Author Topic: Latest News & Views : International  (Read 91884 times)

0 Members and 1 Guest are viewing this topic.


Re: Latest News & Views : International
« Reply #739 on: November 15, 2014, 08:14:12 AM »

Offline Salammembers

  • Senior Member
  • *****
  • Posts: 5872
  • Thanks Received: 26
    • View Profile

Offline MZ

  • Research
  • Senior Member
  • *****
  • Posts: 9162
  • Thanks Received: 33
    • View Profile

Offline aleeimran

  • Junior Member
  • **
  • Posts: 289
  • Thanks Received: 0
    • View Profile
Re: Latest News & Views : International
« Reply #743 on: April 06, 2015, 12:29:08 AM »
THE story begins in January 2015 when a little known Miami-based fund, Everest Capital suffered crippling losses in currency trading. CNBC reported that a single bad bet on the Swiss franc may have caused $860 million of its total $3 billion assets under management being wiped out.

It was fast becoming apparent to the financial community that the fund’s investors would soon be lining up outside its doors to redeem their investments and salvage what remained of them.

According to a Bloomberg news article, a significant portion of Everest’s investments were parked in emerging and frontier markets and across different asset classes. These included a real estate company in the United Arab Emirates, minority equity positions in some Indian banks, Chinese internet companies, Brazilian education firms and banks as well as renewable energy projects across emerging markets — in investor parlance known as FDI (foreign direct investment). In Pakistan, Everest’s investments were in equities — termed as FPI (foreign portfolio investment) — that brokers at the Karachi Stock Exchange estimated at $150m.

The panic at the stock exchange was entirely unjustified.
Stock market investments (FPI) are relatively easier to liquidate — and therefore more volatile — than FDI. That when the crunch came, Everest would aggressively sell off its portfolio investment in Pakistan, was a foregone conclusion for those who knew the goings on in January 2015.

Yet, Everest’s $150m portfolio constituted only a tiny part of the total nearly $6.6bn (around 2pc) of FPI in Pakistan. This meant it should not have caused a major disruption on the bourse. Yet it did. Here’s what happened:

By late January, sizeable foreign selling became discernible on the Karachi Stock Exchange. Everest had clearly begun to offload its Pakistan portfolio. But something else was also at work. A Feb 5 report in the local English press mentioned that on Feb 3 “out of nowhere, the sponsors of K-Electric have offloaded 4pc of their stake on the Karachi Stock Exchange”. The next day the KSE100 index decline began. Interestingly, Abraaj operates in roughly similar markets and asset classes as does Everest.

In its morning call of Feb 13 2015, circulated to its clients, leading stockbroker JS Investments highlighted that during the previous 15 trading sessions $65.6m in FPI had been pulled out, causing the index to sharply decline as fears of further selling from the foreign front crept in. Of this “around $53m net selling was witnessed in the electricity sector where Abraaj offloaded shares worth $65m in K-Electric,” the report said.

This was a major sell-off in a market that was already bracing for decline. As prices fell, Everest Capital intensified its distress sale and by March 13, the KSE100 was down 6.5pc from its peak at the start of February. But even more ominous to investors was the flow of steady data indicating sustained foreign selling. The figures included the total of $65m by Abraaj and whatever proportion of its $150m that Everest had sold.

All it takes at moments like this is for somebody to shout ‘fire’! And a stampede to the exit door follows. By March 30 the index had tumbled nearly 15pc which meant that over $10bn in investors’ assets had been wiped out. Those who rushed to the exit door were mainly leveraged investors; capital protected funds that guarantee the principal amount will not be lost. Interestingly none of the other foreign funds chose to exit despite rumours to the effect.

Then of course the expected thing happened. Markets emerge stronger after such shakeouts. The index went on rebound as investors flocked to pick up stocks at mouthwatering prices. Measured on forward earnings, Pakistani equities still trade at less than 50pc of those in peer economies (India, Indonesia, Philippines and Thailand) and as such will remain attractive for a long time.

The panic was entirely unjustified. Political risk and macroeconomic fundamentals have not been better in a long time. Low oil prices have brought down inflation and government deficits. Interest rates have been lowered. LNG and renewable energy have begun to arrive in the system. Moody’s has upgraded Pakistan’s bond rating and remittances continue to rise. Pakistan has successfully completed an International Monetary Fund programme and is qualified for further funding. And on the political front an anti-terrorism strategy is being implemented and there has not been much blowback.

Meanwhile, Pakistan awaits the arrival of the Chinese president this week during which major agreements are likely to be signed on the Pak-China corridor. With its new Asian Infrastructure Investment Bank, China also appears to now have a mechanism to finance these projects. Further down the horizon lie the government’s privatisation and power-sector reform agendas.

After the tumult, there may be a fair bit of good news for KSE investors in the days to come.

Offline aleeimran

  • Junior Member
  • **
  • Posts: 289
  • Thanks Received: 0
    • View Profile
Re: Latest News & Views : International
« Reply #745 on: May 06, 2015, 12:54:45 AM »
Standard and Poor's (S&P) Ratings Services on Monday revised projections for Pakistan's average real Gross Domestic Product (GDP) growth for 2015 to 2017 to 4.6 per cent from 3.8 per cent and also upped its outlook on Pakistan's long-term 'B-' credit rating to ‘positive’ from ‘stable’.

The per-capita GDP was estimated to increase 4.3pc to about $1,460 this year, from 5.4pc in 2014. S&P affirmed Pakistan's 'B-' long-term and 'B' short-term sovereign credit ratings.

S&P attributes the largely positive projections to diversification in income generation, the government's efforts towards fiscal consolidation, improvement in external financing conditions and performance, and stronger capital inflows and remittances.

Lower oil prices have also contributed towards bolstering business confidence and investment expenditure.

GDP per capita
GDP per capita is expected to average 2.6pc over the period 2015-2019 due to greater confidence in the agriculture and construction sectors, and in Pakistan's trading partners.

Inflation is expected to average 4.8pc over the period 2015-2019. Year on Year Consumer Price Index inflation followed a downward trend starting October 2014, and continues to decline in 2015 according to data in the State Bank of Pakistan Inflation Monitor.

Inflation slowed to 2.1pc in April 2015 from 2.5pc in the preceding month due to lower fuel and food prices ? the lowest level since 2003.

Read more: Inflation slows to 2.1pc in April

Government deficit
The general government deficit for 2015 is estimated at 4.5pc of the GDP compared to a previous forecast of 5.5pc. The favourable projections have been attributed to improved collections and tightened expenditure mainly in line with International Monetary Fund reforms.

Greater fiscal consolidation of 1pc of the GDP is expected over 2015-2016 through expansion of the tax base, reduction of tax concessions, greater compliance, and reduction of government expenditure on subsidies and public sector salaries.

The average fiscal deficit forecasted for the period 2016-2019 is 3.5pc, while the net general government debt burden is projected to fall to 50.5pc of the GDP by 2019 from 57pc in 2015 as the deficit decreases. Interest expenditure is expected to fall to 25.5pc of government revenue in 2019, from 30.6pc in 2015.

External performance
The decline in the current account deficit to 1.2pc of the GDP in 2014 is partly reflective of lower oil prices, and is expected to average 2pc over 2015-2019.

As of March 2015, foreign exchange reserves ? including proceeds from privatisation and donor disbursements ? increased to $11.6 billion from an average of $6b in 2012-2013.

Narrow net external debt is estimated to average 73.4pc over 2015-2019, and the country's external debt burden is expected to remain moderate, as is external liquidity ? at 106.8pc ? over the same period.

The improvement in Pakistan's external debt dynamics has eased access to markets and funding costs for the government, but these could be negatively impacted through volatility in global financial markets, increasing oil prices, and a weaker outlook for key trading partners.

Although Pakistan's external performance indicators stabilised further in 2014, they have a predominantly neutral impact on creditworthiness.

Banking sector
The banking system's high profitability and its strong capitalisation contribute to its soundness. The SBP has a long record of keeping inflation at low levels and utilising market-based instruments to regulate policy.

According to S&P, a more diversified financial and capital market would improve credit metrics and transmit policy more effectively.

The sector is still developing risk assessment and prudential measures, which poses a risk to the banking system.

Risk factors
The S&P analysis revealed that Pakistan's internal and external security risks continue threatening governmental and institutional effectiveness. The material risk of domestic conflict and social upheaval continue to challenge policy responses.

Limited transparency and governance, corruption, nepotism and lack of adequate data undermine the effectiveness and stability of Pakistan's policymaking and political institutions.

Low income, weak monetary policy framework and underdeveloped infrastructure ? particularly in the energy sector ? and services have negatively influenced fiscal performance.

Export market uncertainty and a weak business climate pose a risk to the growth outlook for Pakistan's economy.

Offline SBM

  • Master Troll
  • Administrator
  • Senior Member
  • *****
  • Posts: 11234
  • Thanks Received: 100
  • Ouulman :)
    • View Profile
Re: Latest News & Views : International
« Reply #746 on: July 06, 2015, 06:30:52 AM »
I hate waking up.

Offline Ahmedkhan

  • Junior Member
  • **
  • Posts: 122
  • Thanks Received: 0
    • View Profile
Re: Latest News & Views : International
« Reply #747 on: January 04, 2016, 07:35:10 PM »
Mujhe ya sites boht pasand ha kiu k yahan updates milti rehti ha jis se kam karna boht asan hojata ha. Mujhe to already kafi madad mil rahi ha OctaFX broker ki waja se jo mujhe daily market ki news aur analysis provide karta ha jis se trading karne mai boht asani hojati ha aur risk bhe kam hojata ha to is waja se mere lia ya sab se best ha aur mujhe success achieve karne mai kafi asani hojati ha.

Offline hamzaaliwala

  • New Member
  • *
  • Posts: 18
  • Thanks Received: 0
    • View Profile
Re: Latest News & Views : International
« Reply #748 on: December 10, 2016, 03:08:39 PM »
Review: 2016 till now
The start to the year was an extremely worrisome and dull one as growth in China/EU and the US slowed down. This not only decreased the global commodity prices but also affected the equity markets all across. However, the bears in the market only dominated shortly. China slowly but surely started exceeding growth expectations leading to the recovery of oil and commodity prices. Tensions between Pakistan and India brought some instability to the South Asian playground however the markets became prone to those triggers. The biggest setback came from Brexit, as the pound hit a 20-year low and shook the financial world. However, markets took the hit with a grain of salt and were back on track. The evening of November 9, 2016 – turned out to be one of the worst for the global markets when Hilary conceded to Trump – with the NYSE dropping as much as it did on September 11, 2016. Who would have know this was going to be a blessing in disguise as many Bulls took major positions on the dip and rallied the DOW to its highest index ever. Riding the wave, the KSE-100 index also tagged along, as the index has been up 36% – the highest return it has had in 3-years.

The outlook for the equity market in Pakistan for 2017 – mainly depends on economic policy decisions and the political situation – especially panama-gate. However, some trends to watch are: higher commodity prices compared to 2014 and 2015 levels, rising domestic inflation and the strengthening of USD in the wake of expected US fed rate increase.

In 2017, analysts eye an index target in the range of 50,00-52,000, which at current closing of 44,741 offers a market return in the range of +10-16%. There target is simply based on re-rating of market fwd P/E multiple from 9.8x to 11.0x.

What to expect in the US?
If Trumps successful in reducing corporate taxes, the companies which will benefit the most from these are the large cap multinationals. Expectations of this is why we see the Dow, and to a lesser degree, the S&P booming today.

Mid cap and small cap stocks may get some small juice from profit retention but in reality that has little effect on business volume. Those thousands of mid and small companies who have a piece of the government spending pie will see their business cut.

If Congress abolishes the federal minimum wage and Trump revokes Obama’s efforts to raise the working conditions at the bottom for federal contractors, then there will be a spate of market optimism for low-tech companies. However, it will be short-lived. Local and regional finance depends on local wages, and politicians (for the most part) know this. Most blue and purple states, and major metros in red states (where the majority of business volume occurs) will immediately implement local wage minima. The alternative is implementing and funding a more expensive welfare net. This may actually wind up raising wage scales higher than progressives were asking in the Democratic platform. Red states, which allow wage scales to languish, will find local economies underperforming, similar to what Kansas has experienced in the last four years.