South Asia Investor Review

Pakistan's benchmark index KSE-100 has soared nearly 40% so far in 2025, becoming Asia's best performing market, thanks largely to phenomenal growth of retail investors. About 36,000 new trading accounts in the South Asian country were opened in the September quarter, compared to 23,600 new registrations just three months ago, according to Topline Securities, a brokerage house in Pakistan.  Broad and deep participation in capital markets is essential for economic growth and wealth distribution in any country.  Pakistan's KSE-100 Index Chart. Source: Bloomberg Increase in trading accounts is helping inflows into local equity mutual funds as well. As much as 16% of total assets managed by asset management companies is now invested in stocks at the end of September, up from 9% at the start of the year, according to data from the Mutual Funds Association of Pakistan, as recently reported by  Bloomberg .  Pakistan Investment Accounts Growth. Source: Bloomberg Massive...

Pakistan's KSE-100 index soared 86% in 2024, making it the second best among major indexes, according to  Bloomberg  News. The 2024 performance of KSE-100 represents its best year since 2002 when it shot up 112% . The top 3 performing stock markets in 2024 were Argentina (114%), Pakistan (88%) and Kenya (79%), according to Topline Securities. The US markets posted double digit gains with the AI-driven tech-heavy NASDAQ-100 up 27.6%. Small and medium US companies performed well with the Russell 2000 Index edging out India's Sensex with an 8.9% return.   Pakistan Among Top Performing Stock Markets in 2024. Source: Bloomberg Clearly, the $7 billion IMF program helped restore some investor confidence in Pakistan's economy in 2024. It was also boosted by remittances from  overseas Pakistanis  in  July-October 2024 which soared nearly 35% YoY to $11.8 billion as compared to $8.8 billion in July-Oct 2023. The fact that the KSE100 shares valuations relative to...

Pakistan's KSE-100 shares index topped 80,000 points on Wednesday as stocks climbed more than 600 points, making it the world's best performing stock market. The benchmark KSE-100 index has posted an annual return of 89% during FY24 (July 2023-June 2024) in PKR terms while in US dollar terms, the return was 94%, as the Pakistani rupee appreciated against the US dollar, according to  Pakistani media  reports.  This outstanding market performance is generally being seen as a consequence of a series of unpopular decisions  by the military-backed government of Prime Minister Shahbaz Sharif to carry out economic reforms to win the IMF support.  Pakistani Stock Market Outperforms Asian Peers. Source: Bloomberg Specifically, some analysts attribute the record increase in Pakistani share prices to multiple factors, ranging from the government's investor-friendly budget to the expectation of closing a longer term  IMF deal . Others believe the relatively low price-e...

The investor confidence reached new lows when hundreds of irate investors took to the streets in Karachi today. A number of windows were broken and at least two people injured, Reuters news agency reported. They were protesting continuing slide in share prices in Karachi for the 14th consecutive day, eroding about 14% of capital since Monday, reaching a new 18-month low of 10,058.37. The KSE-100 is now down 36% from its peak of 15739.25 earlier this year. Fall of 20% or greater in major indices is considered a bear market. Earlier in June, there was a brief respite for investors when the authorities imposed a temporary ban on short selling and tightened the circuit breaker lower limit to 1% and increased upper limit to 10%. But, as soon as the trading range was revised to plus or minus 5% last Friday, many investors took advantage of it and sold off their holdings, putting further downward pressure on share prices. "The measures taken on Friday proved to be an exit strategy for fo...

While many analysts, CEOs, and investors remain bullish on Pakistan's economy, here's a contrarian view by Lee Hudson Teslik on the dangers ahead for Pakistan: Pakistan has become a land of what-ifs. Analysts speculate on a wide range of fallout scenarios for the country: suppose President Pervez Musharraf’s regime falls; or Musharraf’s crackdowns disillusion moderate Pakistanis and embolden Islamist extremists; or the country’s nuclear weapons aren’t as secure as official assurances suggest. On the economic front, there’s no need for guesswork—Pakistan’s turmoil has already pinched the country’s economy, stoking inflation and prompting concerns among regional trading partners. Voice of America (VOA), the U.S.-funded broadcast network, reports on a worsening of endemic economic problems in the country following the assassination of opposition leader Benazir Bhutto in late December. Pakistan’s central bank lowered its growth forecasts (Reuters) for 2007/2008 in early January, bu...

"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 abou...