South Asia Investor Review

In a resounding vote of confidence for Prime Minister Manmohan Singh's continuing leadership, Indian and international investors are celebrating with 17% jump in the 30-share BSE index, or 2,110.79 points, to 14,284.21 points, for its highest close since Sept. 11. Trade was finally halted for Monday before noon. Here are the key headlines from Reuters about strong and positive investor reaction in Mumbai: * Stocks jump 17 pct, biggest rise in 17 years * Circuit breakers halt trade twice; markets closed early * Rupee up 9 percent from low in early March * Morgan Stanley raises stock, growth projections * Bond yields drop, stake sales seen to fund deficit Next door in Pakistan, the investor reaction to news of the day was muted and the KSE-100 remained essentially flat. Karachi Stock Exchange (KSE) was up in the morning but then the sellers came in on Monday and the benchmark KSE-100 Index closed 5 points down to 7,172. Amidst major counterinsurgency operations in and around Swat ...

A Tale of Two Pakistans: A little more than six years ago, immediately after the Sept. 11 attacks on U.S. cities, few sane investment advisers would have recommended Pakistani stocks. They should have. Their clients could have made a fortune. Since 2001, the nuclear-armed South Asian country, blamed for spawning generations of Islamic militants and threatening global security, has been making millionaires like newly minted coins. As Western governments have fretted about Pakistan's nuclear weapons falling into the hands of militants, the Karachi Stock Exchange's main share index has risen more than 10-fold. And it is not just that Karachi is a thinly traded market, able to be dragged skyward at time by speculators. Profits have taken off as well. Even last month's assassination of opposition leader Benazir Bhutto, and the brief but terrifying tornado of violence it unleashed, failed to make much more than a dent in the market. Businessmen are more worried than brokers, but ...