South Asia Investor Review

Stock Investors Bullish As the world holds its breath for the February 18 voting in Pakistan, the stocks continue to surge with major Pakistani companies posting record profits. The KSE-100 rose for the fourth day closing up 70 points at 14,353. Pakistan State Oil Company Limited, the largest state owned oil marketing company in the country has achieved a record profit before tax of Rs 8.2 billion and profit after tax of Rs 5.5 billion in the first half of financial year 2007-08 with 13% increase in sales volume. Shares buyback by a number of listed companies including Ahmad Spinning Mills, Sarhad Cigarettes and Noon Textiles inspires confidence that the share prices are likely to continue the uptrend. External Debt Rises Pakistan's external debt rose by US$2.4b to reach a new high of US$42.9 during July-Dec 2007. As a percentage of GDP, however, it declined to 26% from 27% at the end of FY2007 ending June 2007. The total debt-to-GDP ratio is 57%, helping Pakistan maintain its Mood...

A number of Pakistani economists and newspaper columnists are fretting about what they call "Pakistan's Debt Crisis". They claim that Pakistan's national debt has risen dramatically over the last 8 year. Putting in perspective, it seems to me that they are raising an unnecessary alarm. While it is true that Pakistan's total external debt has increased by about 10% since 1999, it is also true that Pakistan's GDP has more than doubled. Here are the facts: In 1999 Pakistan’s total debt as percentage of GDP was the highest in South Asia – 99.3 percent of its GDP and 629 percent of its revenue receipts, compared to Sri Lanka (91.1% & 528.3% respectively in 1998) and India (47.2% & 384.9% respectively in 1998). Internal Debt of Pakistan in 1999 was 45.6 per cent of GDP and 289.1 per cent of its revenue receipts, as compared to Sri Lanka (45.7% & 264.8% respectively in 1998) and India (44.0% & 358.4% respectively in 1998). Most recent figures in 2007 ...