15 October 2018: Day in and day out, bloodbath at PSX continues as the stock exchange witnesses another slide on Monday, the first day of the week. After last week’s slaughter, the KSE-100 index sheds 750 points, reaching below 37,000 points level. At one point, it had lost 1,240 points in intraday trading.
KSE-100 index had risen from 20,000 points in May 2013 to nearly 53,000 points in May 2017. It started sliding when the Panama investigations against PM Sharif started, resulting in his disqualification as PM in July that year. PSX could never recover since.
12 October 2018: The cost of political intervention and price of instability: As investors lose confidence on macroeconomic stability, PSX witnesses another bloodbath on Friday. The KSE-100 index sheds 880 points, reaching at 37,500 points level.
8 October 2018: PSX witnesses a bloodbath as the KSE-100 index sheds over 1,400 points on Monday, hitting below 38,000 points. It had lost nearly 900 points on Friday.
The factors that could be attributed to current downward spiral are likely IMF bailout package, potential FATF implications for Pakistan and domestic politics including Friday 5 October arrest of Shehbaz Sharif, former Punjab CM and current leader of the opposition in National Assembly.
4 July 2018: PSX witnesses a bearish trend as the KSE-100 index slips by a staggering 1,300 points. This is chiefly due to the sudden announcement by Supreme Court of impending verdict in the Avenfield reference due against the Sharif family on Friday 6 July.
14 Dec 2017: As the National Assembly Speaker Ayaz Sadiq shows doubts that the assemblies will be able to complete tenure, PSX KSE-100 index falls to just above 38,000 points, losing nearly 15,000 points in a year.
27 Nov: The price we pay for country’s fragility, uncertainty and a bit of dharna adventure: The KSE-100 index drops below 40,000 points today. It loses more than 13,000 points since Panama case hearing picked up heat in early June, resulting in PM Sharif’s ouster.
20 Nov: Just the timing: On the day when 7th JCC on CPEC is being held in Islamabad to approve 9 SEZs, Islamabad has a dharna and PSX KSE-100 drops to just over 40,300 by shedding 527 points. So much for the investor confidence.
22 August: The now long-ongoing witch-hunt for former Prime Minister Nawaz Sharif and his family shows remarkably negatively in the stock market. Once darling of the world, PSX KSE-100 index nosedived to 41,000 points in early hours of business and then recovering to nearly 42,000.
11 July: In six weeks since Prime Minister Sharif and his family members started appearing before the Panama JIT, PSX KSE-100 index has shed nearly 9,000 points.
In 2016, KSE-100 was world’s poster bourse beating everyone in Asia, particularly its powerful neighbours China and India. KSE-100 was business media’s darling with praises from CNN to Bloomberg to WSJ to The Economist.
On 24 May, KSE-100 touched the highest 53,100 points, closing at 52,876 points for the day.
Today, KSE-100 closed at 44,120 points by shedding 2,100+ points in just one day. The total loss in six weeks is 8,980 points. In terms of rupee value, the loss to investors amounts to Rs 1.8 trillion ($17 billion).
1 June: After nine years of Pakistan as a Frontier Market, index provider MSCI reclassifies Pakistan from Frontier to Emerging Market status.
Asia Index has eight other emerging markets: China, India, Indonesia, South Korea, Malaysia, the Philippines, Taiwan and Thailand. Other emerging markets in Asia categorised in Middle East Index are: Qatar, Turkey and UAE.
1 June: The day appeared as a curse as PSX KSE-100 benchmark index bled and shed 1,810 points at the close of business at 48,780. In terms of fall, KSE-100 saw its biggest decrease in history with an intra-day fall of 2,230 points. According to Geo, the investors lost over Rs 326 billion ($3.1 billion) in a day.
The bloodbath occurred due to political uncertainty over Panama case JIT questioning PM Sharif’s son Hussain Nawaz for over 6.5 hours in Islamabad and because of planned exit of Frontier stocks.
24 May: PSX KSE-100 index briefly touches 53,100 points, finally closing at 52,876 points, an all-time record.
15 May: PSX KSE-100 index hits another all-time high today when it crossed 52,500 points. The surge is witnessed ahead of much anticipated MSCI announcement reclassifying Pakistan from Frontier to Emerging Markets.
8 May: PSX KSE-100 index surges 1,100 points, reaches all-time high, stopping just shy of 51,000 points.
24 April: The PSX KSE-100 index closed at over 50,000 points after uncertainty regarding Panama case verdict by Supreme Court was over. In weeks preceding the 20 April verdict, the market had gone down several thousand points.
9 March: Pakistan’s stock market has risen faster than any other in Asia over the past 12 months: The Economist
3 March: The Pakistan Stock Exchange (PSX) receives around Rs 8.9 billion from the Chinese consortium against selling of its 40 percent stake for Rs 28 per share. The money will be divided into 200 members, with each member receiving Rs 45 million.
Some ascent: KSE-100 index rose from 20,000 in May 2013 to 50,000 in February 2017. More in Bloomberg’s Pakistan’s Economy Is a Pleasant Surprise by Tyler Cowen, a professor of economics at George Mason University, USA.
24 Jan: History in the making: KSE-100 Index crosses a new all-time-high 50,000-point milestone.
20 Jan: Four members, representing the Chinese-led investors of Pakistan Stock Exchange (PSX), are expected to join the PSX board on 10 February.
A formal SPA (sales-purchase agreement) signing ceremony is being held today at PSX where the management control will be transferred through the board.
Funds to the brokers will be transferred in March.
10 Jan: Pakistan’s equity markets beat China’s and India’s, its two powerful neighbours, says Forbes in a piece titled, ‘Pakistan Beats India, Again’. Excerpt:
After beating India in equity markets, Pakistan beat India in another metric recently: Geopolitics.
The country’s leaders have skillfully leveraged Pakistan’s strategic geographic location to extract a series of benefits from America and China.
In fact, the performance of Pakistan’s equity markets and geopolitics isn’t reflective of their independence from each other. Geopolitics has been, and will be, a major driver for the country’s financial markets.
4 Jan: Pakistan’s KSE-100 Index today crosses a new all-time-high 49,000-point milestone.
3 January 2017: KSE-100 Index today sets a new all-time-high 48,828-point record. PSX is now inches closer to psychological level of 50,000 points.
29 Dec 2016: PSX ranks 5th best-performing stock market in the world in 2016: Bloomberg (photo below)
30 Dec: KSE-100 Index today crosses an all-time-high 47,800-point milestone.
22 Dec: A Chinese consortium wins bid for 40 percent stake in PSX for Rs 8.96 billion, or $85 million.
The consortium comprises three Chinese exchanges – China Financial Futures Exchange Company Limited (lead bidder), Shanghai Stock Exchange and Shenzhen Stock Exchange. Together they will take up 30 percent of the strategic stock.
Two local financial institutions – Pak-China Investment Company Limited and Habib Bank Limited – will pick up 5 percent each, the maximum permitted to a single institution under the regulations.
Besides 40 percent, another 20 percent of the PSX stake will be offered to public to bring liquidity into the capital market through brokers. – Dawn/The News
18 Dec 2016: Pakistan among best performing stock markets in 2016: Bloomberg
Pakistan🇵🇰’s market leaves India🇮🇳’s and China🇨🇳’s in the dust: Forbes
29 November: Unshaken by the rise in US interest rates, Pakistan’s equity markets continue to beat China’s and India’s markets by a wide margin.
In the last twelve months, Global X MSCI Pakistan ETF was up 16 percent, beating India’s and China’s comparable ETF’s, which were in negative territory for the year.
S&P raises Pakistan sovereign credit rating to B
31 October: S&P raises Pakistan sovereign credit rating to B from B-. It says improved macroeconomic stability has raised Pakistan’s growth prospects and bolstered its fiscal and external buffers.
S&P estimates Pakistan’s GDP per capita to be $1,500 in 2016 (versus $1,430 in 2015). S&P revises upward forecasts of average annual GDP growth to 5 percent over 2016-2019 from earlier estimate of 4.7 percent.
S&P B rating reflects improved construction, services sector activity, low-cost oil, finance, high investment associated with China-Pak economic corridor.
S&P forecasts Pakistan’s gross general government debt to fall below 60 percent of GDP by 2018. – Reuters
Pakistan outperforms 26 frontier and emerging markets in 2016: Bloomberg
20 October: Pakistan has outperformed both its fellow frontier markets and members of the emerging-market grouping that it is slated to join in 2017. The KSE100 Index has rallied 27 percent year-to-date to become Asia’s best-performing equity market in 2016, according to a basket of 26 peers tracked by Bloomberg (photo, below).
“The benchmark index can easily reach 60,000 before the general election in 2018,” said an investment analyst.
Pakistan to upgrade to Emerging Market status from next year
15 June: MSCI said its Pakistan Index will be reclassified to the Emerging Markets status, effective May 2017 Semi-Annual Index Review.
This upgrade is expected to attract over $400 million of fresh foreign investment as the index is tracked by the Funds with assets worth $1.5 trillion.
Pakistan will join 23 other countries on the MSCI index that represents 10 percent of world capitalisation.
Earlier rating upgrades:
5 Pakistani banks: ABL, UBL, HBL, MCB, NBP get Stable rating
Moody’s revises Pakistan rating from negative to stable
Moody’s Pakistan rating at B3 with a stable outlook
More about Pakistan:
Harvard predicts Pakistan GDP to grow by 5% over next 10 years
Pakistan is the world’s fastest-growing Muslim economy: The Economist
Pakistan GDP set to grow by 5.3% by 2020: IMF
$10B TAPI natural gas pipeline to be operational in 2020
In a corruption-riddled world, Pakistan is better than one-third countries: TI
Pakistan petrol prices 18th lowest in the world
China-led SCO admits Pakistan as member in June
Index provider MSCI has revealed it plans to consider upgrading Pakistan from frontier- to emerging-market status next year, Wall Street Journal published this optimistic forecast for Pakistan.
WSJ says: Citing “a number of positive developments over the course of the past 12 to 18 months,” MSCI said it would include Pakistan on its 2016 review list.
The government of PM Sharif, who came into power in June 2013, inherited low growth, high inflation, a foreign-exchange reserve crisis and crippling electricity shortages.
Since then, inflation has dropped sharply and foreign exchange reserves are more comfortable.
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Pakistan has already achieved recognition among frontier-markets analysts, including Renaissance Capital, which describes the country as “the best undiscovered investment opportunity in emerging or frontier markets.”
June 2016: Pakistan stocks jump most in a year as MSCI upgrade seen luring cash.
Have you seen CPEC stories on this blog?
CPEC fact sheet: 2013-2017
16 CPEC projects in Balochistan, 8 in KPK: Chinese Embassy
Chinese Embassy shares progress on CPEC projects
3 false reports about CPEC in one day far too many?
40 CPEC projects in 4 photos & 60 seconds
CPEC gets 4-layer security as Gwadar to be weapon-free
China’s world-reshaping One Belt, One Road (OBOR)
Pakistan was last in the MSCI emerging markets index in 2008 and brokers said its re-inclusion would be positive.
“Not only size of passive fund flows will increase, many large [emerging markets] funds may return back to Pakistan,” Karachi brokerage Topline Securities said.
Text: Saeed Shah, WSJ | Infographics: Bloomberg, The Economist, MSCI.
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29 Dec 2016: Pakistan Stock Exchange ranks 5th best performing stock market in 2016: Bloomberg