Stephen Cohen
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India's Market Is Leaving Pakistani And Chinese Markets In The Dust
https://www.forbes.com/sites/panosm...ese-markets-in-the-dust-in-2017/#7b9abe866fb8
India’s equity markets have been on fire so far this year, outperforming the neighboring Chinese and Pakistani markets by a big margin. IShares S&P India 50 has gained 18.32 percent in 2017, compared to a 10.23 percent gain in iShares China Large Cap, and a 1.94 percent loss in Global X MSCI Pakistan.
That’s a big change in fortunes from six months ago, especially when the comparison is narrowed down to India and Pakistan.
Last September, the Global X MSCI Pakistan ETF was up 20%, beating India and China’s comparable ETF’s by almost two to one -- though Pakistan continues to beat both Chinese and Indian equities over longer periods of time.
What’s behind the changes in fortunes between India and Pakistan’s markets?
To begin with, Pakistan’s recent numbers may be just a normal pullback of a long bull market. Then, there’s domestic and international terrorism, which is beginning to catch up with the real economy. Then too, there is a growing Chinese presence that threatens to leave the country heavily indebted—like Sri Lanka—and pit Islamabad against Washington.
Wait, there’s more. There’s the “big picture,” the key macroeconomic metrics. Like GDP growth rates and unemployment, where Pakistan lags behind both India and China—see table. And more -- deterioration in inflation, current account deficit, and external debt -- to scare foreign investors away.
Meanwhile, India seems to have got a lot of things right. Prime Minister Narendra Modi has consolidated regional power, leaving behind the fallout from the exchange of the old 500 and 1000 rupee notes for new paper currency.
A few words of caution: Frontier and emerging markets are highly volatile, with one year’s big winners turning into next year’s big losers. The performance of the Indian and Pakistani markets in the last six months attest to it. Hype should never be a substitute for due diligence.
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@RiazHaq I am sure you would be interested in this news
https://www.forbes.com/sites/panosm...ese-markets-in-the-dust-in-2017/#7b9abe866fb8
India’s equity markets have been on fire so far this year, outperforming the neighboring Chinese and Pakistani markets by a big margin. IShares S&P India 50 has gained 18.32 percent in 2017, compared to a 10.23 percent gain in iShares China Large Cap, and a 1.94 percent loss in Global X MSCI Pakistan.
That’s a big change in fortunes from six months ago, especially when the comparison is narrowed down to India and Pakistan.
Last September, the Global X MSCI Pakistan ETF was up 20%, beating India and China’s comparable ETF’s by almost two to one -- though Pakistan continues to beat both Chinese and Indian equities over longer periods of time.
What’s behind the changes in fortunes between India and Pakistan’s markets?
To begin with, Pakistan’s recent numbers may be just a normal pullback of a long bull market. Then, there’s domestic and international terrorism, which is beginning to catch up with the real economy. Then too, there is a growing Chinese presence that threatens to leave the country heavily indebted—like Sri Lanka—and pit Islamabad against Washington.
Wait, there’s more. There’s the “big picture,” the key macroeconomic metrics. Like GDP growth rates and unemployment, where Pakistan lags behind both India and China—see table. And more -- deterioration in inflation, current account deficit, and external debt -- to scare foreign investors away.
Meanwhile, India seems to have got a lot of things right. Prime Minister Narendra Modi has consolidated regional power, leaving behind the fallout from the exchange of the old 500 and 1000 rupee notes for new paper currency.
A few words of caution: Frontier and emerging markets are highly volatile, with one year’s big winners turning into next year’s big losers. The performance of the Indian and Pakistani markets in the last six months attest to it. Hype should never be a substitute for due diligence.
--------------------------------------------------------------------------------------------------
@RiazHaq I am sure you would be interested in this news
