synchronous digital hierarchy, or SDH, telecommunication transmission equipment imported from China. It said ZTE Corp. will need to pay a duty of 236% and Huawei Technologies of 50% on such equipment sold in the country.

Huawei's Indian unit plans to add 5,000 employees to its current 2,000-strong staff working at its research-and-development center in Bangalore in the southern Indian state of Karnataka.

Huawei Technologies India expects revenue "to be stable" in 2010, but sees growth for 2011, Mr. Yang said without elaborating. The company's revenue in 2009 was slightly more than $1 billion, he said.

Mr. Yang said the Indian unit hasn't yet received an order from state-run Bharat Sanchar Nigam Ltd., which had earlier issued tenders for sourcing telecom equipment to add 93 million lines to its mobile-phone network.

In June, BSNL had shortlisted Sweden's Telefon AB L.M. Ericsson and Huawei for parts of an estimated $6 billion contract to supply telecom equipment.

"[The order is] on hold... [BSNL] didn't formally communicate with us," Mr. Yang said.

India's junior telecommunications minister, Gurudas Kamat, said in July that Huawei's bids for equipment supply to BSNL's western and eastern regions hadn't been opened due to security guidelines.

The federal home ministry and the intelligence bureau have raised concerns over the presence of foreign companies "especially from certain countries in the critical and sensitive border areas, that may have national security implications," Mr. Kamat said.

Write to R. Jai Krishna at

Riaz Haq said...

anon: "General Motors Co.'s research center in India will be ready to develop a global car platform by 2012, a senior executive said Monday."

GM is a loser. It's not interested in R&D in India. It just wants to sell its crap there, because it can't sell it in other places, including its own backyard.

As to the capabilities comparison on autos, Pakistanis are just as capable of building old-tech autos as Indians. There is no magic to designing and building autos. It's old hat.

If Pakistanis can design and build airplanes, rockets, UAVs, tractors and tanks and high-tech firearms, they can also design and build autos. Auto parts business in Pakistan already exceeds a billion dollars. Pakistan is one of the largest manufacturers and major exporter of auto CNG kits in the world.

Riaz Haq said...

Here's a relevant opinion by Soutik Biswas of BBC:







Riaz Haq said...



Riaz Haq said...

Here is a recent Dawn report on Karachi stocks performance:




Riaz Haq said...




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By Tanveer Ahmed


Riaz Haq said...









Inflation, Politics




Riaz Haq said...



Two long-term plays on Pakistan’s turnaround






And one punt for the brave…





Till then, good investing.

Manraaj Singh
For The Right Side

Riaz Haq said...



Riaz Haq said...



Investing in Pakistan: Surprisingly Big



Investing in Pakistan: Edgy Relations with Uncle Sam



Investing in Pakistan: A Solid Start to the Millennium




Riaz Haq said...

Here's an interesting commentary by Sudha Ramachandra about India's future prospects:







Riaz Haq said...




Dialing up through the phone lines





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Riaz Haq said...

Goldman Sachs' Jim O'Neill has reaffirmed his optimism about N-11 group of countries which includes Pakistan. Here's an excerpt from a Vancouver Sun story:

In his book, The Growth Map, O’Neill attempts to look beyond the original concept and expand on it. Hence his “Next 11”: Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey, and Vietnam. However, O’Neill is quick to point out that not all of these countries are equally primed for investment.

This is a group of “very, very diverse countries,” he says. “On one level, I’m always quite embarrassed about the acronym N-11 because all it is ... is a phrase to describe the next 11 population countries after the BRICs, and that’s it.”

Indeed. The N-11 ranges from stalwarts of emerging-market investing, such as South Korea, Turkey, and Mexico, to countries that even the boldest investors tend to be wary of, such as Pakistan and Iran.

O’Neill posits that countries with huge populations and low gross domestic products per capita will be able to catch up to the developed world more quickly than they could have 50 or 100 years ago, as the economic centre of gravity shifts away from the West.

In order to assess countries’ capacity to generate sustainable growth, O’Neill has come up with a set of 13 variables (from education to rule of law to fiscal health to internet penetration) that combine to make what he calls a “growth environment score.” On this measure, the highest-scoring country, South Korea, tops every G8 country except one – Canada.

Read more:

Another excerpt from UAE's The National:

Mr O'Neill, as one of the world's top economists and global chairman of Goldman Sachs' asset management business, has detailed answers for all the critics, although he does concede: "Maybe I'm too proud of my creation".

He was speaking in Dubai ahead of the Goldman Sachs Asset Management conference on the Middle East and North Africa, an annual gathering designed to work out the bank's broad investment approach to the region.

Whatever the critique of the Bric concept, there is no doubt it has become one of the guiding principles of economic and financial theory of the past decade, and has helped to change the way businessmen and financiers view the world.

He recently updated the concept to take in what he calls the Next 11 or N-11 economies: Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey and Vietnam.

His visit took in the UAE and other GCC states, and prompted some typically down-to-earth observations on the region's potential.

"From the broad Middle East region, there are two countries that have the population size to eventually become big enough, or N-11: Egypt and Iran. Both are in our list already," he says.

"No individual GCC country could reach their potential. If you thought of the GCC collectively, then you might think of them as having Bric-like potential, but not alone."

Even the biggest GCC country, Saudi Arabia, with its population of an estimated 25 million, is not a candidate for the lists currently, mainly because it lacks the basic criterion of having an economy that is more than 1 per cent of global GDP, Mr O'Neill argues.

Riaz Haq said...



Riaz Haq said...



Riaz Haq said...

Here's Pak Observer report on South Korean investment in Pakistan:











Riaz Haq said...

Here's Pak Observer report on South Korean investment in Pakistan:











Riaz Haq said...











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Riaz Haq said...

A stock market that has about tripled in value in the last four years is not usually the first thing that comes to mind when global investors and business people think of Pakistan. The stock market has made great strides and some still consider it significantly cheaper value than its peer markets. Meanwhile, outsiders looking for signs that Pakistan is politically stabilizing will find mixed messages at the surface of the news.


Mr. Mohammed Sohail, CEO of Topline Securities Pakistan, says:

The sit-in [that began in Islamabad on August 15] is gradually diluting because the two parties which started the gathering [the PTI and PAT] are there more than six weeks. The media coverage is declining. Investor focus has also shifted away and returned to business as usual. There was an initial correction of 8% to 9%, but now the market has recovered, and is where it was when these protests started. This shows the market is resilient.

The market stabilized in part because the military clarified they don’t intend to intervene or engage in any unconstitutional matter. These protests are democratic, as everyone in a democracy has a right to protest.

The government is now more transparent and more careful as a result of the protests. This is the beauty of democracy: the opposition criticizes the government in power and the government in power improves themselves. For example, the PTI has criticized Prime Minister Nawaz Sharif for having too many family members in important posts and I think this has been accepted as an issue the government will try to improve. Effective opposition criticism is a side of politics we expect to see more of in the future.

Frankly speaking, I see these protests as a major development. In 60 to 70 years, Pakistan has not seen pure proper democracy. If you look at other democracies, these type of protests and political exchange is normal. It is only six or seven years now that we have this proper democracy. This is really the first time in Pakistan’s history that we can have this kind of democratic interaction. When the opposition protests, it provides a lesson for the rulers to be more active, to think about all people.

Mr. Faisal Shaji, a research analyst at Standard Capital Securities in Pakistan, offers a different view:

The protests are in a way positive for real democracy in the country since it has created lot of awareness among the masses. The incidence of rigging is on a wide scale and accepted by all political groups. These protests were previously unthinkable. People think that the overall system is rotten and hence protestors are gaining strength.

The military handled the protests very wisely as the current chief of the army staff [COAS] is pro-democracy. The military wants political parties to resolve the issues politically. But we think the situation is going towards new elections that will use a biometric system of thumb impression which is the ultimate solution to the problem.

Mr. Sohail of Topline Securities maintains confidence in Pakistan’s capital markets moving forward:

Things that were held up due to the protests – IPOs, privatizations, reforms, the $800 million share sell of our largest oil and gas company OGDC – have now resumed. When the OGDC deal is executed, I think that will give a very clear signal to the international business community that the protests may still be going on, but investment and business already are operating as usual.

Pakistan is an unexplored market by most outside investors that is not marketed properly. Compared to peers, the market is very cheap. Pakistan’s markets trades at a price/earning multiple of 7.5 times; a 30% to 40% discount to Sri Lanka, Bangladesh, Nigeria and Vietnam. For me, from an investor’s point of view, the next 24 months look very positive for the equity markets.

Riaz Haq said...





Riaz Haq said...

Pakistan will be 16th largest economy by 2050: PWC report




Fitch affirms Pakistan at ‘B’; outlook deemed stable







‘Pakistan’s economy will collapse in the next 10 years’


Egypt will move to the 15th place with Pakistan at 16th.



Riaz Haq said...

The Economic Growth That Experts Can’t Count














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A ‘globalized people’

