• Sunday, December 15, 2019

Foreign investors rush into Pakistan, with inflows surging 200% in first half of the year

Discussion in 'Central & South Asia' started by beijingwalker, Dec 4, 2019.

  1. beijingwalker

    beijingwalker ELITE MEMBER

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    Foreign investors rush into Pakistan, with inflows surging 200% in first half of the year
    4 Dec, 2019 08:45
    [​IMG]

    Pakistan has seen unprecedented inflows of foreign money this year. Global investors bought 1-year bonds worth $642 million in November alone.

    That is expected to reach a record $3 billion by the end of the fiscal year as investors are lured by high interest rates and promises of economic reform.

    According to Abdul Hafeez Shaikh, financial adviser to Prime Minister Imran Khan, foreign direct investment surged 200 percent in the first half of 2019. Stocks have also risen, with the main Karachi stock index up by 13 percent over the past month, making it the best-performing stock exchange of the 94 tracked by Bloomberg.

    “A double-digit yield on a cheap currency is a good value trade in itself,” Charles Robertson from Renaissance Capital told Deutsche Welle. “I would recommend investors keep buying Pakistan while it offers double-digit interest rates,” he said.

    Robertson added that even central bank rate cuts of a few percent would still make Pakistan interesting. “The current policy choices of Pakistan offer the country the best chance of getting onto a sustainable growth path. Borrowing costs are lower thanks to foreign investors buying government debt.”

    Central bank data showed that of 1-year papers bought in November, 55 percent were from the UK and 44 percent from the US.

    Habib Bank CEO Muhammad Aurangzeb said that Pakistan plans to issue $1 billion worth of ‘Panda bonds’ in the first quarter of 2020 in the Chinese market for the first time in yuan. A Panda bond is a Chinese renminbi-denominated bond from a non-Chinese issuer, sold in China.

    This week, Moody’s upgraded Pakistan’s credit outlook from negative to stable, saying the financial situation is on a path of improvement. It also expressed hope that the help from the International Monetary Fund (IMF) will mitigate the risks to its economy. Last month, Islamabad secured another tranche from the IMF as part of a $450-million loan package.

    The experts at Moody’s said the country’s economic recovery reduces “external vulnerability risks,” but warned that “foreign exchange reserve buffers remain low and will take time to rebuild.”

    https://www.rt.com/business/474966-investors-pile-into-pakistan/
     
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  2. Chakar The Great

    Chakar The Great SENIOR MEMBER

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    We are headed in the right direction. I hope government stays focused on economy.
     
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  3. Salman Baig

    Salman Baig FULL MEMBER

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    Who will pay back those bonds. Dont you think this govt is putting all mess they are creating on next govt by laucnching 5 years bond?
     
  4. Shahzaz ud din

    Shahzaz ud din SENIOR MEMBER

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    Patwaree spotted:coffee:
     
  5. Last starfighter

    Last starfighter FULL MEMBER

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    Use burnoll for your real deep passage lol
     
  6. seven0seven

    seven0seven ELITE MEMBER

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    Another patwari spotted
     
  7. cloud4000

    cloud4000 SENIOR MEMBER

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    Did you read the article in full? It’s about Pakistan’s one-year bond, so the current government will still be around. Plus, it’s an attractive investment.


    In fact the bond is yielding over 13%

    http://www.worldgovernmentbonds.com/country/pakistan/

    Given the zero, and even negative, interest environment in the West, this is a high return, low risk investment. Doubtful the government will default.
     
  8. Pakistan Space Agency

    Pakistan Space Agency FULL MEMBER

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    Pakistsn will be paying 13.25% interest on these bonds. Highest rate in Asia or anywhere in the world probably.

    How can Pakistan sustain such huge loses?
     
  9. Pakhtoon yum

    Pakhtoon yum SENIOR MEMBER

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    By spanking your daddy Nawaz. Why dont you do Pakistan a big favor and GTFO of Pakistan. Your kind is unwanted.
     
  10. Pyara9

    Pyara9 FULL MEMBER

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    DID YOU MISS THE PART WHERE KSA WENT UP 13%??

    If it keeps going at that rate we can pay all our loans n then some.