How Business Tycoons unstablize nations?

[fareedsidra]

Country’s chaotic financial heart – Karachi – is home to 18 million people, Taliban bombers, contract killers and one of the world’s most successful stock markets.
Reported at CNN and local newspapers, With 49 percent returns in 2012, the Karachi Stock Exchange (KSE) was one of the five best performing markets in the world. Now it is seeking a foreign partner to buy a stake and take over management of a market that has risen three-fold over the past four years.
At least some of that performance came on the back of a government amnesty that allowed people holding undeclared assets or “black money” to invest it freely in the market. And the relatively illiquid market has also been vulnerable to manipulation.
Nicknamed “Big Dhedhi” for his ability to move markets, Aqeel Karim Dhedhi heads one of Pakistan’s largest domestic conglomerates, the AKD Group (AKDC.KA).
Lately, the well-known philanthropist and leading member of Pakistan’s business establishment has been trying to fend off arrest over allegations of insider trading.
An SECP investigator accused traders, including Dhedhi’s brokerage, of buying shares in a state-run Sui Southern Gas Co (SUIS.KA) before an official announcement allowing the company to raise its prices. In the weeks before Sui Southern’s announcement, the stock price jumped from 13.5 rupees to 20 rupees, its biggest hike in five years.
Dhedhi remains under investigation. But even if regulators were to find him guilty of insider trading, past practice shows he would likely get a slap on the wrist. The SECP’s fines are almost always a fraction above the amount of money made in the stock manipulation, and sometimes even less.

 

[SBD-3]

Country’s chaotic financial heart – Karachi – is home to 18 million people, Taliban bombers, contract killers and one of the world’s most successful stock markets.
Reported at CNN and local newspapers, With 49 percent returns in 2012, the Karachi Stock Exchange (KSE) was one of the five best performing markets in the world. Now it is seeking a foreign partner to buy a stake and take over management of a market that has risen three-fold over the past four years.
At least some of that performance came on the back of a government amnesty that allowed people holding undeclared assets or “black money” to invest it freely in the market. And the relatively illiquid market has also been vulnerable to manipulation.
Nicknamed “Big Dhedhi” for his ability to move markets, Aqeel Karim Dhedhi heads one of Pakistan’s largest domestic conglomerates, the AKD Group (AKDC.KA).
Lately, the well-known philanthropist and leading member of Pakistan’s business establishment has been trying to fend off arrest over allegations of insider trading.
An SECP investigator accused traders, including Dhedhi’s brokerage, of buying shares in a state-run Sui Southern Gas Co (SUIS.KA) before an official announcement allowing the company to raise its prices. In the weeks before Sui Southern’s announcement, the stock price jumped from 13.5 rupees to 20 rupees, its biggest hike in five years.
Dhedhi remains under investigation. But even if regulators were to find him guilty of insider trading, past practice shows he would likely get a slap on the wrist. The SECP’s fines are almost always a fraction above the amount of money made in the stock manipulation, and sometimes even less.

Thoratically the capital market is driven by the dynamics of real economy. This is so because the corporate identities being traded in capital markets derive their earnings from the real economy. So if the stock market outperforms the real economy, it can be either
1- The inflation pass through increase (i.e. the corporates pass on the inflation to end consumers through price and thus don't take a hit on profits).
2- Heavy speculation.
Pakistan stock market has been booming even when the economic growth lingered at around 2%. even if the perfect inflation passthrough existed (which in really doesn't since a survey of SBP shows that around 55% of the firms pass the inflation quickly to end consumers) the stock returns should be in the vicinity of 17-18%. However, the stock market have been returning as high as 50% returns which should be a fair hint that hefty speculation is taking place in stock market. As far as who is funding the boom is concerned, its the laundered money which is coming in Stock market. The Prize Bond and Real Estate markets in Pakistan are a serving as money laundries while the stock market is digesting the money laundered through prize bond and real estate markets.

 

[Rizwan231]

Thanks

 

[black-hawk_101]

Soon Karachi and its bid industries and businesses like KSE will very soon be going in the western hands who will invest more in it to make it more stable.

 

[Rizwan231]

realy