Pakistan Stocks, Cheapest in Asia, May Advance 23% by Year-end

[T-Faz]

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April 9 (Bloomberg) -- Pakistan’s stocks, the cheapest in Asia, may advance by 23 percent in the next eight months, buoyed by overseas funds and improved company earnings, according to National Investment Trust Ltd.

“All the fundamentals indicate that the market will pare most of its losses of the past two years” and reach 13,000 by end-December, Manzoor Ahmed, who manages the equivalent of $857 million as head of asset management at state-owned National Investment, Pakistan’s largest equity fund, said in an interview yesterday. “The economy is in a good recovery phase.”

Pakistan’s benchmark Karachi Stock Exchange 100 Index trades at 8.75 times future earnings, the lowest in Asia, according to Bloomberg data. A Taliban guerilla offensive has killed hundreds in a nation that’s been ruled by the army for half of its existence since 1947, when it gained independence.

The KSE100 rose 0.5 percent to 10,589.26 as of 12:13 p.m. in Karachi, from yesterday’s close of 10,533.57. Still, its 41 percent lower than its record in April 2008.

Oil companies, power generators and lenders may lead gains in Pakistan’s stocks this year, said Ahmed, without naming any.

The KSE100 index sank as much as 69 percent from its peak after the Karachi Stock Exchange restricted trading for four months from August 2008 to prop share prices up.

The gauge has climbed 13 percent this year, extending last year’s 60 percent advance as overseas investors bought more equities in South Asia’s second-largest economy. Gross domestic product may grow 3.4 percent in the financial year ending June 30, after a 2 percent gain in the previous year, according to the Finance Ministry.

Inflation, Politics

Stock gains may be limited if accelerating inflation prompts the central bank to raise borrowing costs, while a struggle between the nation’s top politicians, President Asif Ali Zardari and opposition leader Nawaz Sharif, a former prime minister, may limit the government’s ability to implement policies aimed at buoying the economy, Ahmed said.

Foreign investors bought net $176.6 million of Pakistan stocks between Jan. 1 and April 8, after selling a net $237.4 million in the same period last year, according to stock exchange’s National Clearing Company of Pakistan Ltd.

The KSE100 Index plunged 58 percent in 2008, its first annual decline since 2001. Pakistan needs to expand at an average 6 percent pace over the next five years to cut poverty, according to the government.

--Editors: Margo Towie, Linus Chua.

To contact the reporter on this story: Khalid Qayum in Islamabad at at [email protected].

To contact the editor responsible for this story: Stephen Foxwell at at [email protected].
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Pakistan Stocks, Cheapest in Asia, May Advance 23% by Year-end - BusinessWeek

More bump for the KSE, lets hope the investors stay in for the long haul. I know Pakistan has so much potential, its just these pesky problems that dodge us all the time. But soon we will be one of the economic tigers again.

[Zakii]

and the stock market is funny.............. only this news is enough for it to take it beyound 11,000 points

[SMC]

Pakistan has great potential which is restricted by corrupt government, foreign sanctions and terrorism. If the potential has the room to materialize, Pakistan can grow very quickly at rates of 6-9% and be a major economy in the next few decades.

[Donatello]

The middle class doesn't have enough money in savings to invest in stock markets which are being run by the few elite of the country. What's the point in investing your life savings here? Where people like you know who, can manipulate the Stock Markets as big as the KSE.

[T-Faz]

The middle class doesn't have enough money in savings to invest in stock markets which are being run by the few elite of the country. What's the point in investing your life savings here? Where people like you know who, can manipulate the Stock Markets as big as the KSE.

There is'nt a country in the world where the middle class have enough savings to invest in stocks, even if they do it is definately not enough to provide healthy return or dividends.

All the stock markets of the world are run by a few elite so I do not know why you are singling out Pakistan.

The reason this is good is that its like a cycle where the economy improves and the people of the country benefit.

If you do not have anything good to say then do not say anything at all.

[Zakii]

if a small effort is made to utilize our natural resources i am sure we can increase our exports multi times in a matter of months/year. All we need to do is allocate some part of our budget to utilize our coal, copper and gold reserves and within an year or two we will be able to benefit from it and reduce buying expensive oil and decrease our import bill. By exporting little bit of Coal and copper we can easily increase our exports dramatically

[Donatello]

There is'nt a country in the world where the middle class have enough savings to invest in stocks, even if they do it is definately not enough to provide healthy return or dividends.

All the stock markets of the world are run by a few elite so I do not know why you are singling out Pakistan.

The reason this is good is that its like a cycle where the economy improves and the people of the country benefit.

If you do not have anything good to say then do not say anything at all.

I think that YOU will also include you....

With due respect,

My family has invested/traded heavily on the KSE. From our experience, the stock markets can be brought down within a few minutes because of some people owing to the insider trading. What i meant was that such moves rips the middle class of their investments as they work hard to earn every Rupee. Middle-class in Pakistan is very different than the one in USA or UK. Why do you think a lot of South Asians settle for Jobs in the Western Countries? Because they feel more secure with their finances and investments.


Yes i study and live in the USA after spending 20 years in Pakistan. At least they have some sort of regulations. Remember the great gains of KSE a few years back and then the crash, and government scrambling to change the laws, flooring etc? A lot of good people lost a lot of their money. What happened to those insiders? Were they caught?

[Zakii]

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I think that YOU will also include you....

With due respect,

My family has invested/traded heavily on the KSE. From our experience, the stock markets can be brought down within a few minutes because of some people owing to the insider trading. What i meant was that such moves rips the middle class of their investments as they work hard to earn every Rupee. Middle-class in Pakistan is very different than the one in USA or UK. Why do you think a lot of South Asians settle for Jobs in the Western Countries? Because they feel more secure with their finances and investments.


Yes i study and live in the USA after spending 20 years in Pakistan. At least they have some sort of regulations. Remember the great gains of KSE a few years back and then the crash, and government scrambling to change the laws, flooring etc? A lot of good people lost a lot of their money. What happened to those insiders? Were they caught?

bhai sayanay log kehte hain "Practice makes man perfect" usually most of the brokers are providing you free practice accounts for you to be familiar with the system. Trading in stock markets is not that easy. As i always say Forex (or stock exchange) is like a women that you cannot understand in your whole life. The more you think you have understand the more you will get confused. The smart peoples are only those who know some technical analysis nd can predict about the next week (day or even month depending upon your skills).

Usually 98% peoples lose money because they practice before they start trading. They know only a little about these stock exchanges and usually works on LUCK only remaining 2% are the successful traders

I undertand investing from a middle class family is like putting your self on sale but if they use their brain and master the art before entering for real money......... anybody can make money.