I am software engineer, so I understand software, but I understand absolutely nothing about numbers -- well the sort of numbers being discussed here
I am not trying to be negative but I am confused, how does that a simple integration of software increase our economy by 500 Billion (or any amount near that).
From what you are saying it appears that after the integration, Pakistan will be able to "manage" all that money not own it. And will earn a small portion for each transaction.
Like for example, software companies like Alibaba, Amazon usually has billions of worth of money, but they do not earn it all, they only manage it and direct the actual amount to the correct seller and take a small portion of the transaction as a profit. But they are worth trillions of dollars on "paper". But not in reality.
I have very little understanding of this, so pardon me if I am completely wrong about it, but this is how it appears.
I appreciate the honesty unlike many others who try to sound expert on this complex topic, without having ANY real life experience. So in easy terms, Pakistan's market is an internal market. In other words, let's say, you write a software and sell it in Lahore for $ 50.00 per user license. Your audience is based in Lahore and that's all you've been doing.
Then Apple hears about your product and they evaluate it and measure your growth in Lahore. They find out that you have a great product and if they were to integrate it with IPhone and host it in their ICloud, they can get 5 more million IPhones sold and charge all existing customers (over billion of them), $ 10 dollars every year to use that app. So let's assume the money (perceived, based on initial evaluations) they will make, because of your app, which they won't make otherwise, is estimated $ 10* $1 billion a year in user licences (meaning extra **potential** $ 10 billion in revenue). What do you think they'll do? They'll pay you one time a $ 500 or a $ 1 billion and will give you nice royalties, say 2% of all the sales and will keep the rest of many billion dollars.
How did this additional money came into existence for Apple and you both? Because of your App and Apple's ability to integrate it within their Cloud and IPhone platforms and sell it to their users.
Similarly, when the PSX will be integrated with NYSE and others, brokers from all across the globe (the ones integrated with the system) will buy and sell Pakistan's securities. That could mean a LOT of extra trading volume that Pakistan couldn't get on her own, like your App's example when you were selling it. The second you went with Apple, you grew and Apple grew. Similarly, by offering Pakistani securities to different clients across the globe as "one of the fastest growing and highest ROI securities", the clients will buy Pakistani securities through Lehman, Morgan Stanley, Fidelity, etc, resulting in paying them fees for trading and generating hundreds of millions every years for them, and creating billions of trading volume for Pakistani securities. I hope this explains what this integration brings to the table.
Unless
@Viper0011. is sharing confidential information with us (Which in my opinion is very stupid to do), there is nothing available on the web backing what he is claiming.
What I have found is that Pakistan is currently in talks with MS, and has been for a while, to add Pakistan's securities to the fund below:
https://www.msci.com/resources/factsheets/index_fact_sheet/msci-emerging-markets-index-usd-net.pdf
It's a two page document essentially describing the make up of the fund.
1) There is nothing confidential in this topic. Not sure how a market integration can be kept a "secret" when over 100 or so people are involved in it across the globe in different countries. Its not out in the media, doesn't mean its confidential. You should give it time.
May be they want to see some success first, before announcing it? Knowing that there is a fraction of the Pakistani political population who bitc*hes about everything the government of Pakistan does, no matter how good it is for the Pakistani people?
2) Pakistan ALREADY has Indexes with MSI. The symbol is called "PAK", and you can google it. There are other various indices and ETF's (very pricey too) from Pakistan, that are offered by MSI, FTSE, DAX, etc. So what you are posting is old school news about that. Like I said, plenty of Pakistani funds already exist and have been doing very well in the market. MSI also provides some Pakistani funds as I explained above.
3) Try to read through the topic before posting silly comments to be frank. If you've not read the entire topic before, its not the author's fault that you don't have a clue about what you are putting in your posts, and its off reality.
Here, I am posting content from post number 5 of this forum. READ the first paragraph to understand the SCOPE of the study. It is not about MSI, its integrating the PSX (formerly KSE with all major global markets, aka, DIRECT integration like NYSE has with others). Here is parts of post # 5:
Post # 5:
Objective of the study
The focal objective of this study was to explore dynamic linkages between US, European,
Asian and Pakistan’s stock market which may be very useful for investors,financial
institutions and portfolio managers to utilize their capital across the border in an efficient
and smart manner.
(Linkages of Pakistani and Global Stock Markets Page 236)
---------------------------------------------------------------------------------------------------------------
Table 1: Descriptive Statistics
KSE NYSE BSE SSE FTSE DAX
Mean 0.410909 0.039088 0.325421 0.166558 -0.017812 0.035978
Median 0.727541 0.244188 0.705154 0.000000 0.156427 0.339018
Maximum 13.64966 12.89389 14.07764 14.96379 13.40915 16.11623
Minimum -18.20683 -19.53480 -15.95417 -13.84131 -21.04692 -21.60969
Std. Dev. 3.738035 2.761628 3.552023 3.625219 2.674297 3.547779
Skewness -0.721553 -0.660061 -0.419698 0.203003 -0.664536 -0.267582
Kurtosis 5.877906 9.792691 5.165853 4.809623 12.34745 7.030426
Jarque-Bera 236.2333 1091.342 122.9726 78.39371 2031.676 376.7631
Probability 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
Sum 224.7670 21.38096 178.0055 91.10697 -9.743155 19.67980
Sum Sq. Dev. 7629.205 4164.116 6888.812 7175.650 3904.917 6872.356
Observations 547 547 547 547 547 547
---------------------------------------------------------------------------------------------------------------
. You almost act like our Indian adult-children on here when it comes to Pakistan making any progress in anything. Good luck with so much negativity!!
AK) | Seeking Alpha
