Frontier Markets: Pakistan Due For An Upgrade?

[Areesh]

According to an article on wsj.com, MSCI has decided to consider Pakistan for a possible upgrade to Emerging Market status in 2016. For those who don't remember, Pakistan was an Emerging Market until the financial meltdown and their reaction to it where they essentially shut the stock market down to prevent investors liquidating their positions.

But, in my opinion it is time for index providers to look at the country again. Since 2013 Prime Minister Nawaz Sharif has done a stellar job of attempting to right the ship, but in all fairness he has his work cut out for him. He faces tremendous hurdles from a low tax collection rate of around 10% to regaining control over parts of the country that have become havens for terrorism.

But I really hope he succeeds.

One of first places he needs to address is the economy and even though investor protections have been put in place, foreign investors are still leery. I think that Coca Cola (
KO
) having opened a new bottling plant in that country, and the recent M&A in the banking sector will help.
Additionally, the Chinese investing over $40 billion in infrastructure projects will hopefully change the economic climate in that country. Of course even if they do not receive the upgrade they deserve, the country will be again front and center in the minds of investors, which can only bode well for the future.

In the meantime, the benchmark index the KSE100 is up 22.73% for 1 year, but the stocks I would watch are Exide and Habib Bank.

Frontier Markets: Pakistan Due For An Upgrade? - NASDAQ.com

 

[Kompromat]

CPEC effect. If we can pull off 10 years of 5% minimum GDP growth, we would have restructured our economy for good.

 

[SBD-3]

CPEC effect. If we can pull off 10 years of 5% minimum GDP growth, we would have restructured our economy for good.

Its not CPEC effect because CPEC's economic impact is yet to materialize, the major drivers behind positives is the economic recovery and strengthened external position.

 

[Sunan]

Credit goes to PM nawaz and his Government.Lots of Good news now a days related to Economy and Progress of Pakistan.Keep it up PM Sahab.

 

[salmanACCA]

we need to increase our tax base