South Asia Investor Review

Fearing a complete meltdown of stock prices at Karachi Stock Exchange, Pakistan's Securities and Exchange Commission imposed a floor of 9144 for the market's benchmark KSE-100 index. The index closed at 9144 level on Wednesday, Aug 27, the day the KSE and SEC announced their decision to not allow the KSE-100 to trade below this arbitrary level. This extraordinary action, the first of its kind since the exchange opened its doors in 1948, came after investors pushed down the index to its lowest level in more than two years. Karachi stock exchange saw very thin trading on Friday and the KSE-100 index finally closed at 9,208.26 points, with a meager gain of 4.48 points. The KSE-30 index increased by 15.87 to close at 10,198.05 level. The KSE-100 has lost 34.6% of its value this year, as investor confidence has been been hurt by political uncertainty and a long list of economic troubles, including skyrocketing inflation, disappearing foreign exchange reserves, declining rupee and a...

"We have recently commenced proceedings against parties involved in the production and distribution of a movie entitled Hari Puttar," Warner Bros spokeswoman Deborah Lincoln told The Hollywood Reporter. "Warner Bros values and protects intellectual property rights. "However, it is our policy not to discuss publicly the details of any ongoing litigation." Hari Puttar, made by Mirchi Movies of India, tells the story of a 10-year-old Indian boy, named Hari, who moves to England with his parents and becomes embroiled in a battle over a secret microchip. The boy, left home alone, fights off burglars when his parents go away on vacation - a plot more reminiscent of the popular film Home Alone, starring Macaulay Culkin. In response to the Warner Bros. lawsuit, Munish Purii, chief executive officer of Mumbai-based producer Mirchi Movies, said, "There is absolutely nothing to link Hari Puttar with Harry Potter." Hari is a common name in India and puttar is Pun...

Mobile application developers and high-bandwidth wireless data network operators are being dramatically boosted by latest innovations, growing popularity and rising demand of smartphones such as iPhone, Blackberry, Palm Treo and other mobile platforms. Some 10 percent of phones shipped worldwide — and some 19 percent of phones sold at retail in the United States — are smart-phones. Taiwanese smartphone maker High Tech Computer Corp. (HTC) expects its sales in India to double in 2008, from 100,000 in 2007 to 200,000 in 2008. Although reliable figures are not available, Blackberry is finding traction in Pakistan and HTC is promoting its low-cost smartphones. Overall, there is room for substantial growth. In terms of wireless voice and data, markets with large populations and relatively low penetration rates, such as India, China, Philippines, Pakistan, Vietnam and Indonesia, will continue to grow at a rapid rate, according to an Aug 2008 report by Paul Budde Communication Pty Ltd. Each ...

Jayant and Rajat Agarwalla, the Calcutta-based developers of the Facebook application Scrabulous, have lashed out at Facebook for worldwide removal of their popular creation. With over half a million users, Scrabulous is likely the most popular online version of Scrabble (Hasbro's own Facebook version of Scrabble, which was released in July, has a little over 9,000 users). The Agarwalla brothers have a point: Why did Facebook yield to bullying by Mattel in the absence of a court order? The Indian brothers are not alone in their criticism. Prof. Peter Fader, co-director of the Wharton Interactive Media Initiative, told the Knowledge@Wharton online business journal that Hasbro’s move was an “incredibly bad business decision.” Scrabulous “has been such a fabulously good thing for the Scrabble franchise [that] Hasbro should have been celebrating. ” The Wharton online article notes that Scrabulous in 2007 had about 1.3 million monthly users and had 600,000 players each day.Not only is H...

India's Suzlon Energy (SUZL: BSE), with 8% market share of wind turbines in the US, is beset by quality issues at home and abroad, according the Wall Street Journal. Suzlon Energy, with market cap of INR 270B, is a wind power company in India. In terms of market share, the company is the largest wind turbine manufacturer in Asia and the fifth largest worldwide. With headquarters in Pune it has several manufacturing sites in India including Pondicherry, Daman, Bhuj and Gandhidham as well as in mainland China, Germany and Belgium. The company is listed on the National Stock Exchange of India and on the Bombay Stock Exchange. The window of opportunity for Suzlon opened up with growing demand for green energy amid global-warming fears and the soaring cost of oil, coupled with shortages of turbines from more established players. The company's less-expensive turbines raised hopes for a reduction in the cost of wind power, which currently is subsidized in many countries, including the...

It may not be any consolation to an average Pakistani but Pakistani economy is not alone in returning to the bad old days . Sri Lanka is keeping pace with Pakistan. While Sri Lanka's long running civil war has largely been limited to the north and east, leaving the populous, well-off west largely unscathed, its stresses are beginning to show in the island nation's economy. The Economist reports that Sri Lanka's annual inflation is close to 30%, the highest in South Asia. The rupee has appreciated against the dollar, further hurting exporters. By one estimate, economic growth—which was 7.6% in 2006—will be 4.3% this year. As elsewhere, inflation is being driven by high food and energy prices. But in Sri Lanka, 25-year average annual inflation is 12%. Monetary policy has been too loose, in part to finance the war. Including the cost of resettling refugees, the war eats up around 30% of the government’s budget. Sri Lanka's exports and economy have been propped up by specia...

Regardless of the criticism of President Musharraf's politics or personality, there is general agreement among independent economists that, through his structural reforms and economic management , President Musharraf left Pakistan's economy in much better shape than he found it when he seized power in 1999. Here are some of the key highlights of the results of Musharraf era economy: 1. Pakistan's tax base and government revenue collection more than doubled from about Rs. 500b to over Rs. 1 trillion. 2. Pakistan's GDP more than doubled to $144b since 1999. 3. Most recent figures in 2007 indicate that Pakistan's total debt stands at 56% of GDP, significantly lower than the 99% of GDP in 1999. 4. Pakistan attracted over $5 billion in foreign direct investment in the 2006-07 fiscal year, ten times the figure of 2000-01. Contrary to accusations by Musharraf's detractors that it was an artificial consumer-led growth, it was really an investment-led boom that Pakistan...