South Asia Investor Review

Although the rate of growth has slowed since 2018, Pakistan's middle class consumer population still remains among the fastest growing in the world. In a report titled " Emerging Markets Transforming As Velocity Markets ", Ogilvy and Mather, a global market communications firm, has put Pakistan among what it calls "Velocity 12" group of economies that include Bangladesh, Brazil, China, Egypt, India, Indonesia, Mexico, Myanmar, Nigeria, Pakistan, Philippines and Vietnam.  The term velocity describes both the rate of real change in the size of the middle class as well as a priority for companies as they consider business investment and marketing in V12 countries. These 12 countries will be the biggest contributors to the next billion middle class consumers, according to the report. The Velocity 12 report says that this next billion middle-class group will: 1. Be increasingly defined by women and youth as the change agents, with purchasing power crossing cultur...

Two  multinational giants  acquired 2 Pakistani companies in just the last week alone as part of their growth strategy to establish presence in Pakistan. Dutch dairy giant FrieslandCampina acquired 51 % of Karachi-based Engro Foods Limited, the second largest dairy producer in Pakistan. In the same week, Turkey's Arcelik announced purchase of Dawlance, Pakistan's market-leading home appliance maker.  Both cited opportunity for double-digit growth in the emerging market as the main reason for their acquisitions. Pakistan's Emerging Market Upgrade: Earlier in June, Morgan Stanley announced its decision that Pakistan's MSCI shares index will be upgraded from frontier to  emerging market status . Pakistan's Karachi Stock Exchange KSE100 Index has rallied 14% in 2016, making it Asia's best performing market so far this year in anticipation of the MSCI announcement. Pakistan Dairy Market: Pakistan is the third largest milk-manufacturing country in the world,...

MSCI Pakistan Index will be reclassified to Emerging Markets status, coinciding with the May 2017 Semi-Annual Index Review, according to an  MSCI press release on June 14, 2016 . Emerging Market Upgrade: Pakistan's Karachi Stock Exchange KSE100 Index has rallied 14% in 2016, making it Asia's best performing market so far this year in anticipation of the MSCI announcement. Source: Bloomberg The upgrade could attract additional $475 million of inflows by the middle of next year as investors rush to buy Pakistani shares, according to analysts quoted by  Bloomberg News . Pakistan was classified as Emerging Market in 1994, a status it retained during the  Musharraf years .  It was downgraded to frontier status in December 2008, four months after the former president was forced out by PPP and PMLN politicians. Loss of investor confidence after  President Musharraf 's departure triggered a major bear market that wiped out nearly $37 billion of ...

Joseph Mark Mobius of Templeton Emerging Markets Group sees "many reasons for a brighter future for Pakistan".  Mobius, armed with B.A. and M.S. degrees in Communications from Boston University, and a Ph.D in economics from MIT,  is a top global fund manager with a  good track record  of investing in emerging markets. In a blog post titled  "Building Corridors to the Future in Pakistan" , an obvious reference to  China-Pakistan Economic Corridor (CPEC) , Mobius says he and his team "have been investing in Pakistan for a number of years, and see it as an overlooked investment destination with attractive valuations due to negative macro sentiment". It should be noted that Karachi Stock Exchange listed companies' average  price-earnings multiple of just 10  is less than half of regional markets such as Mumbai with PE ratio of over 20. Source: Bloomberg In addition to new foreign investment in CPEC and low PE ratios, Mobius offers ...

Pakistan's KSE-100 stock index surged 55% in 2009, a year that also saw the South Asian nation wracked by increased violence and its state institutions described by various media talking heads as being on the verge of collapse . Even more surprising is the whopping 825% increase in KSE-100 from 1999 to 2009, which makes it a significantly better performer than the BRIC nations . BRIC darling China has actually underperformed its peers, rising only 150 percent compared with energy-rich Brazil (520 percent) and Russia (326 percent) or well-regulated India (274 percent), which some investors see as a safer and more diverse bet compared with the Chinese equity market, which is dominated by bank stocks. This is the kind of performance that has got the attention of some of the top investors and investment firms around the world. Not only has Goldman Sachs reaffirmed Pakistan's place on the list of its top 15 emerging economies for 2010, smart international investment gurus are inv...

Mark Mobius, a legend among emerging-market investors, is "overweight compared with everyone else" in Pakistani stocks, according to an interview published in the "2010 investment guide" issue of Businessweek magazine. The 73-year-old fund manager, who oversees $33 billion spread across 35 Franklin Templeton funds, has been scouting for investment opportunities in unlikely places, including Pakistan, for over 30 years. Mobius explains that for "our (Franklin Templeton's) Asia growth funds , we have been buying Pakistan Telecom , MCB Bank , and Indus Motor , which is a Toyota (TM) assembler and distributor". All three of these companies are listed on Karachi Stock Exchange . There is considerable interest by 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 c...

With political instability, rising inflation and economic slowdown, many investors are fleeing South Asian markets. India's Sensex is down 48% and Pakistan's KSE-100 is down 34.6% this year. Most of the rest of the world's emerging markets dropped, too— Shanghai lost 44 percent, Russia, down 25 percent, and Brazil, 36 percent. They're fighting inflation and their slingshot growth has eased. To investors, it looks like a no-go zone. As far as Pakistan is concerned, a little less than seven years ago, immediately after the Sept. 11 attacks on U.S. cities, few sane investment advisers would have recommended Pakistani stocks. In hindsight, they should have. As Western governments have fretted about the resurgent Taliban or Pakistan's nuclear weapons falling into the hands of militants, the Karachi Stock Exchange's main share index has risen more than 8-fold, in spite of the recent troubles and major decline of KSE-100 this year. Is it time again for a counterintuiti...