Merrill Chief Strategist Says Pakistan A Safe Haven For Investors

"Pakistan is a safe haven for investors", says Mark Matthews, chief Asia strategist at Merrill Lynch, speaking to CNBC's Arnold Gay in January, 2008. This is in sharp contrast to some of the rating agencies like S&P and Moody's hinting at possible downgrade of Pakistan as an investment opportunity. Matthews argues that Pakistan is one of the best information arbitrage markets in the world.
While the bombings, shootings and the body bags make good headlines for the news media, Matthews says it is incorrect to say that Pakistan is being radicalized. There is always a radical fringe in Pakistan like many other countries. Matthews is "very bullish on Pakistan". He points out that Karachi Stock Exchange KSE-100 index rose 45% and Pakistan's GDP grew by 7% in 2007 in spite of continuing political instability and a continuous stream of news of violence and mayhem on the streets. Pakistan has some of the best companies in the world with stock valuations about half of similar companies in India.
Here's a link to the CNBC video of Matthews' interview.

Here are more views about investing in Pakistan:

Mark Mathews:
Bhutto's death is "on the whole, largely irrelevant to the economy, which like other places, is what really moves the stock market," Merrill's Mark Matthews, who's based in Hong Kong, said in an interview Wednesday.
The strategist recommends investors hold more Pakistani shares than their representations on key regional stock benchmarks. The country's government expects the economy to expand 7.2 percent in the business year ending June, accelerating from 7 percent in the previous 12 months.
The country's shares on average trade on 10 times reported earnings with a dividend yield of 6 percent, Matthews said, citing Merrill Lynch data. That's compared with "consensus" valuations for Vietnamese stocks of 20 times, he said.

Roger Groebli:
"I'm afraid that the instability in the region will dampen investor appetite," said Roger Groebli, head of Asian equity research at ABN Amro Private Banking in Singapore.

Mark Jolley:
"On a longer-term view, I'm pretty bullish on Pakistan," said Mark Jolley, Deutsche Bank's Hong Kong-based Asian equity strategist. "Whatever the outcome, the reform agenda looks like it's going to remain intact."


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