Comment by Riaz Haq on January 30, 2013 at 9:57am

Here's an excerpt from The Nation on SBP assessment of FY12:

Pakistan’s economy witnessed a modest improvement in FY12 – real GDP grew by 3.7 percent during the year, compared with 3.0 percent in FY11, says the State Bank’s Annual Report on the State of the Economy for the year 2011-12 released Wednesday.

It said the growth was more broad-based compared to FY11, as it was evenly distributed across agriculture, industry and the services sector.

The demand side was more insightful, as the growth in FY12 was primarily driven by private consumption, it said, adding that strong worker remittances, a vibrant informal economy and higher fiscal spending, supported consumption growth during the year.

SBP Report said that food prices have remained relatively stable during FY12, which helped bring down overall inflation to 11.1 percent – better than the 12.0 percent projected earlier. ‘It was this easing that allowed the central bank to reduce the policy rate by 200 bps during the year; this was done to partially revive private sector borrowing, and encourage banks to improve their intermediation between private savers and borrowers,’ the report added.

According to the Report, the external front was positive as remittances posted yet another year of strong growth, which not only helped narrow the current account deficit, but also contributed to economic activity. ‘In overall terms, the external sector has been less worrying than anticipated at the beginning of the year; however, as financial inflows dried up, the burden of financing the current account deficit and external debt, has fallen on the country’s FX reserves,’ the report added.

While services continued to support the economy, commodity producing sectors (agriculture and industry) posted an improvement over FY11, the Report said, adding that the growth in agriculture came from livestock and kharif crops, but minor crops witnessed a decline due to the floods in Q1-FY12.

It said the positive spillovers from agriculture, coupled with strong remittances and income support schemes, boosted construction activities and household consumption – both of which helped the manufacturing sector. ‘In terms of services, there was a sharp improvement in financial sector earnings, driven primarily by the volume of commercial bank financing of the fiscal deficit, and deceleration in fresh non-performing loans (NPLs),’ the report added.

Among other factors, SBP’s decision to cut its policy rate by a cumulative 200 bps in H1-FY12 was partially motivated by its concern over commercial banks’ reluctance to extend credit to the private sector. However, in the presence of a risk-free dominant borrower, average bank lending rates fell by only 112 bps, which suggest that banks remain apprehensive about (or uninterested in lending to) the private sector, and were willing to accept lower earnings on government securities, according to the report.

It said the actual outcome in the external sector in FY12 was better: a current account deficit of US$ 4.6 billion, and an overall gap of US$ 3.3 billion, meant that Pakistan’s FX reserves fell by US$ 4.0 billion, against an initial projection of US$ 4.4 billion. ‘Nevertheless, this contributed to a 9.1 percent depreciation of the Rupee during the course of the year. The Rupee depreciated from November to late December 2011, and sharply so in the last week of May 2012. The first event may have been triggered by the closure of NATO supply routes to Afghanistan, and sustained by rising oil prices; the second adjustment was a brief market panic in response to international developments. In effect, the Rupee was impacted more by one-off events than the underlying economic fundamentals,’ the report added....

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-onli...

Comment by Riaz Haq on January 31, 2013 at 11:16pm

Here's NY Times on Chinese taking control of Gwadar Port operations:

...The fate of Gwadar, once billed as Pakistan’s answer to the bustling port city of Dubai, United Arab Emirates, has been a focus of speculation about China’s military and economic ambitions in South Asia for the past decade. Some American strategists have described it as the westernmost link in the “string of pearls,” a line of China-friendly ports stretching from mainland China to the Persian Gulf, that could ultimately ease expansion by the Chinese Navy in the region. Gwadar is close to the Strait of Hormuz, an important oil-shipping lane.

But other analysts note that Gwadar is many years from reaching its potential, and they suggest that fears of creeping Chinese influence might be overblown. “There may be a strategic dimension to this, where the Chinese want to mark their presence in an important part of the world,” said Hasan Karrar, an assistant professor of Asian history at the Lahore University of Management Sciences, referring to the management transfer at Gwadar. “But I wouldn’t go so far as saying this implies a military projection in the region.”

The supply lines for the American-led coalition forces in Afghanistan mainly pass through ports farther east in Pakistan and do not involve Gwadar.

Of greater likely concern to Washington was another announcement Pakistan made on Wednesday, saying that it was pressing ahead with a joint energy project with Iran that the United States strongly opposes.

Mr. Kaira said the cabinet had approved an Iranian offer to partly finance the 490-mile-long Pakistan segment of a planned gas pipeline between the two countries. Last year, Secretary of State Hillary Rodham Clinton warned that the project could lead to possible sanctions against Pakistan.

But political analysts in Pakistan saw the announcement as part of Pakistani election politics, and there is wider skepticism that Pakistan can bring the $1.6 billion project to completion. At present Pakistan is suffering from a major energy crisis, including a severe gas shortage that has caused lengthy lines outside fuel stations.

The gas pipeline, which enjoys broad public support, represents positive news for the government of President Asif Ali Zardari before it dissolves in preparation for elections that are expected to take place in May. And although Iran has offered a $500 million finance deal to help Pakistan build its part of the pipeline, Western officials say the Zardari government will still struggle to meet its part of the deal.

Both the Gwadar port and the pipeline to Iran offer the potential of reducing Pakistan’s strategic dependence on the United States, but as yet have failed to deliver.

--

...

http://www.nytimes.com/2013/02/01/world/asia/chinese-firm-will-run-...;

Comment by Riaz Haq on February 4, 2013 at 11:23am

Here's Pakistani response to Joel Brinkley Op Ed published in Chicago Tribune:

Proving its doomsayers wrong is among Pakistan's many overlooked strengths. Mr. Joel Brinkley, a Pulitzer Prize winning journalist, with his article, “Pakistan coming apart at the seams,” (Jan. 22, ChicagoTribune.com) joins the list of the misinformed and the plain wrong about Pakistan. This is unfortunate. It is even more unfortunate that he mistakes the coming of age of Pakistan's democracy, with its promise of political and economic stability, as a sign of failure. He cites numerous examples of the apparent dysfunction in Islamabad, as if Islamabad is only capital city in the world suffering from that disease.

This is not to deny that Pakistan faces numerous, and in some cases, unique, challenges. Mr. Brinkley attempts to list some of these also. What eludes him is the fact that Pakistan is meeting these challenges head on while constructing the edifice of a modern democratic state.

The Parliament, the most active in Pakistan’s history, is about to conclude its five-year term, paving the way for the first peaceful transfer of power in the country’s history. It cleansed Pakistan’s constitution of the debris of past non-representative regimes while also addressing longstanding constitutional and political issues threatening the federation. This Parliament has passed more legislation on human rights and women’s rights than all of Pakistan’s previous parliaments combined.

The economy continues to grow despite the burden of a full scale war against terrorism, the effects of some of the biggest natural disasters ever to hit Pakistan and the global economic slowdown. Pakistan expects a growth rate of around 4 percent in 2013 despite these challenges. The Pakistani stock market is among the most productive and profitable in the world. On most indicators of economic vigor, resilience and strength, Pakistan continues to perform well. Pakistan’s teledensity is one of the highest in the region. Users of broadband Internet and social media continue to grow exponentially, not only providing the masses entertainment, but empowerment.

Consumer spending remains robust. Many American companies have invested in Pakistan and are generating impressive profits.

The judiciary, long a rubber stamp of dictators, stands proud and independent, hauling the very intelligence agency Mr. Brinkley calls “mendacious” before it. And despite its perceived ‘mendacity’, the agency submitted itself to the court. This had never happened in Pakistan’s history before. Similarly, when a disagreement arose between the court and the government, the latter, in the true spirit of democracy and accommodation, accepted the court’s verdict. This speaks of a political maturity hitherto absent from Pakistan’s political discourse.

The social scene is no less impressive. Pakistan’s pop music industry is bigger than that of India. Pakistani students top international examinations. Pakistani sports teams, for both men and women, continue to record wins. In short, Pakistan is a vigorous, resilient nation, working hard to put a turbulent past behind and become a modern, democratic, and economically prospering country.

I challenge Mr. Brinkley to name one country with which he has bracketed Pakistan as a failed state that has these attributes. It is one thing to see a half-full glass as half-empty. It is quite another to see nothing in it. Sometimes, it seems, the real challenge Pakistan faces is not defeating terrorism, strengthening democracy, and generating economic growth, but convincing reporters to report impartially about it rather than seeking to regale public opinion with preconceived notions and worn out stereotypes.

http://articles.chicagotribune.com/2013-02-01/news/chi-20130201-hot...

http://articles.chicagotribune.com/2013-01-22/news/sns-201301221330...

Comment by Riaz Haq on February 13, 2013 at 11:05pm

Gold imports in Pakistan up 23% July-Nov 2012, reports Daily Times:

KARACHI: Yellow metal imports during July to November 2012 in the country increased by 23 percent or Rs 7.12 billion as against Rs 5.78 billion in July to November 2011, precious metal importers said on Thursday.

The traders imported around 1,393 kilogrammes (kgs) of gold during this period, they added.

In November 2012, gold imports stood at 298 kgs worth Rs 1.57 billion, which was up around 357 percent as compared to November 2011.

Due to lower international prices of the yellow metal, import reamined on the higher side in November 2012 as it dipped around $128 an ounce, said a metal expert in London Saleem Ahmad.

Usually yellow metal importers make deals for the precious commodity with traders in Dubai, India and South Africa.

Major deals are made with Dubai based gold traders while due to lower gold future prices in India, the domestic traders also made deals. In India the gold prices are hovering around Rs 32,000 per 10 grammes while in Pakistan 10 grammes of gold is available at around Rs 53,200.

Rising demand in domestic markets for the wedding season also pushed gold imports up besides declining international prices also attracted the domestic importers to fortify their long position in anticipation of futures rising prices. Gold remained a haven for the hedging purpose besides it is the safest investment for hedgers as compared to stocks, where shares prices are always uncertain.

Gold prices in Pakistan bullion market are hovering at around Rs 62,200 per tola. Safest haven for investment hedging became the driving force behind buying, he added.

The yellow metal import’s rise was attributed to large buying by institutional and hedge fund that kept the momentum of the gold price to go up besides physical buying from India and China.

Hedging in gold is still on the higher side as it touched a new high around 80 percent in 11 months of 2012.

Meanwhile, the gold importers demanded of the government to announce duty cut on import of the commodity.

The government should announce around Rs 100 per tola duty cut in order to lower its prices in the domestic market besides providing relief to exporters of gold ornaments in the international market.

Currently the duty on import is around Rs 550 per tola and due to higher dollar value against the rupee, the local demand for the commodity is declining.

The government should provide duty relief on 3.0 kgs imports of gold on every 10 kgs of jewellery exports, exporters demanded.

Gold is expected to touch $1,800 an ounce in the next year or so on back of the Fed measures to boost interest in gold exchange-traded funds, among the vehicles that issue securities, backed by physical metal.

http://www.dailytimes.com.pk/default.asp?page=2012\12\28\story_28-12-2012_pg5_3

Comment by Riaz Haq on February 13, 2013 at 11:11pm

Gold imports up 29.15% in first half of FY 2012-13:

ISLAMABAD: The gold imports of Pakistan during first half of current fiscal year grew by 29.15 percent as against the same period of last year.

According to data revealed by Pakistan Bureau of Statistics (PBS), the yellow metal weighing 2054 kilogram worth of $111.185 million was imported during the period under review as compared to the import of 1594 kg valuing $86.091 million during same period of last year (2011-12).

On month on month basis the gold imports in December 2012 registered an increase of 85.56 percent and 121.96 percent when compared to the imports during the months of December 2011 and November 2012 respectively.

Gold imports in December 2012 stood at $36.373 million against the imports of $19.602 million and $16.387 million in December 2011 and November 2012 respectively. The overall imports of metal group, registered an increase of 11.03 per cent during July-December (2012-13) against the same period of last year.

The metal imports in to the country during the period under review were recorded at $1.529 billion against imports of $1.38 billion during same period of last year. Imports of iron and steel scrap registered a growth of 18.27 percent during July-December (2012-13) as compared to the imports during July-December (2011-12). Iron and steel scrap imports into the country were recorded at $336.839 million during the first six months of current fiscal year against imports of $284.803 million during July-December (2011-12).

Imports of iron and steel edged up by 5.16 percent by growing from $653.196 million to $686.899 million whereas the imports of aluminum wrought and worked decreased by 7.24 percent by going down from $60.453 million to $56.074 million. The imports of all other metal and articles were recorded at $337.84 million during the period under review against the imports of $292.393 million in last year posting a growth of 15.54 percent.

The overall imports into the country decreased by 3.33 percent during first six months of current financial year whereas exports from the country witnessed positive growth of 7.58 percent, indicating a positive trends in the overall trade volume of the country.

The imports into the country decreased from US$22.677 billion last year to US$21.922 billion during the current fiscal year, the data revealed.

http://www.thekooza.com/pakistan-gold-imports-grow-by-29-15-during-...

Comment by Riaz Haq on February 22, 2013 at 9:36pm

KSE-100 is hitting new highs even as Sensex is at two-month lows. Here are a couple of reports:

Dawn:

18,000 points, boosted by buying from foreign fund managers in the last few days.

The Karachi Stock Exchange’s (KSE) benchmark100-share index ended 0.86 per cent, or 153.25 points, higher at 18,074.27.

Around 370 million shares were traded, mostly in telecoms companies. Both Pakistan Telecommunication Corporation and Engro Corporation closed at their upper limit.

Their stocks were boosted by news that the courts had approved a rise in international call rates and that the Engro would receive a steady gas supply. Pakistan suffers from chronic gas and electricity shortages.

Some correction was witnessed in oil stocks due to falling international oil prices, said equity dealer Samar Iqbal at Topline Securities.

World Call Telecom rose 2.7 percent to 3.80 rupees and Pakistan Telecommunication Corporation rose 4.99 percent to 23.97 rupees.

In the currency market, the rupee ended at 98.06/98.12 against the dollar, stronger than Thursday’s close of 98.13/98.18.

Overnight rates in the money market rose to 9 per cent from Thursday close of 8.50 percent.

http://dawn.com/2013/02/22/pakistani-stocks-rally-past-18000-mark/

Daily Times:

Sensex marks lowest close in two months; budget eyed

MUMBAI: The BSE Sensex fell for a second session on Friday to its lowest close in two months, led by declines in HDFC after Goldman Sachs downgraded the stock to “sell”, while ITC fell on fears of a hike in excise duty for tobacco in the upcoming budget.

Shares are expected to be range-bound ahead of the 2013-14 budget, to be unveiled on February 28, and investors will watch whether the finance minister will manage to impose fiscal discipline even as the government tries to revive growth.

India has targeted a fiscal deficit of 4.8 percent of gross domestic product for the year starting in April, but budget details will also be key given an austerity push could add to inflationary pressures, hampering chances for rapid interest rate cuts.

Global risk factors will also be key given domestic shares on Thursday posted their biggest fall since July on worries about whether the US Federal Reserve will continue its bond buying programme.

“One should closely watch how the finance misister balances populist and pragmatic expectations, especially that on fiscal consolidation,” said Vijay Kedia, director at private wealth management firm Kedia Securities.

Announcements have to turn into action otherwise global risk aversion might lead to redemptions even at FII desks, Kedia added.

The benchmark BSE Sensex fell 0.04 percent, or 8.35 points, to end at 19,317.01, after falling 0.77 percent for the week, marking a fourth week of falls.

The broader Nifty fell 0.03 percent, or 1.95 points, to end at 5,850.30, also ending 0.63 percent lower for the week.

Housing Development Finance Corp Ltd (HDFC.NS) fell 1.9 percent, its biggest single day fall since January 11, after Goldman Sachs cut its rating on to “sell” from “neutral”, on expectations that Asia’s third-largest economy would recover at a “modest” pace and the prospect of rising competition.

ITC Ltd (ITC.NS) fell 1.6 percent, marking a third day of losses, on continued fears of a hike in excise duty in the upcoming budget, as the government aims to increase its tax collections to offset some of its revenue shortfall.

Jet Airways (JET.NS) fell 5.7 percent on continued concerns about whether the carrier will clinch a stake sale to Abu Dhabi-based carrier Etihad Airways. Shares have fallen 14.5 percent for the week - their biggest weekly loss since August 28, 2012.

http://www.dailytimes.com.pk/default.asp?page=2013\02\23\story_23-2-2013_pg5_19

Comment by Riaz Haq on March 4, 2013 at 10:21am

Here's Gulf News on various sectors of the economy in Pakistan:

Naveed Vakil, director, research and business development, AKD Securities:

Oil and Gas Development Company Limited (OGDCL): Dollar-based returns and a firm oil price outlook should keep returns high, especially as key development projects come online and the monetisation of recent finds is fast-tracked.

Pakistan Oil Fields (POL): [Its performance is closely linked] to international oil prices that are likely to remain firm in the near term as demand growth recovers, especially from China. POL also offers exposure to Pakistan’s Kohat Basin which is where there has recently been a string of discoveries have been high impact.

Pakistan Telecommunication Company Limited (PTCL): PTCL should post strong earnings growth this year, due to higher margins following the implementation of higher international incoming call rates. Infrastructure is being installed to curtail grey incoming international traffic, which should support legitimate volume as well.

Lucky Cement: Pakistan’s largest cement company should continue benefitting from a rise in domestic consumption led by development spending ahead of the elections. It should benefit from high margins as domestic cement prices remain firm while coal costs remain low.

Furqan Punjani, deputy head of equity research at BMA Capital Management Limited:

Oil and gas

Robust oil prices coupled with [increasing production volumes should] keep the oil and gas exploration and production sector in the limelight in next few years. Revenue streams linked to the dollar and local currency depreciation would also help augment bottom-lines in the sector. We prefer Pakistan Oilfields and Pakistan Petroleum because of their better dividend yields.

Textiles

Based on better exports prospects and higher profit margins (on low cost cotton) as well as a promotion in the gas allocation list by the government, the textile sector has made it onto our list of top investment ideas for 2013. Nishat Mills is the biggest integrated textile unit in Pakistan and will continue to benefit from its well-diversified core operations and the good potential of its portfolio holdings.

Fertilizer

We believe the fertilizer sector presents an ideal mix of defensive and high-growth plays for 2013. Our top pick in the sector is ENGRO.

Cement

Cement prices are currently at an all-time high of Rs440(Dh16.27) a bag. We like companies that can magnify top line growth into the bottom-line, thanks to the deleveraging of their balance sheet. This makes DGKC.PA our top pick in the sector.

Energy

Pakistan is an energy deficit country and the entire production of independent power producers (IPPs) is consumed on any given day. Moreover, with higher and regular subsidies from the government translating into better cash inflows, the sector has once again come into limelight. Furthermore, as revenues and profits are linked to the dollar, the depreciating Pakistani rupee will also benefit this sector. We prefer Hub Power Company, the largest private sector power producer of Pakistan, because of its higher dividend yields and stable bottom-line.

Commercial banks

The Central bank of Pakistan has reduced the base [interest] rate by 450 basis points in the last 24 months. This has reduced the net interest margins of the entire banking sector, barring a few large banks that have the ability to reduce the rates provided to their depositors and keep attracting fresh deposits at lower rates. United Bank Limited is one of them. We prefer UBL [because] of their ability to grow their deposits by double digits at lower cost, coupled with their greater exposure to high yielding long term government bonds. Furthermore their quarterly payout will continue to lure value investors to the bank. ....

http://gulfnews.com/business/investment/politics-set-to-boost-pakis...

Comment by Riaz Haq on March 8, 2013 at 9:45pm

Here's an ET report on Elixir Securities CEO's projections for Pak equities:

KARACHI: The sales pitch employed by Elixir Securities CEO Junaid Iqbal to global fund managers at the Pakistan Capital Markets Day in New York last month was simple: even if the incumbent government returns to power after the upcoming elections, the Karachi Stock Exchange (KSE)-100 Index is still likely to post returns of over 21% in 2013.

In case a more pro-business government – supposedly led by the PML-N – comes into power, the stock market will rerate from the current multiple of 6.9 to 7.9, if the projections of the Elixir Securities research team are to be believed. That would push the index to 23,200 points by the end of 2013, which translates into an annual return of 38%.

In the best-case scenario, wherein the new political leadership tries to fix the taxation system in its first months in power, Elixir Securities estimates the KSE-100 Index will likely touch 26,000 points by December 2013, which means a staggering 54.8% annual return.

“The market is operating at an average multiple. In the absence of any leverage, there are no associated risks. It is being driven purely by earnings growth right now,” Iqbal told The Express Tribune in an interview.

Initially planned as a one-day event (hence named the Pakistan Capital Markets Day), Elixir Securities’ two-day road show in the global financial centre was attended by 35 fund managers, partners and principals from 25 major international asset management companies and hedge funds. Elixir Securities also took along representatives from Engro Corporation, Engro Foods, Lucky Cement and United Bank Limited. Iqbal was accompanied by the heads of his research and sales departments.

“All of them wondered how Pakistan’s capital markets could perform so well amidst bombings and violence,” he said, while noting that the KSE remained the third best-performing stock exchange of the world in 2012 by posting 37% returns in dollar terms, despite political instability and frequent terrorist attacks.

“I told them, honestly, that we cannot defend Pakistan on its human rights record: but the fact remains that the annualised growth in profits of the corporate sector for the last four years has been 17%,” he said.

“They understand that a political metamorphosis is taking place in Pakistan. At the same time, they are supremely impressed by the quality of management in our corporate sector,” he added.

Without naming the funds or giving their exact number, Iqbal said many of the companies he interacted with in New York have already consented to visit Pakistan in the near future. He said that it is not possible to state the exact amount of foreign institutional portfolio investment that is likely to come in as a result of his road show, but added that he was confident that investment will soon be coming into Pakistan’s capital markets.

He cited two reasons: firstly, all of the participants, which included some of the largest global funds, had sent their senior team members – something that shows how seriously they viewed Pakistan’s financial sector. Secondly, he noted, they were all ‘knowledgeable investors’ who had already developed deep understanding of issues ranging from the suspension of gas to Engro’s $1.1 billion fertiliser plant, to turf wars in Karachi involving the People’s Aman Committee.

“Pakistan is already on their radar. Our market will skyrocket once the law and order situation improves,” he said.

http://tribune.com.pk/story/517892/elixir-securities-bullish-on-kse...

Comment by Riaz Haq on March 11, 2013 at 9:35pm

Forget the BRICs; Zambia, Estonia and Pakistan are the place for alpha investors, argues former Golaman Dachs executive Dambisa Moyo in a piece on Quartz.com :

The search for superior, uncorrelated risk-adjusted returns continues, and savvy investors such as endowments and family foundations are turning their attention to the frontier markets. Such markets exclude the BRICs, many of which posted sizable equity returns of over 30% last year, including Nigeria, Estonia, Pakistan, and Kenya. The MSCI Africa sub index posted one-year returns of over 60%. By comparison, the BRICs (Brazil, Russia, India and China) grew slower and sluggish—for example, around 4% on the Shanghai index and -2% on Brazil’s Bovespa.

A set of well-known factors bind these seemingly random countries. Solid debt and deficit dynamics; attractive labor trends, favorable demographics and upward mobility; and important productivity gains all make for a compelling economic growth story. However, there are two areas where perceptions of frontier economies are really changing: risk and liquidity.

In regards to risk, investors are beginning to better understand the significant benefits of delineating between risk, measurable and possible to calculate, and uncertainty, which is not. Like anywhere else, investors who can tap into on-the-ground networks and relationships have an advantage with risk management. But thankfully meaningful, the task of risk assessment has gotten easier with increases in transparency around economic and political information, data flows and widely available regulations over jurisdictions. The transition to western-styled democracy and fully transparent and liquid capital markets will be bumpy, but the uncertainty arising from these growing pains should be viewed in the context of an upwardly sloping trend line of progress which will almost certainly occur over a relatively short time line.

Correlations between frontier and developed stock market returns are around 0.75, compared to roughly 0.90 between developed and emerging economies such as the BRICs. Country risk premiums are close to those of the broader emerging markets. With proper risk management tools, this implies that investors can garner significant diversification benefits. The lower correlation between frontier and developed markets points to risk factors that are orthogonal to the global risk-on, risk-off theme that has captivated markets over the past five years. Frontier markets provide opportunities to step away from the global macroeconomic themes and focus on the micro stories on the ground, thus providing a better environment to identify unique investment opportunities. Smart investors are looking for great opportunities that are driven by company-specific issues from which they can analyze and profit.

In terms of liquidity, both equity and debt markets – international and local – have grown considerably over the last five years. Today, with a market cap of more than $1 trillion, the universe of stock markets boasts more than 8,000 listings across broad sectors with notable risk/reward profiles in financials such as banking and insurance, consumer goods, and telecommunications companies. A number of commentators erroneously believe investing in frontier markets is simply expressing a commodity trade. To assume this would be miss out on some of the more significant opportunities in these burgeoning markets such as in the logistics and telecommunication sectors. Moreover, to put a finer point on this, today Africa has almost 20 stock exchanges, with just over a thousand listed equities; more than 85% of these stocks are non-commodity related businesses....

http://qz.com/61403/forget-the-brics-frontier-markets-like-estonia-...

Comment by Riaz Haq on March 29, 2013 at 10:13pm

Here's a PakistanToday report on KSE-100 performance in Q1-2013:

KARACHI - Hopes for change in the political setup along with strong foreign inflows were the major drivers of the country’s equity market during the first quarter of calendar year 2013 (1Q2013).
The market observers believe that while the May 11 election are around the corner, the equity investors were cautiously looking at the fast-changing political developments in the country. “We anticipate market activity to hinge on political temperature of the country,” viewed Topline analyst Nauman Khan.
The heightened investors’ confidence was also attributed to significant reduction in the policy rate that had facilitated the funds flows towards equity market, said the analysts.
The benchmark KSE 100-share index posted a gain of 6 percent, 5 percent in dollar terms, during the quarter to close at 18,043 and overall market capitalization reached Rs4.4 trillion or $45.2 billion.
“Though the index made a new high of 18,185, on March 01, 2013, the market capitalization was still seven percent, 40 percent in dollar terms, down from its record high of Rs 4.8 trillion ($74.9 billion) achieved on April 18, 2008,” said Khan.
With index achieving our midyear target of 18,000, we re-iterate that index can make a new high by crossing 19,500 in calendar year 2013 as mentioned in our strategy note date December 12, 2012. Abrupt PKR deprecation due to weakness in external account remains the major risk to our assessment.
The positive momentum was accompanied by higher traded volumes. During 1Q2013, average daily traded volumes stood at Rs5.7 billion (US$58.4 million) which compares favorably with Rs4.5 billion (US$46.6 million) recorded in the previous quarter. The average traded volumes are the highest in last 12-quarters.
In terms of shares, average volume stood at 210.6 million which is up 25 percent from preceding quarter, while are highest since 1Q2008 (19-quarters high).
In addition to higher foreign buying, we believe increased participation by individual investors have also contributed to improved depth of the market. Individual participation on an average improved to 50 percent in 1Q2013 as against 48 percent in the preceding quarter.
The foreigners, that hold $3.3 billion worth of Pakistan shares that is 31 percent of free-float and 8 percent of market capital, remained net buyers in 1Q2013.
The offshore investors in the quarter bought shares worth $228 million and sold $158 million resulting in net buying of $70 million as of March 28.
The numbers compare favorably with $65 million net inflow registered in previous quarter.
Giving their future outlook, the analysts reiterated that the market participants were likely to cheer signs of change in the political setup. “Mid caps with high leverage and consumer related business can perform better than large caps in 2013,” said Khan.

http://www.pakistantoday.com.pk/2013/03/30/news/profit/equity-marke...

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