Pakistan Beats India, BRICs in Market Returns

[Geromix]

While the figures regarding returns of KSE are extra-ordinary,one really shouldn't think that they indicate economic development.

As many Indians and Pakistanis themselves have mentioned economic growth rates are not enough nor are booming stock exchanges enough.They are are only aspects of economic development and not development itself.
Equitable development is far more important.

Therefore,there is nothing to really gloat or boast about.

What percentage of Pakistanis have invested in stock markets in Pakistan?
(Don't worry the answer is very low in India as well)

Foreign investors are the ones benefiting from this the most?

What are the FDI figures for Pakistani economy during this period?
(FDI figures are far better indicator of a well performing economy than FII figures because of the nature of FDI and it being more stable,long-term and increasing employment in an economy)


A rise in stock market in a developed country bodes really well because more people have invested there in stock markets and therefore benefit from it.
The point of increased investor wealth is more and better applicable in a developed country than a developing one.(Applicable to both India and Pakistan and other developing countries)

But in a developing country the stock market is taken to be more of an indicator of good economic growth and are used by companies to get more finances through various equity issues.

In India,if you were to bring the point of a booming stock market as some major achievement in increased development to the 'more sophisticated' ,you would most likely be ridiculed.

Therefore,frankly speaking,I at least don't find it something to really boast about.

Also with specific mention to the stock market it self, market capitalization,number of companies listed and also the volume of shares traded is very important . In all cases, there can't be much of a comparison between the India and Pakistan

As somebody has put it well,it would be like comparing apples and oranges.

Also,I find it very amusing,all these posts of 'India is better than Pakistan' or 'Pakistan beats India at some etc etc.' ......
Such posts are really silly and foolish.

What is the point?

Don't you think we are all in the same boat?

 

[RiazHaq]

The KSE-100 did not rise in vacuum. It was supported by dramatic economic growth in Pakistan from 1999-2008. According to the IMF data, Pakistan's GDP jumped from $60 billion in 2000-01 to $170 billion in 2007-08 with per capita income rising from under $500 to over $1000. The IMF also acknowledges that "Pakistan attracted over $5 billion in foreign direct investment in the 2006-07 fiscal year, ten times the figure of 2000-01. The government's debt fell from 68% of GDP in 2003-04 to less than 55% in 2006-07, and its foreign-exchange reserves reached $16.4 billion as recently as in October (2008)."


The rise of the KSE-100 has not directly helped the poor folks, who have little or no savings to invest, but the economic growth and profit growth that drove the KSE-100 has also created millions of jobs that helped reduce poverty to under 20% in 2007-2008(vs over 40% in India), and reduced hunger and malnutrition relative to Pakistan's neighbors. In fact, the rich-poor disparity in Pakistan is the lowest in South Asia, partly because the tide of economic growth has helped lift all boats.

 

[deathfromabove]

'Superficially, Pakistan does not look that attractive for investment, but when you study the country, you see the possibilities,' says American investment bank Goldman Sachs, which regards Pakistan (as well as Iran, Egypt, Vietnam and others as a member of the 'Next 11', a group of emerging markets which have the potential to become the world's largest economies, alongside the BRIC countries).

Daily Times - Leading News Resource of Pakistan

http://www.js.com/pakistan-financial-news-latest_59.asp

 

[SMC]

As far as Fareed Zakaria is concerned, consider reading this.

http://www.defence.pk/forums/strate...61-pm-singh-interview-fareed-zakaria-cnn.html

In particular, my replies at the end of the first page and first reply on second page.

 

[Hulk]

Pakistan has lot of potential, if they develop similar passion for economy as they have for military they can do wonders.

 

[oceanx]

Many Indians are pround that they have so many billionaires. They have a strange logic. They celebrate inequality, caste-based oppression, and overpopulation.

Almost hilarious from someone proudly bearing both flags of a place (country?) with the highest density of Bentleys while denying the "rights of abode" of illegitimate children born of philandering HK fathers and mainland mothers ...

Perhaps HK has put that episode behind ...

But you need not be unfair. India seems to be doing something about caste, and have been for a while now, and more importantly, about caste-based discrimination.

And what's HK doing about its residency permits even as the PRC gingerly does something about Hukou?

 

[Ruag]

Best performing stock markets of 2009 -

TABLE-Asia stock markets' 2009 performance; Sri Lanka tops | Reuters

BSE Sensex gained 81.2% in 2009.

Karachi 100 gained 61.7% in 2009.

And according to NYTimes and Bloomberg, among top 20 largest stock markets in terms of market capitalization, Indian stock markets were the third best performing -

Off the Charts - For Stocks in the Developed World, It Was a Decade of Zeros - NYTimes.com

It is absolutely retarded to compare BSE with KSE given the difference in the market capitalization of the two.

Mumbai alone is home to two major stock markets - BSE and NSE. In terms of market value, BSE is the 4th largest in Asia while NSE is the 6th largest. On the other hand, KSE doesn't even come close.
http://www.world-exchanges.org/statistics/ytd-monthly

And therefore, Indian stock markets have every reason to be in the limelight.

 

[Stumper]

Best performing stock markets of 2009 -

TABLE-Asia stock markets' 2009 performance; Sri Lanka tops | Reuters

BSE Sensex gained 81.2% in 2009.

Karachi 100 gained 61.7% in 2009.

And according to NYTimes and Bloomberg, among top 20 largest stock markets in terms of market capitalization, Indian stock markets were the third best performing -

Off the Charts - For Stocks in the Developed World, It Was a Decade of Zeros - NYTimes.com

It is absolutely retarded to compare BSE with KSE given the difference in the market capitalization of the two.

Mumbai alone is home to two major stock markets - BSE and NSE. In terms of market value, BSE is the 4th largest in Asia while NSE is the 6th largest. On the other hand, KSE doesn't even come close.
WFE - YTD Monthly

And therefore, Indian stock markets have every reason to be in the limelight.

Ruag : Thanks. While reading the whole thread posts, i was damn confused. I mean i kept thinking, since when did absolute returns of a Index become a measure of one's economy. Imagine this for our country with its share of poverty and having one of the largest exchanges!

Although Mr.RiazHaq does mention a few valid points but to compare KSE with BSE would be unfair.

 

[FreekiN]

Could someone put this in simple language? lol

i know it sounds stupid but I HAVE to know what Pakistan beat them in lol

 

[Stumper]

Could someone put this in simple language? lol

i know it sounds stupid but I HAVE to know what Pakistan beat them in lol

Lolz, i will try .... mr.haq is discussing the growth of the KSE (its equivalent of SENSEX of BSE .. ie; a index - a weightedaverage of group of stocks) . While technically he is right that KSE beat the BRIC countries in terms of returns (ie; had you invested in KSE index futures the returns would be higher that those invested in NIFTY/BSE index futures), but what he misses is that growth of a index can not be alone linked to strength of a economy. Also we are contending that growth of KSE is inherently high because its small (small capaitalization <EDIT> : I assume your are not well versed with market terminology. Think of how far can you throw a 10gm stone. Very fast isnt it? .. Now try throwing a 10KG stone.. wont go as far, isnt it? ...hope i made sense)

Its a retarded base to start with. But the subject is technically correct.

 

[RiazHaq]

KSE stocks have significantly outperformed Mumbai over a 10 years period.

Pakistan's key share index KSE-100 was just over 1000 points at the end of 1999, and it closed at over 9727.40 on Dec 31, 2009. Pakistan rupee remained quite stable at 60 rupees to a US dollar until 2008, slipping only recently to about 80 rupees to a dollar. In spite of the currency decline, Pakistan's KSE-100 stock index surged 55% in 2009 in US dollar terms and 65% in rupee terms. During the same period of 1999-2009, Mumbai Sensex index moved from just over 5000 points to close at 17,464.81. If you had invested $100 in KSE-100 stocks on Dec. 31, 1999, you'd have over $900 today, while $100 invested in the Mumbai's Sensex stocks would be worth $274. Investment of $100 in emerging-market stocks in general on Dec. 31, 1999, would get you about $262 today, while $100 invested in the S&P500 would be worth $91.

Pakistan's KSE-100 stock index surged 55% in 2009 in US dollar terms and 65% in rupee terms, in a year that also saw the South Asian nation wracked by increased violence and its state institutions described by various media talking heads as being on the verge of collapse. Even more surprising is the whopping 825% increase in KSE-100 from 1999 to 2009, which makes it a significantly better performer than the BRIC nations. BRIC darling China has actually underperformed its peers, rising only 150 percent compared with energy-rich Brazil (520 percent) and Russia (326 percent) or well-regulated India (274 percent), which some investors see as a safer and more diverse bet compared with the Chinese equity market, which is dominated by bank stocks. This is the kind of performance that has got the attention of some of the top investors and investment firms around the world.

Haq's Musings: Karachi Tops Mumbai in Stock Performance

 

[Asian.Century]

Khush kita haa payeeee!!!!

 

[Veritas]

Can someone explain to me this, since Karachi Stock Exchange index trades are based on Pakistani rupee, how would devaluation of Pakistani rupee vs USD effect the return on investment. The OP has used $100 investment and $900 return, so what if a PKR100 were invested the return would be PKRXXX? you see the discrepancy.

I do not know how much is USD in 1999 but in 2005 it was 55PKR, now it is 86PKR that is significant devaluation. USD in 1999 is about 45INR and that is the case still now, 44INR.

 

[Veritas]

Here is BSE Sensex chart the author has selectively picked his dates, remember over a decade 1999-2009 a sample data that benefits his argument if he picked lets say 2000-2010, he would have lost his argument

http://finance.yahoo.com/echarts?s=^BSESN#chart2:symbol=^bsesn;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

 

[RiazHaq]

As of July 14, 2011, Karachi stocks are up 2% and Indian stocks are down 9.2% for 2011, making Sensex among the worst performing indices in 2011, according to The Economist market review.

Markets | The Economist