With an improving macroeconomic environment, Pakistan Stock Exchange (KSE) index has gained close to 400% since 2009, and 40% this year alone – leaving neighbouring markets in the dust. “Pakistan’s equities have had a number of things going their way, like an improving macroeconomic environment – rising economic growth and falling inflation and interest rates,†according to a report carried by Forbes – an American business magazine, published bi-weekly. “The country’s economy grew close to 6 percent in 2016, up from 4.8 percent in 2015, with inflation running around 4 percent, down from 10 percent four years ago,†the report added.The report further noted that the 10 year Treasury Bond has yielded 8 percent, down from 12.5 percent four years ago.Pakistan Stock Exchange (PSX 100 Index) has been ranked fifth best performing stock market in the world in the year 2016 by Bloomberg. With PSX 100 Index gaining 43.05%, Pakistan remained the 5th best performing stock market in 2016, after Brazil IBOVESPA Index (63.36%), Kazakhstan KASE Stock Ex (59.95%), S&P/BVL Peru General TRPEN (59.15%) and Russian RTS Index $ (50.03%), according to the World Equity Indices table posted by Bloomberg on its website. The Bloomberg in its report titled ‘Here Are the Best and Worst Performing Assets of 2016’, analysed the performance of different countries and regions in 2016 in terms of currencies, equities, commodities and bonds. The PSX has gained a lot of momentum in the outgoing year. The Exchange has also offered 40 per cent of its shares to a Chinese-led consortium, which is made up of the China Financial Futures Exchange, Shanghai Stock Exchange, Shenzhen Stock Exchange, Pak China Investment Company Ltd and Habib Bank Ltd, according to an online statement by Shanghai Stock Exchange on Friday. The three Chinese exchanges will have 30 per cent of the PSX. The investment will help promote economic and financial cooperation between the two countries, it added. Although Pakistan is getting international acknowledgement about its economy but the road to prosperity of thepeople is yet to be achieved. The State Bank of Pakistan in its recent report highlights the challenges for the economy. These range from widening fiscal and current account deficit to lowering remittances, exports and inflation of food items. All these are very keyproblems and financial manager of the government need to think about to check the trends.The rapid decrease in remittances and exports carry great consequences and hinder the government’s efforts to achieve the targets. In the last three years, the government has managed to revive the growth rate through its reforms program but much more needs to be done to cure the ailments in the economy. Necessary support needs to be given to important sectors especially the agriculture and agro-based industries in order to bolster the exports and similarly a proper policy is required to strength the remittances, which support the country in capping the current account deficit. The government should expedite the implementation on its economic reform agenda to get maximum improvement in the economy before completion of its term so that people can get benefits.
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