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 KSE100 (Karachi Stock Exchange 100) index closed the year 2016 as the world's best performing stock market index over one-year and five-year periods, according to data available from  Bloomberg . It has not only outperformed India's Sensex index but also the Morgan Stanley Emerging Markets index. Source: Bloomberg Pakistan's key index KSE-100 has rocketed up nearly 46% in 2016, far outpacing India's Sensex's 2.57% rise and MSCI emerging market's 8.42% increase. Similarly, over 5 year period, KSE-100 has soared 321% vs India's Sensex rise of 72% and Morgan Stanley emerging market index decline of 7.72%. Source: Bloomberg Pakistani stock market gains are driven by multiple factors. Dramatically improved security has brought investors and accelerated the nation's GDP growth. Adding to that is the optimism accompanying Morgan Stanley's decision to bring Pakistan back into its emerging market index that has spurred more buyi...

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 ...

Is it time to sell India short and go long on Pakistan? Indian shares are highly overvalued while Pakistan and Hong Kong shares are trading at very attractive valuations, according to latest data published by  Bloomberg . The Indian shares listed in Mumbai are trading at nearly 22 times earnings, more than twice the price-earnings multiples of Karachi and Hong Kong listed stocks. Source: Bloomberg Hong Kong's Hang Seng benchmark gauge for $4.3 trillion of shares was valued at 9.8 times reported earnings on Thursday, a 44 percent discount to the MSCI All-Country World Index, according to Bloomberg. That’s the cheapest level among developed markets worldwide and compares with a multiple of 10.2 for Pakistan’s KSE 100 Index. Russia’s Micex has the lowest valuation among major markets, trading at about 9.5 times profits. Talking about Pakistan,  Charlie Robertson, London-based chief economist at Renaissance Capital Ltd.  told Bloomberg that “It (Pakistan) is the...

This ( China's $46 billion investment in Pakistan ) can not be purely politically driven. Beijing is commercial: CEO’s, not think tank intellectuals, travel with politicians.  Barron's Asia Spurred by  Chinese investment , the smart money is taking notice of Pakistan as an attractive investment destination. The investors are looking at the fact that Pakistani stocks have been outperforming both emerging and frontier markets for several years. The benchmark index of the Karachi Stock Exchange (KSE100) is up more than 20% in the last 12 months, according to  NASDAQ.com . Pakistani Shares in 2015: After a dismal March, MSCI Pakistan rebounded strongly this month, returning 9.1% so far. In April, the iShares MSCI Frontier 100 ETF (FM) rose 4.3%, the WisdomTree India Earnings Fund (EPI) dropped 1.2%, the iShares MSCI India ETF (INDA) fell 1.9%, according to  Barron's Asia . Source: Economist Magazine KSE-100 Performance: In 2014, the KSE-100 Index gained 6,8...

Pakistan lost its place in MSCI  Emerging Markets Index in December 2008. It was included in MSCI Frontiers Market Index in May 2009.  Some analysts believe that Pakistan could re-gain the Emerging Market classification (which includes BRIC countries) in a couple of years. Since the beginning of 2012 MSCI’s index of Pakistani shares has  jumped 60% in dollar terms —outpacing global indices as well as MSCI Emerging Market Index and Pakistan’s peers among frontier markets.  Pakistan's KSE-100 index was among the  top 5 performers in the world  in 2013. In recent months foreigners, who kept piling in even as jittery local investors began selling, have bought a net $36m-worth of shares in August, when the PTI and PAT protests were at their height, and a further $53m-worth in September, according to  The Economist . Over the next 6 months $2-2.5 billion of new float is expected to come on stream from Pakistan through government's privatization ...

Karachi's KSE-100 Stock Market Index was up 49.4% ( 37% in US$ terms ) in 2013, beating all but four stock indices in the world. It handily beat Morgan Stanley's MSCI emerging market index which remained essentially flat. By comparison, India's main stock index rose just 8.89% in the same period. The remaining three BRIC countries--Brazil, Russia and China-- all saw their key stock indices decline in 2013. KSE-100 vs MSCI Emerging Markets Index Source: Wall Street Journal This is a continuation of the bullish trend seen in 2012 when KSE-100 also rose nearly 50% to top all Asian market indices . As of December 31, 2013, KSE-100 is up 329% since the end of 2008 . It is being driven mainly by rapid growth in revenue and profits of the listed companies. Even after the strong run-up, the market still remains cheap — currently trading at over nine times trailing 12 month earnings—a common valuation measure used by stock analysts, according to Wall Street Journal . Wor...

Karachi's KSE-100 index surged nearly 50% (37% in US $ terms) in 2012 to top all Asian market indices . It was followed by Bangkok's SET index which advanced 36%. It also easily beat India's Sensex index which was the top performer among BRICs with 25.19% annual gain . A string of strong earnings announcements by Karachi Stock Exchange listed companies and the Central Bank's rate cuts helped the KSE-100 index approach 17,000 level, a gain of  49.84% (37% in US dollar terms). In spite of this run-up in KSE-100 , Andrew Brudenell, manager of the HSBC Frontier Markets fund (HSFAX) in London, remains bullish on Pakistani equities, according to Barron's . Pakistan is one of the cheapest markets he follows, at about seven times earnings. He notes that earnings growth has kept pace with the market. The firms, he adds, are typically cash-rich, boast strong return on equity levels in the 20% range, and pay good dividends. Here's an excerpt of a recent Busine...

"The bottom line is that Pakistan is not going to go away. We want to buy stocks that look cheap as prices come down as a result of the flood." Mark Mobius, Head, Templeton Asset Management Ltd Pakistan's main shares index KSE-100 rose 28% (26% in US dollar terms) in year 2010, as profits registered 14% growth and dividend yields of 5.2% in the companies making up the index. The market gains were driven by significant foreign buying, particularly by insitutional investors after the massive summer floods in KP, Punjab and Sindh provinces. Foreign institutional investors bought $1.2 billion worth of shares, and sold about $687 million, with the net FII capital inflow of $522 million during the year. One example of renewed foreign institutional buying after the post-floods market is Mark Mobius of the Templeton Asset Management Ltd , as reported by Businessweek . “There will be an impact on growth but company valuations are very, very attractive now and therefore we continu...

Pakistan's main stock market ended 2010 with a 28 percent annual gain, driven by foreign buying mainly in the energy sector, despite concerns about the country's macroeconomic indicators after summer floods , according to Reuters . Although it was less than half of the 63% gain recorded in 2009, it is still an impressive rise in KSE-100 index when compared favorably with the performance of Mumbai(+17%) and Shanghai(-14.3%) key indexes. Among other BRICs, Brazil is up just 1% for the year, and the dollar-traded Russian RTS index rose 22% in the year, reaching a 16-month closing high of 1,769.57 on Tuesday, while the rouble-based MICEX is also up 22%. Pakistan's key share index KSE-100 was just over 1000 points at the end of 1999, and it closed at 12022.46 on Dec 31, 2010, sgnificantly outperforming BRIC markets for the decade . Pakistan rupee remained quite stable at 60 rupees to a US dollar until 2008, slipping only recently to a range of 80-85 rupees to a dollar. In spit...

Murree Brewery Company (KAR-MURE), a publicly listed beer maker founded in 1861, has now been added to the Karachi Stock Exchange's KSE-100 index, according to media reports from Pakistan's financial capital Karachi. The Murree Brewery is one of the oldest public companies of the sub-continent. Its shares were traded on the Calcutta Stock Exchange as early as 1902, and is now the oldest continuing industrial enterprise of Pakistan, and among the top 25 performing public companies listed on the Karachi Stock Exchange . The Karachi Stock Exchange KSE100 Index includes the top company from each of the 34 sectors on the Karachi Stock Exchange, in terms of market capitalization. The rest of the companies are picked on market cap ranking, without any consideration for the sector to make a sample of 100 common stocks with base value 1,000. As of Feb 26, 2010, the new index, with the inclusion of 11 new companies, makes up 91.11 percent of the total market capitalization of Karachi S...