The equity market of Pakistan is increasing and it is beating India and China markets for the last five years.
The stock exchange of Pakistan is performing well than India and China and the difference was about 2 to 1, when you compare it with the performance of stock exchange of China this year alone. This news is surprising for Pakistan as this country is facing the frequent terrorist attacks and political instability. In the GDP growth rate of China and India, Pakistan is still lagging behind and unemployment is also great danger.
What are the elements, which contribute in the larger investment while comparing it to India and China?
Reasons for Outperforming our Neighbors
When you consider all things, then you find that India and China are much stable markets and the main reasons for their higher stocks is due to their foreign investments, which Pakistan is receiving from different sources. The markets of China did not get any foreign capital with the introduction of some strict government policies and it has decreased the confidence of investor in the country. There is slow progress in India to introduce new reforms and it has hurt the growth rate.
Pakistan had Frontier market status and now it went to the emerging market status and it is attracting the foreign investment of over $500 million in value. The terrorist attacks did not affect the stock exchange performance as it did not disrupt the trade. The terrorist attacks in Pakistan did not target the trade activities and Pakistan is also to be used as the frontier market in recent five years and it was favored by the number games.
Pakistan has made the market reforms and various investors like World Bank appreciated these efforts and World Bank also made the investment of $1 billion as vote of confidence. There are some of the domestic acquisitions, which they get from the foreign suitors like Karachi’s K-Karachi by Shanghai Electric Power Co also support the market reform efforts, which are made by Pakistan. Now these factors are helping Pakistan to get the foreign exchange and attention of the foreign investors.
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