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Pakistan: reality check for Sharif
When Pakistan’s newly-elected prime minister Nawaz Sharif arrives in Islamabad this week he may take heart from the country’s surging stock prices.
But a reality check will quickly make him realise the tough task ahead in turning around an increasingly vulnerable economy. A country without regular electricity supplies can’t put too much faith in something as fickle as a stock market rally. Continue reading »
Pakistan market soars on Sharif win
Source: KSE
With a 17 per cent rally this year in the Pakistan stock market driven largely by hopes of a Nawaz Sharif election win, it might have seemed that his apparent victory was in already in the price.
But investors clearly believe there is still a little more juice the engine. The benchmark KSE 100 index rose 1.6 per cent to a record high in Monday trading, as many business people celebrated the former prime minister’s expected return to power. Continue reading »
Pakistan: Sharif win hope lifts stocks
As far as investors on the Karachi stock exchange are concerned, the result of Pakistan’s parliamentary election on May 11 is already a done deal.
They’ve driven the market to record highs on the prospect that opposition leader Nawaz Sharif will be returned to power. On Tuesday the exchange’s KSE-100 broke through the 19,000-level for the first time and more record highs are expected before the election’s over. Continue reading »
Pakistan: finance minister’s seat empty amid fears over election-driven spending
Is Pakistan’s political transition in danger of succumbing to its economic woes? That’s a question increasingly making the rounds among the country’s businessmen as pro-democracy activists look towards the first-ever transfer of power from one civilian administration to another without at least some military involvement.
Almost two weeks have passed since prime minister Mir Hazar Khan Khoso took charge to oversee parliamentary elections due on May 11. While he has named a 14-member cabinet, Khoso still does not have a finance minister. Continue reading »
Pakistan: rate cuts yet to bear fruit
The decision by Pakistan’s central bank on Friday to cut its discount rate by 50 basis points to 9.5 per cent was a widely-anticipated move – a measure meant to give an impetus to new investments, and part of an easing cycle of 250 bp this year. The interest rate cuts are helped by falling inflation which is forecast to stay below 10 per cent for the financial year to June 2013, down from 12-14 per cent a year ago.
But long term watchers of Pakistan’s economic trends are eager to note that new investments have plummeted in the past four years since president Asif Ali Zardari led the country back to democracy. Continue reading »
Pakistan: politics, not investment, to keep the gas flowing
With elections looming in Pakistan by summer 2013, prime minister Raja Pervez Ashraf has ordered officials from the ministry of petroleum and natural resources to make certain that there are no shortages of gas this winter.
Ashraf’s order follows some of the shortages of electricity earlier this year which prompted angry street protests. Any repeat of demonstrations over gas shortages as winter temperatures get near freezing in parts of Pakistan – as happened last year (pictured) – would hardly help the prospects of Ashraf’s ruling Pakistan People’s Party (PPP) returning to rule the country for another five years. Continue reading »
Pakistan: inflation reality check
What’s a finance minister to do when his own cabinet colleagues disbelieve his figures?
Abdul Hafeez Shaikh, Pakistan’s finance minister, is finding out the hard way. The respected former World Bank economist has had his inflation data challenged by other ministers, with one of them saying the figures are “out of tune with reality”.
It’s not that his colleagues are interested in statistics. But they are very interested in the parliamentary elections due to be held by the middle of next year – and they’re scared the voters will be angry with the official data. Continue reading »
Pakistan’s woeful education
The plight of Malala Yousafzai, the Pakistani schoolgirl shot by the Taliban for publicly demanding the right of women to be educated, has shone a global spotlight on the failings in the country’s social development. Continue reading »
Pakistan mulls starting Indian fuel imports, as economic ties warm
Pakistan appears to have warmed up to the idea of allowing fuel imports from India, following this week’s visit to Delhi by Asim Hussain, the country’s petroleum minister.
The move adds to the growing push in both nuclear armed south Asian countries for closer economic ties. In October 2011, Pakistan announced its intention to grant the most favoured nation status to India, reversing years of resistance from Islamabad on this count, while in April this year, India decided to allow foreign direct investments from Pakistan. Continue reading »
Pakistan: rate cuts bring little joy outside a booming stock market
Pakistan’s businesses should be celebrating this month’s interest rate cut of 50 basis points, which brought down the rate down to a maximum of 10 per cent.
But many critics argue it will take more than rate cuts to pull Pakistan’s economy out of trouble. Continue reading »
Pakistan’s equities hit all time high – but does the economy justify further gains?
Pakistan’s equity investors are eagerly awaiting news from the country’s central bank when it reveals its policy on future interest rates on Friday.
On Thursday, the Karachi Stock Exchange’s main index, the KSE-100, reached an all-time high of 15,815 points, comfortably overtaking the previous peak reached in April 2008. In part, the enthusiasm was driven by falling interest rates. But would further cuts finally get the economy moving? Continue reading »
Xinjiang: struggle to revive Silk Road
By Raffaello Pantucci
What do you do about attracting investment if you are a remote corner of China, best-known internationally for your ethnic tensions?
If you are Xinjiang, you invest heavily in a blockbuster economic exhibition. Urumqi is this week hosting its second annual China-Eurasia Expo, opened this year by premier Wen Jiabao, a clear upgrade from last year’s star host, vice premier Li Keqiang.
Leaders and/or ministers from seven countries flew in, giving credence to Wen’s claim that the Expo aimed ‘to build a new bridge of friendship and cooperation across the Eurasian continent…and make Xinjiang a gateway.’ But it’s along way from prime ministerial declarations to the investment that Xinjiang badly needs. Continue reading »
Pakistan’s real power problem: a failed privatisation
Drone attacks, political tension, a hidden independence war… Pakistan is living through some dark hours.
And that is true in a literal sense as well. For more than a year, Pakistani cities have faced up to 20 hours a day without electricity. The blackouts are putting a drag on economic growth, stalling everyday life for many Pakistanis and sparking mass protests across the country.
One reason is a near total inability to get the population to pay energy bills. But Kamal Munir of the Judge Business School at the University of Cambridge points to another culprit: privatisation. Continue reading »
[video] Mobius: volatility is the worry
Mark Mobius, executive chairman at Templeton Emerging Markets, tells the FT’s Henny Sender that volatility is the biggest worry, not just for emerging markets but for all markets around the world. Meanwhile, frontier markets such as Pakistan are worth considering for investment, especially when the news is at its worst.
India-Pakistan: opening economic ties
By Neil Munshi and Girija Shivakumar
India and Pakistan seem to be coming closer together economically, taking ginger but significant steps toward each other.
On Friday, Anand Sharma, India’s commerce secretary, and his Pakistani counterpart, Makhdoom Amin Fahim, took things further, with Sharma announcing that India would soon open up to foreign direct investment from its fellow-nuclear-armed rival to the west. India also said it would lift visa restrictions for Pakistani businesspeople. Continue reading »
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