Time to Sell India Short and Go Long on Pakistan?

[Greaves]

A better equation will be

Market Cap of Reliance Industries + TCS > Market Cap of KSE ...

The Pakistan stock exchange does not have the depth to absorb the liquidity created by dumping just these 2 markers by FIIs. Let alone the wet dream propagated in the OP

i think only tcs is worth more than kse cap let alone combining reliance

 

[locker]

A better equation will be

Market Cap of Reliance Industries + TCS > Market Cap of KSE ...

The Pakistan stock exchange does not have the depth to absorb the liquidity created by dumping just these 2 markers by FIIs. Let alone the wet dream propagated in the OP

Do you know market cap of TCS let alone Reliance?
TCS alone can handle KSE let alone comparing it with Reliance or even combining both of them to compare it with KSE.

 

[Viper0011.]

Asian shares fall; Hong Kong enters a bear market - MarketWatch

Why India is the best performer among top equity markets

ALL markets have dropped because of concerns on the Chinese economy and Greece. There is nothing unusual.

Why India is the best performer? Primarily, because Indian community doesn't do trading like the rest of us do for profit. Millions of Indians from the US and other richer countries stay invested in the Indian markets due to patriotism and to keep the Indian markets stable.

Unlike the rest of us who pull out. Plus, the Indian system is stable, its economy isn't based on manufacturing like the Chinese. The Indian economy is a labor services based economy, which will continue to go up as the world needs the tech and other labor services. So the key here is "patriot stake holders + stable system and labor services = better performance". But India's markets have matured so the profits will start to become more stable.

But, Pakistan has been and will remain in the highest return producing markets for the next two decades. Pakistani market will continue to outpace return expectations as the country is climbing the economic staircase fast and so are the investments and profits.

 

[Spectre]

Primarily, because Indian community doesn't do trading like the rest of us do for profit

Millions of Indians from the US and other richer countries stay invested in the Indian markets due to patriotism and to keep the Indian markets stable.

What? From where did you get this nugget of wisdom? DO have any well sourced poll data to justify your statements? Have you spoken to millions of retail investors to gather their motivations?

Please refrain from passing generalized wisdom when from your posts I can gather you have very hazy Idea of Indian markets.

Before you pass on judgmental personal attack please understand I am speaking from hard earned experience of Indian financial markets both primary and secondary.

 

[Viper0011.]

How China’s recent stock market pain is proving to be India’s gain | The Financial Express

India stock markets total cap-3.35 trillion dollar, stock exchange in pakistan -75 billion

3350/75= Almost 45 times larger

What's the point? Pakistan is a 4 times smaller country with 5 times less population and the market size? Pakistan also wasn't fortunate enough to get trillions in investments from the US and other countries, and send millions IT high cost labor to the US......so your "3.35 Trillion" market is largely due to the help the US and other have provided to you and helped you grew.

Pakistan is now getting investments, if you take a size of India (any part) equal to population, market size and everything, and compare it to Pakistan a few years from now (apple to apple, man to man, size to size), Pakistan will be WAY ahead. You can't China and compare Mexico's economy with it. You have to do 1:1 comparison.

What? From where did you get this nugget of wisdom? DO have any well sourced poll data to justify your statements? Have you spoken to millions of retail investors to gather their motivations?.

There is no generalized comments, I do have some Indian friend, I also have Indian employees. This is actually a good thing, when you guys work, you work for India. The goal is to take India forward, not individuals. Which is why you have progressed a lot.

 

[Spectre]

There is no generalized comments, I do have some Indian friend, I also have Indian employees. This is actually a good thing, when you guys work, you work for India. The goal is to take India forward, not individuals. Which is why you have progressed a lot.

Speaking to 10, 100 or even thousand people is not going to give you an accurate idea. Anecdotal evidences are useless for any analytical exercises.

P.S. I don't doubt your intentions in this case but just a friendly advice against making anecdotal experiences as a corner stone for your comments. I realize PDF doesn't necessitate high standards on posting but seeing how you strive to put forward quality posts may be my advice would help. That's all

I apologize for what I now see is arrogant nature of my earlier posts.

Regards

 

[RIP Pak LAW]

although Pakistan as per above data if is so good, then why international investors are running away?

They are not running away they are returning back. China is investing in billions, Russia is set to invest $ 2 billions in pak for gas pipeline, German car manufacturing company is also setting up plan etc etc. World is beyond India as well.

 

[Sliver]

econ 101: higher risk, higher return.. Pak has high return at a higher risk.

 

[RiazHaq]

Billionaire-Backed Hedge Fund to Short #India Stocks. Lowest long now in 12 months. Billionaire-Backed Hedge Fund to Short India Stocks on Rally - Bloomberg Business via @business

Infina Finance Ltd., a Mumbai-based $190 million hedge fund, has turned the most bearish in a year on India’s stock market and will short if it rallies further.
“Right now we have the lowest net longs than we had in the last 12 months,” Venkat Subramanian, Infina chief executive officer, said in an interview. “If the market goes up any further, I would become net short.”
The long-short equity fund, which counts billionaire Uday Kotak and Kotak Mahindra Bank Ltd. among investors, is expecting a correction as foreigners allocate money to other regions and stock valuations become expensive. Indian equities have rallied as Prime Minister Narendra Modi pledged to revive investments and manufacturing while curbing graft after being swept into office a year ago. The economy grew by 7.5 percent in the January-March period, faster than the previous quarter’s 6.6 percent rate.
“Current market sentiment is very bullish, but it is possible that earnings expectations won’t be met” as it will take at least another 15 months before the government’s actions can bolster company earnings, Subramanian said. “Companies in consumer goods, telecommunication services and auto-components could be the space where significant disappointments could happen.”
The fund, which has the capacity to use leverage though it’s not employing it, has returned about 16 percent every year since its inception in 2008, according to Subramanian.
Earnings Expectations
Earnings for companies in the benchmark S&P BSE Sensex Index are estimated to grow about 31 percent in fiscal 2016. That compares with about 13 percent for those in the MSCI Emerging Markets Index.
The Sensex’s valuation of 15.4 times projected 12-month earnings is about 30 percent higher than the MSCI Emerging Markets Index. The benchmark closed 0.9 percent higher at 28,020.87 points. It has added 1.9 percent this year.
“Things are improving on the domestic front as this government has started doing things which will start showing up in company earnings in 15 to 18 months,” Subramanian said. “But the market has already paid for all of it and that too with foreign money.”
Foreigners have invested $6.3 billion in Indian equities this year compared with $9.9 billion in the first six months of 2014. Overseas fund managers bought stocks and bonds worth an unprecedented $42 billion last year, data compiled by Bloomberg show.
Growth Plans
The fund, which is currently managed by a five-member team that includes three analysts and a dealer, is branching out into private equity and plans to invest in sectors such as food processing, information technology and engineering-related startups.
Infina is setting up a subsidiary in Dubai to invest in overseas markets, especially in U.S. equities. The unit, in which Infina will initially invest 2 billion rupees ($31 million), is awaiting approval from the country’s central bank.
“My own comfort is more with investing in the U.S. market than in other overseas markets,” Subramanian said. “We will look at themes which we can’t get in other parts of the world. For instance in technology and biotech, where the U.S. market has world-beating companies.”

 

[RiazHaq]

`

How China’s recent stock market pain is proving to be India’s gain | The Financial Express

India stock markets total cap-3.35 trillion dollar, stock exchange in pakistan -75 billion

3350/75= Almost 45 times larger

That's exactly the problem...India's market cap is more than twice its GDP which is unsustainable, while Pakistan's market cap is only a fraction of its GDP. It's one of Buffer's rules.

Market Cap to GDP: The Buffett Valuation Indicator Remains in Levitation Mode - dshort - Advisor Perspectives

 

[OrionHunter]

Sounds great

Right! Sounds like Pakistan is the next superpower. Sounds good. But empty vessels make the most sounds!! Like the OP who is well known for his silly rants!

 

[xyxmt]

Well I don't want to demean Pakistani friends here, but KSE is like a tiny stock shop in front of NSE and BSE. As of today, combined worth of BSE and NSE is 3.65 trillion USD and that of KSE is a mere 72 billion USD.

Same as what China and India was. But after the huge crash of Chinese markets where they lost 3.5 trillion USD, Today China's stocks are valued at around 6 trillion USD as compared to ours 3.6 trillion USD.

Obviously, Pakistan has more potential than Indian stocks, as the base is very low. Like US GDP growth hardly reaches 1% but look at Uganda or Nigeria. They have even grown at 13 or 14% an year since 2005-6.

Infact, market caps of top 10 Bluechip stocks of Indian companies like TCS/ HDFC/ SBI are like many times of KSE let alone the Sensex 100 or NIFTY 50

just so you know BSE and NSE were just a little spot on the investment Canvas some 20 years ago

 

[karan.1970]

Welcome back to the forum after a long ban for nth time.Looks like obsession is still going strong so bans don't matter.

Bad habits die hard.

Do you know market cap of TCS let alone Reliance?
TCS alone can handle KSE let alone comparing it with Reliance or even combining both of them to compare it with KSE.

My Bad.. mixed up in conversion from INR to USD

 

[Not So Good]

Haq's Musings: Time to Dump India Shares and Buy Pakistan and Hong Kong Equities?

Is it time to sell India short and go long on Pakistan?

Indian shares are highly overvalued while Pakistan and Hong Kong shares are trading at very attractive valuations, according to latest data published by Bloomberg. The Indian shares listed in Mumbai are trading at nearly 22 times earnings, more than twice the price-earnings multiples of Karachi and Hong Kong listed stocks.



Source: Bloomberg



Hong Kong's Hang Seng benchmark gauge for $4.3 trillion of shares was valued at 9.8 times reported earnings on Thursday, a 44 percent discount to the MSCI All-Country World Index, according to Bloomberg. That’s the cheapest level among developed markets worldwide and compares with a multiple of 10.2 for Pakistan’s KSE 100 Index. Russia’s Micex has the lowest valuation among major markets, trading at about 9.5 times profits.

Talking about Pakistan, Charlie Robertson, London-based chief economist at Renaissance Capital Ltd. told Bloomberg that “It (Pakistan) is the best, undiscovered investment opportunity in emerging or frontier markets...What’s changed is the delivery of reforms -- privatization, an improved fiscal picture and good relations with the IMF.” Pakistan is a reform story like neighboring India’s, but only better, Renaissance’s Robertson added.

The massive Chinese commitment to invest $46 billion in Pakistan's energy and infrastructure projects as part of China-Pakistan Economic Corridor has added to the excitement about Pakistan's brightening prospects.


CPEC Projects Map


China-Pakistan Economic Corridor (CPEC) is highly strategic for both China and Pakistan. It is expected to dramatically boost investment and trade activity in Pakistan via 29 industrial parks and 21 mining zones along the western, central and eastern routes.

This (China's $46 billion investment in Pakistan) can not be purely politically driven. Beijing is commercial: CEO’s, not think tank intellectuals, travel with politicians. Barron's Asia
Spurred by Chinese investment, the smart money is taking notice of Pakistan as an attractive investment destination. The investors are looking at the fact that Pakistani stocks have been outperforming both emerging and frontier markets for several years. The benchmark index of the Karachi Stock Exchange (KSE100) is up more than 20% in the last 12 months, according to NASDAQ.com.

Pakistani Shares in 2015:

After a dismal March, MSCI Pakistan rebounded strongly this month, returning 9.1% so far. In April, the iShares MSCI Frontier 100 ETF (FM) rose 4.3%, the WisdomTree India Earnings Fund (EPI) dropped 1.2%, the iShares MSCI India ETF (INDA) fell 1.9%, according to Barron's Asia.


Source: Economist Magazine
KSE-100 Performance:
In 2014, the KSE-100 Index gained 6,870 points thereby generating a handsome return of 27% (31% return in US$ terms), making Pakistan's KSE world's third best performing market. Total offerings in the year 2014 reached 9 as compared to 3 in the year 2013. After a gap of seven years, Rs 73 billion were raised through offerings in 2014 as compared to a meager Rs 4 billion raised in 2013. Foreign investors, that hold US$ 6.1 billion worth of Pakistani shares -which is 33% of the free-float (9% of market capitalization)-remained net buyers in 2014.
Pakistani Shares Valuation:
Even after outperforming both emerging and frontier market indices, Pakistani shares can be bought at deep discounts which make them very attractive, according to Renaissance Capital’s chief economist Charles Robertson. MSCI (Morgan Stanley Composite Index) Pakistan trades at only 8.4 times forward earnings, a 17% discount to MSCI Frontier Markets. For comparison purposes, fellow frontier south Asia markets Sri Lanka and Bangladesh trade at 13.4x and 21.4x respectively. India, included in the emerging market index, trades at 16.8 times.

Key Sectors:

Chinese investment in energy and infrastructure will help stimulate all sectors of Pakistani economy. But the sectors benefiting most from the $46 billion investment will likely include banks, energy and building materials, the sectors which are the favorites of Pakistani billionaire investor Mian Mohammad Mansha.

Being close to the ruling Sharif family makes Mansha the ultimate insider. Beyond his investments in banking, cement, energy and textiles, Mansha is also starting to invest in consumer products sector benefiting from rising incomes, growing middle class and increasing jobs created in Pakistan by the massive Chinese investment. Mansha owns a big chunk of Muslim Commercial Bank (MCB) share. He has recently been pumping more money into energy, cement and dairy businesses. Mansha's DG Khan Cements has announced plans to build a $300 million cement plant near Karachi. In additions, his Nishat Dairies has imported thousands of dairy cows for a dairy farm in Lahore.

Summary:

The $46 billion Chinese investment in energy and infrastructure has brought attention to tremendous investment opportunities in Pakistan, a nation of nearly 200 million people with rising middle class and growing consumption. Pakistani military's recent successes against the terrorists and China's massive investment commitments are expected to boost investor confidence in the country. Higher confidence will help draw other significant investors to invest in Pakistan over the next several years.
Related Links:

Haq's Musings

China Deal to Set New FDI Records in Pakistan

Post Cold War Realignment in South Asia

Haier Pakistan to Expand Production From Home Appliances to Cellphones, Laptops

Pakistan Bolsters 2nd Strike Capability With AIP Subs

3G, 4G Rollout in Pakistan

Pakistan Starts Manufacturing Tablets and Notebooks

China-Pakistan Industrial Corridor

US-Pakistan Ties and New Silk Route

Haq's Musings: Time to Dump India Shares and Buy Pakistan and Hong Kong Equities?

Here comes Haq amusing
India is doomed now because haq amusing is saying so

 

[Areesh]

Bad habits die hard.

Or there is no cure for obsession in India.