Soaring Profits Push Pakistan's KSE-100 to 4-Year High

[jayron]

OMG so much profit! what are they gonna do with all the riches?

 

[Jade]

Do you want to see a nice "X"?

Take a look at the Trend-lines in this IMF graph for the GDP growth-rates of Bangladesh versus our country.

As you can see, our country's trend is clearly downward. The trend-line is downward from left to right. The trend for Bangladesh, on the other hand, is clearly upward. The trend-line is upward from left to right.

Can you see the nice "X" pattern formed by the two trend-lines?

As shown, the IMF is predicting/projecting average 6.75% growth for Bangladesh over the next 5 years (2012-2017). The projecting/prediction for our country is only 3.5% growth rate over the same period (2012-2017).

Why do you think that is? Could it be that the IMF is making these predictions based on a careful analysis of underlying fundamentals of the two economies? For example, if we look at the IMF Bangladesh v/s Pakistan graphs for Investments & Savings, we see even more of the same “X” pattern:

What do you think? What do these graphs have to say about our economy's prospects versus the prospects of Bangladesh's economy?

Investments indicate the current state of economy and savings indicate the future state of the economy

All it says is Pakistan economy is on downward hill and even the future looks bleak.

I agree! KSE has performed significantly better for years.

Why do you keep on repeating the same line again and again? If KSE is so good, why are investors not flocking to invest.

 

[RiazHaq]

Why do you keep on repeating the same line again and again? If KSE is so good, why are investors not flocking to invest.

The fact that KSE-100 is going up by double digits is confirmation of investors flocking to it... in fact, it's the best performing market in Asia so far this year. How else does a share index go up?

 

[Pak47]

Thread title doesn't even mention india.. Yet, everyone begins derailing.

This isn't a comparison thread.

 

[MandarK]

The fact that KSE-100 is going up by double digits is confirmation of investors flocking to it... in fact, it's the best performing market in Asia so far this year. How else does a share index go up?

You are correct in your assessment that KSE is doing extremely well but there is a reason why investors are not lining up to put funds in KSE. Reason being its total capital which is extremely low for any major investor to invest in KSE.

BTW IS KSE performing better than Chinese stock exchanges?

Thread title doesn't even mention india.. Yet, everyone begins derailing.

This isn't a comparison thread.

The first post itself compares BSE with KSE. Look at the graph.

 

[z9-ec]

Do you want to see a nice "X"?

Take a look at the Trend-lines in this IMF graph for the GDP growth-rates of Bangladesh versus our country.

As you can see, our country's trend is clearly downward. The trend-line is downward from left to right. The trend for Bangladesh, on the other hand, is clearly upward. The trend-line is upward from left to right.

Can you see the nice "X" pattern formed by the two trend-lines?

As shown, the IMF is predicting/projecting average 6.75% growth for Bangladesh over the next 5 years (2012-2017). The projecting/prediction for our country is only 3.5% growth rate over the same period (2012-2017).

Despite slow growth if you look at numbers Pakistan maintains it's position with GDP almost twice the size of Bangladesh going into 2017. Slow growth simply attributes to sheer incompetence of the incumbent government. There's no doomsday scenario for Pakistan as being portrayed here.

Why do you think that is? Could it be that the IMF is making these predictions based on a careful analysis of underlying fundamentals of the two economies? For example, if we look at the IMF Bangladesh v/s Pakistan graphs for Investments & Savings, we see even more of the same “X” pattern:

While investment is pivotal for any nation to prosper, Pakistan has managed to overcome it's shortcomings with remittances which has seen record growth over the years and domestic consumption. Nevertheless, I have confidence we will see it rise post elections.

What do you think? What do these graphs have to say about our economy's prospects versus the prospects of Bangladesh's economy?

In economics, there are conflicting views with regards to Savings. There is a theory named paradox of thrift which argues against savings. The paradox clearly states that if everyone tries to save more money during times of recession, then aggregate demand will fall and will in turn lower total savings in the population because of the decrease in consumption and economic growth. The paradox is, narrowly speaking, that total savings may fall even when individual savings attempt to rise, and, broadly speaking, that increase in savings may be harmful to an economy.


A simple example can illustrate this paradox. Let’s assume I want a new computer, so I start saving an extra $100 each month that I would otherwise spend going out to eat. By choosing not to spend that $100, I deny the wait staff at my favorite restaurants some work hours and tips (i.e., some portion of their income). As a result, these workers also have to reduce their
consumption because they are earning less. If society (as opposed to an individual as in our example) follows this saving pattern, this snowball (or Keynesian multiplier) effect could ultimately lead to decreased consumer spending and lower income for everyone. Consequently, Keynes argued, output would decrease and, therefore, limit economic growth/recovery until,
of course, I bought my new computer with the money that I’ve saved.



Low GNS % of GDP (savings) is not really a bad thing.

Here's a list to give you an idea:

Turkey 13.819 % (lower than Pakistan)

United Kingdom 12.354 %

Brazil 16.975 %

Russia 24.694 %


With China having the second biggest:

China 53.983 %

complete list:
Gross National Savings (% of GDP) Data for All Countries

 

[karan.1970]

As Einstein said, Human stupidity is infinite

Comparing a $ 35 billion Market Cap Strock exchange (Karachi) with another one with Market cap of over $ 530 billion (Mumbai) kind of proves him right ....

 

[z9-ec]

As Einstein said, Human stupidity is infinite

Indeed.

Comparing a $ 35 billion Market Cap Strock exchange (Karachi) with another one with Market cap of over $ 530 billion (Mumbai) kind of proves him right ....

Mr. Genius market cap. is not the issue here rather it is the rate of return. For any investor this is the biggest if not THE motivational factor.

 

[Karachiite]

LOL at bhartis getting their panties wet.

 

[tarrar]

Anything good happens to Pakistan hindis are there to laugh & make fun of Pakistan anything bad happens to Pakistan hindis are there to laugh & make fun of Pakistan, don't you hindi jabrnois have anything better to do other than pointing figures at Pakistan & cry.

Oh wait I get it this is the only thing you are really good at name calling, making fun & cry.

 

[Nishan_101]

A string of strong earnings announcements by Karachi Stock Exchange listed companies and the Central Bank's 1.5% rate cut have helped the KSE-100 index gain 32% year to date. In the week ended on August 16, the benchmark index surged by 238.59 points, or 1.61 percent, to 51-month high of 15,000.08 points. This was the highest close since April 30, 2008.

Strong Earnings:

Last week, KSE-listed Indus Motors announced 57% jump in profits on record sales of Toyota Corolla cars. It was followed by Lucky Cement Ltd. (LUCK), Pakistan’s largest producer of the building material, announcing 71 percent surge in profits to a record as an increase in domestic sales offset a decline in exports. Pakistan Petroleum Limited (PPL), the country’s second largest oil and gas explorer, said its profits soared 30% to Rs40.9 billion in fiscal 2012. Strong earnings have also been reported by Unilever Foods and Bata shoes in the last few days.

Best Performing Market:

So far in 2012 Pakistan is the best performing market in Asia surpassing the Philippines which was the top performer until June of this year. Karachi stocks have also significantly outperformed all emerging stock smarket indexes, including Mumbai and Shanghai, in 2012.

Rising Consumer Demand:

Meteoric rise of Engro Foods symbolizes strong consumer demand in growing package food sector. Its CEO Muhammad Afnan Ahsan has forecast 81% increase in net income in the current year ending December 31, 2012. With a compound annual growth rate (CAGR) of 65 percent and a planned infrastructure investment in 2012 of eight billion rupees, Engro Foods has become the country's fastest growing local company catering to a wide range of consumers in Pakistan and overseas.

Undeterred by the gloom and doom reports in the media, Pakistani consumers are continuing to spend and private consumption has now reached 75 percent of GDP. It rose 11.6% in real terms in 2011-12 compared with just 3.7% growth a year earlier , according to Economic Survey of Pakistan. In fact, many analysts believe that Pakistan's official GDP of $220 billion is understated by as much as 50%, buttressing a recent claim by the head of Karachi Stock Exchange that Pakistan's real GDP is closer to $300 billion.

I believe that even a modest effort to increase tax collection can significantly improve Pakistan's state finances to support higher public sector investments in energy, education, health care and infrastructure.

Haq's Musings: Strong Earnings Propel Pak Shares Index to Reach 4 Years High

Its just because of the fact the corrupt people from the present GoP has taken money out from Pakistan to Dubai and then get it back in the name of "Remittances" which they used to claim a Record. After that they have invested all this money in the KSE and push it to level which is around 300% or even much more than the actual one. Some experts says that the actual index of KSE is around 7000-8000. So you can understand what will going to happen when the tenure of this GoP will end.

 

[INDIC]

As Einstein said, Human stupidity is infinite

Comparing a $ 35 billion Market Cap Strock exchange (Karachi) with another one with Market cap of over $ 530 billion (Mumbai) kind of proves him right ....

530/35= 15 times.

 

[RiazHaq]

530/35= 15 times.

Investors chase returns, not market caps.

By your misguided logic, investors should only buy based on large market cap and not returns....a crazy proposition that would doom all investors and kill small and medium cap companies, including many high-tech Si Valley companies, that have been the driving force behind America's economy for decades.

 

[Abdal Ali]

All it says that Pak savings rate fluctuates with GDP growth rates.

And Bangladesh's does not?

Why the difference?

 

[karan.1970]

Indeed.



Mr. Genius market cap. is not the issue here rather it is the rate of return. For any investor this is the biggest if not THE motivational factor.

Case in point that you have no clue about what you are talking

Investors chase returns, not market caps.

By your misguided logic, investors should only buy based on large market cap and not returns....a crazy proposition that would doom all investors and kill small and medium cap companies, including many high-tech Si Valley companies, that have been the driving force behind America's economy for decades.

He is talking of the market cap of the Stock exchange and not companies.. Also unlike what some magazines would have you believe, size matters

Anyway, for your reading pleasure

KSE index surge: is it different this time? | DAWN.COM

But the trouble with the bulls is that when they begin to charge, they do so with a fixed gaze on the positives. The current rally is neither driven by politics nor economy.


If the stock market in modern times is still regarded to be the barometer of the economy, the one that hangs over the KSE looks like in need of repairs.

All that raises the spectre of a doddering market at the edge of the cliff. It brings back the dreadful memory of stock crash of 2008, which had resulted in a fearful plunge in equity values by 55 per cent in fewer than four months from its historic high of 15,760 points touched on April 20, 2008.

Some market pundits, looking back at the current neck breaking speed of the stock index, have called for caution. The bulk of activity in the last few months in ‘penny’ stocks, suggests that the small investors badly bruised by the bear rampage of 2008, may again be biting more than they can chew