KSE: Wrold's second best performing stock exchange after Japan's

[farhan_9909]

THE restive Pakistani megacity of Karachi, where political parties, criminal gangs and extremist groups vie for control, is also home to one of the world's best-performing stockmarkets. The Karachi Stock Exchange (KSE) has risen by 40% in local-currency terms so far this year—of the stockmarkets tracked by The Economist, only Japan's has performed better. The KSE sizzled last year, too, posting a gain of 49%.


Some of this reflects the country's potential. Pakistan's prospects have been buoyed by the election in May, the first time a fairly elected civilian government served a full term and handed over to another. A new IMF loan was secured in July. The KSE's rise also reflects investors' enthusiasm for "frontier markets", the world's wilder bourses. More familiar emerging markets have lost momentum recently, but the MSCI frontier-markets index has kept climbing.

As the name suggests, however, frontier markets are not for the faint-hearted. The KSE is illiquid: only 60 of its 569 listed companies trade regularly. Its soaring performance can partly be attributed to an amnesty announced in January 2012, which allows people to buy stocks until June 2014 with no questions asked about the source of funds. After the amnesty began the average daily volume on the KSE, which has a market capitalisation of only $52.7 billion, more than doubled.

The amnesty was intended to bring undocumented funds into the tax net. Some, though, have characterised it as a gift to corrupt officials and criminals: it blocks the tax authorities from asking where the money comes from. The country's anti-money-laundering scheme leaves it to the relevant broker or bank to flag any suspicions.

Allegations of market manipulation are common. The Securities and Exchange Commission of Pakistan (SECP), the market regulator, is criticised for being too close to brokers. Four seats on the nine-member "policy board" designated for independent outsiders have largely remained vacant since the board was established 13 years ago to monitor the regulator's performance; they are currently unoccupied. When the SECP does mete out fines, they are symbolic. If fines were too harsh firms would delist, officials say. You have been warned.

 

[Dovah]

1) No source.
2) Thread title manipulated. (The actual title is this Stocks soar, suspicions swirl :laugh)
3)

Allegations of market manipulation are common. The Securities and Exchange Commission of Pakistan (SECP), the market regulator, is criticised for being too close to brokers. Four seats on the nine-member "policy board" designated for independent outsiders have largely remained vacant since the board was established 13 years ago to monitor the regulator's performance; they are currently unoccupied. When the SECP does mete out fines, they are symbolic. If fines were too harsh firms would delist, officials say.

This belongs in lies and denial thread.

Also, lol @selective highlighting. Deluded jihadi.

 

[Blackwater]

THE restive Pakistani megacity of Karachi, where political parties, criminal gangs and extremist groups vie for control, is also home to one of the world's best-performing stockmarkets. The Karachi Stock Exchange (KSE) has risen by 40% in local-currency terms so far this year—of the stockmarkets tracked by The Economist, only Japan's has performed better. The KSE sizzled last year, too, posting a gain of 49%.


Some of this reflects the country's potential. Pakistan's prospects have been buoyed by the election in May, the first time a fairly elected civilian government served a full term and handed over to another. A new IMF loan was secured in July. The KSE's rise also reflects investors' enthusiasm for "frontier markets", the world's wilder bourses. More familiar emerging markets have lost momentum recently, but the MSCI frontier-markets index has kept climbing.

As the name suggests, however, frontier markets are not for the faint-hearted. The KSE is illiquid: only 60 of its 569 listed companies trade regularly. Its soaring performance can partly be attributed to an amnesty announced in January 2012, which allows people to buy stocks until June 2014 with no questions asked about the source of funds. After the amnesty began the average daily volume on the KSE, which has a market capitalisation of only $52.7 billion, more than doubled.

The amnesty was intended to bring undocumented funds into the tax net. Some, though, have characterised it as a gift to corrupt officials and criminals: it blocks the tax authorities from asking where the money comes from. The country's anti-money-laundering scheme leaves it to the relevant broker or bank to flag any suspicions.

Allegations of market manipulation are common. The Securities and Exchange Commission of Pakistan (SECP), the market regulator, is criticised for being too close to brokers. Four seats on the nine-member "policy board" designated for independent outsiders have largely remained vacant since the board was established 13 years ago to monitor the regulator's performance; they are currently unoccupied. When the SECP does mete out fines, they are symbolic. If fines were too harsh firms would delist, officials say. You have been warned.

Stock exchange of a small country like Pakistan does not reflect economic growth, miya farhaan

 

[bennedose]

Some elementary statistics which the Pakistani "state of mind" cannot understand

If there are two momeens and one more momeen arrives in jannat , then the number of momeen is increased by 50%

If there are 100 kafirs and 10 more kafirs arrive in hell, the number of kafirs goes up by only 10%

So although the number of kafirs who arrive in hell is 1000% more than the number of momeen arriving in heaven, the percentage of momeen appears to be higher because the number value of momeen is low.

If you take an under performing faltu stock exchange it is easy to make it jump up and down in percentage terms. You need to look at real value and the companies whose shares are exchanged.

Of course I apologise to all Pakistanis here because they will not understand. But we must also think of non Pakistanis who constitute 97% of people in the world. It amazes me that Pakistan that contributes about 3% of the world population contributes only 0.00001% of the intelligence in the world. One scientist estimated that donkeys contribute 0.00004% to the world's intelligence, but many live in Pakistan.

 

[Singh]

How did Karachi get a world-beating stock exchange? ​

AS RICH countries' economies slump, brave investors looking for fast returns may be tempted to look further afield. Which of the world's more exotic markets offer the best returns? Mexico has developed a following among investors bored of Brazil. The Philippines has been on a roll too, recently winning its first ever investment-grade credit rating. But virtually everywhere is beaten hands down by the tiny Karachi Stock Exchange (KSE), which has risen by 40% so far this year in local currency terms. Of stock markets tracked by The Economist, only Japan's has performed better.

This may not be what most people associate with Pakistan's most populous city, which is more famous for terrorist explosions than economic booms. The exchange's strong performance is partly due to improving conditions in Pakistan, including a reasonably free and fair election in May which was followed by a peaceful handover of power. Meanwhile, the slowing down of the BRIC economies has driven investors to try out ever more exotic markets. All the same, the KSE's soaring growth is surprising: Pakistan's economy is expected to grow by only about 3.6% this year, much less than many other emerging economies. And the stock exchange itself—which has a market capitalisation of just $52.7 billion—is a tricky place to invest, with only 60 of its 569 listed companies trading regularly.

Part of the Karachi exchange's lightning growth is due to an unusual amnesty enacted in January 2012. The authorities declared that from that date, investors would be allowed to buy shares with no questions asked about where their money came from. The amnesty, which is due to last until June 2014, is designed to encourage people with undocumented funds to invest them in the market, thus bringing the cash into the formal economy and within reach of the taxman. It seemed to work: after the amnesty's introduction, the average daily volume traded on the KSE more than doubled.

The boom is good news for investors. But some wonder if there may be a downside to relaxing the rules on checking the origins of the money being pumped into the bourse. Pakistan has more than its fair share of corruption: it falls within the bottom quarter of a worldwide ranking compiled by Transparency International, an anti-graft watchdog. If people want to launder their ill-gotten gains, the authorities have their work cut out to stop them: flagging up suspicious activity is left to banks and brokers. The KSE's growth is real enough, but the source of the rupees fuelling its boom is not always clear.

The Economist explains: How did Karachi get a world-beating stock exchange? | The Economist

 

[Singh]

Its an elaborate scheme to convert black(illegitimate) money to white(legitimate)

 

[sob]

Saw a television interview of Hasan Nissar a few months back. He was very clear that the jump in remittances and the KSE performance was due to the black money coming back into Pakistan freshly laundered.

 

[sob]

Its an elaborate scheme to convert black(illegitimate) money to white(legitimate)

I am amazed by the scope of the scheme. You can bring in millions convert it into white and then send it out again.

 

[Singh]

I am amazed by the scope of the scheme. You can bring in millions convert it into white and then send it out again.

And get a 40% Return.

I present to you the next big crisis in Pakistan.

 

[farhan_9909]

I am sure it will clock 30k points next year or reach upto 100billion dollar

from 40billion dollar market cap to 70billion dollars in a single year is a huge leap

 

[Singh]

I am sure it will clock 30k points next year or reach upto 100billion dollar

from 40billion dollar market cap to 70billion dollars in a single year is a huge leap

Mashallah. And what makes it more spectacular is that the fundamentals are weak.

 

[Singh]

The Karachi Stock Exchange : Inefficient frontier​

THE restive Pakistani megacity of Karachi, where political parties, criminal gangs and extremist groups vie for control, is also home to one of the world's best-performing stockmarkets. The Karachi Stock Exchange (KSE) has risen by 40% in local-currency terms so far this year—of the stockmarkets tracked by The Economist, only Japan's has performed better. The KSE sizzled last year, too, posting a gain of 49%.

Some of this reflects the country's potential. Pakistan's prospects have been buoyed by the election in May, the first time a fairly elected civilian government served a full term and handed over to another. A new IMF loan was secured in July. The KSE's rise also reflects investors' enthusiasm for "frontier markets", the world's wilder bourses. More familiar emerging markets have lost momentum recently, but the MSCI frontier-markets index has kept climbing.

As the name suggests, however, frontier markets are not for the faint-hearted. The KSE is illiquid: only 60 of its 569 listed companies trade regularly. Its soaring performance can partly be attributed to an amnesty announced in January 2012, which allows people to buy stocks until June 2014 with no questions asked about the source of funds. After the amnesty began the average daily volume on the KSE, which has a market capitalisation of only $52.7 billion, more than doubled.

The amnesty was intended to bring undocumented funds into the tax net. Some, though, have characterised it as a gift to corrupt officials and criminals: it blocks the tax authorities from asking where the money comes from. The country's anti-money-laundering scheme leaves it to the relevant broker or bank to flag any suspicions.

Allegations of market manipulation are common. The Securities and Exchange Commission of Pakistan (SECP), the market regulator, is criticised for being too close to brokers. Four seats on the nine-member "policy board" designated for independent outsiders have largely remained vacant since the board was established 13 years ago to monitor the regulator's performance; they are currently unoccupied. When the SECP does mete out fines, they are symbolic. If fines were too harsh firms would delist, officials say. You have been warned.'


Inefficient frontier — [url]www.economist.com — Readability[/url]

 

[Blackwater]

I am sure it will clock 30k points next year or reach upto 100billion dollar

from 40billion dollar market cap to 70billion dollars in a single year is a huge leap

ohh paki economist. there is northing to proud off. ur own black money routed through dubai invested in Karachi by foreign powers