South Asia Investor Review

Famous Indian writer and poet Javed Akhtar told his audience at a conference in Mumbai that he saw "no visible poverty" in Lahore during his multiple visits to Pakistan over the last three decades. Responding to Indian novelist Chetan Bhagat's query about Pakistan's economic crisis at ABP's " Ideas of India Summit 2023 " in Mumbai, Akhtar said: "Unlike what you see in Delhi and Mumbai, I did not see any visible poverty in Lahore".  This was Akhtar's first interview upon his return to India after attending "Faiz Festival" in Lahore, Pakistan.  Javed Akhtar at ABP Ideas Summit in Mumbai Chetan Bhagat began by talking about high inflation, low forex reserves and major economic crisis in Pakistan and followed it up by asking Javed Akhtar about its effects he saw on the people in Pakistan. In response, Akhtar said, "Bilkul Nahin (Not at all). In India you see poverty right in front of you, next door to a billionaire. Maybe it is k...

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...

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...

Karachi shares market significantly outperformed Mumbai in the last ten years. But this fact is not enough to get any positive attention from Fareed Zakaria, India's best-known cheerleader in the West. As expected, Fareed Zakaria's discussion of " The Rise of the Rest " sings praises of the BRIC nations, particularly mentioning his native India in the most glowing terms. There is nothing wrong with that, except that Zakaria omits any positive mention of India's neighbor Pakistan in the context of economic performance in the decade of 1999-2009 , and chooses to strike familiar themes of "Islamic jihadists" and "terrorism" when he does make any references to Pakistan. What Zakaria has omitted is the story of the extraordinary returns Pakistan has produced for investors. Pakistan's key share index KSE-100 was just over 1000 points at the end of 1999, and it closed at over 9727.40 on Dec 31, 2009. Pakistan rupee remained quite stable at 60 rup...

Decried by many as " racist poverty porn " and condemned by Bollywood superstar Amitabh Bachan in his blog for showing India as "a third world dirty under belly developing nation (sic)", the movie Slumdog Millionaire has been greeted by howls of protests in India. But it has been widely acclaimed in the West. It is sparking international interest in the vast slums of Mumbai. “Slumdog” may take in $100 million during its run in U.S. and Canadian theaters, according to Media By Numbers LLC. The low-budget movie had $43.9 million in receipts before collecting 10 Oscar nominations on Jan. 22, 2009. There have been charges of child exploitation against Slumdog producer and director which have been denied by Danny Boyle. “The actors were paid very well. We have not released any figures — either what they were paid or what they will receive when they complete their education — because it would make them vulnerable to certain elements, because they are quite large sums o...

India, often described as peaceful, stable and prosperous in the Western media, remains home to the largest number of poor and hungry people in the world. About one-third of the world's poor people live in India. More than 450 million Indians exist on less than $1.25 a day, according to the World Bank. It also has a higher proportion of its population living on less than $2 per day than even sub-Saharan Africa. India has about 42% of the population living below the new international poverty line of $1.25 per day. The number of Indian poor also constitute 33% of the global poor, which is pegged at 1.4 billion people, according to a Times of India news report . More than 6 million of those desperately poor Indians live in Mumbai alone, representing about half the residents of the nation's financial capital. They live in super-sized slums and improvised housing juxtaposed with the shining new skyscrapers that symbolize India's resurgence. According to the World Bank and the ...

Calls to "do a Lebanon" to fight terror are being made vociferously by the Indian media as they have focused the national and international attention on Mumbai terrorist attacks that targeted two opulent hotels and a small Jewish center in India's financial capital. The need for war on poverty and hunger has never succeeded in getting the kind of media spotlight in India that now shines on the urge to punish Pakistan for its alleged misdeeds in Mumbai. Meanwhile, the daily death and injury toll from widespread hunger in India continues to be much higher than the tragic results of the murder and mayhem in Mumbai. Indian author Arundhati Roy recently brought attention to the tale of two Indias and India's real problems in an OpEd piece for the Guardian newspaper in the following words: "On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was...

Hong Kong-based Political & Economic Risk Consultancy Ltd. has recently rated India as the riskiest of 14 Asian countries, not including Pakistan and Afghanistan, it analyzed for 2009. The Mumbai attacks are likely to worsen India's risk rating, especially if the attacks lead to hostilities with Pakistan and anti-Muslim riots in India. By targeting foreigners and the nation's commercial capital, the terrorists have struck at international links that have supported 9 percent average growth in the $1.3 trillion Indian economy for the past three years. The Mumbai events "couldn't happen at a worse time," Patrick Bennett, a strategist with Société Générale in Hong Kong, told the Wall Street Journal. With the economic growth already slowing to a multi-year low rate of 7% and the national elections approaching in first half of 2009, these attacks have come at a particularly awkward time for the ruling Congress party. The opposition BJP's leader L.K. Advani has...

At 8 feet below sea level, Pakistan's financial capital Karachi shows up on the list of world's mega-cities threatened by global warming. Other South Asian cities likely to come under rising sea water in the next 100 years include Mumbai, Kolkata and Dhaka. The South Asian governments are sufficiently concerned about potential effects of global warming to warrant a meeting to hammer out a regional response. South Asian experts on climate change are beginning two days of talks in Dhaka today, ahead of a meeting of environment ministers from countries of the South Asian Association for Regional Cooperation (SAARC). According to Reuters , Bangladesh has proposed the creation of a fund to fight climate change in densely populated South Asia, which experts say is vulnerable to rising seas, melting glaciers and greater extremes of droughts and floods. For the rich South Asians thinking of fleeing to real estate in Dubai, the forecast for the GCC countries is no better. Experts belie...