Pakistan: back from the brink
The Karachi Stock Exchange index has jumped by more than 50% in 2009 as Pakistan's economy stepped back from the brink of default and stirred interest among foreign investors.
Pakistan's stockmarket "is coming out of hibernation", says Citigroup. The Karachi Stock Exchange index has jumped by more than 50% to above 9,000 in 2009 as the economy stepped back from the brink of default late last year and stirred interest among foreign investors.
The International Monetary Fund (IMF) has just approved a loan of $11.6bn, up from the $7.6bn agreed last November, to help stabilise the economy; interest rates were cut by 1% last month after inflation slid to 11% from 25%; remittances are flowing in; ratings agency S&P has just upgraded the country; and the profit cycle seems to have turned, says Citigroup. The consumer sector's profits are up 32% year-on-year.
The market is also Asia's cheapest, on a p/e of around seven. Foreigners "are back with flows not seen since February 2008"; net inflows reached $93m in August. However, the central bank is worried that the recovery will prove "slow and painful", while the IMF's Adnan Mazarei notes that political unrest is likely to remain a problem with a third of the country living below the poverty line. So while stocks look set for a short-term fillip, the long-term outlook remains as murky as ever.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
![https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748-320-80.jpg)
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Regulator moves to protect access to cash amid branch closures and disappearing ATMs
News The Financial Conduct Authority has told banks to start assessing if local communities have adequate cash access from mid-September
By Marc Shoffman Published
-
VAT hike on private school fees could come earlier than previously expected
The government could start charging VAT on private school fees as soon as January 2025, according to the latest reports. What does it mean for parents?
By Katie Williams Published