…wow, what a surprise. So I guess we all really are as fickle and callous as I suggested in my last post. The good news from the article is:
Pakistani stocks are cheap and still worth holding in spite of political uncertainty, Merrill Lynch & Co.’s chief Asian strategist Mark Matthews said in an interview yesterday.
…
The country’s shares on average trade at 10 times reported earnings with a dividend yield of 6 percent, Matthews said, citing Merrill Lynch data. That’s compared with “consensus” valuations for Vietnamese stocks of 20 times, he said.
if we started judging the nature/moral bent of a country (if one can reasonably do such a thing at all) by the movements in its stock market, we’d have to give up on people and any illusions about sanity, principles & values altogether…
the kse must bounce back, b/c that is it’s nature…it is merely moving on snippets of news & traders’ positioning. I don’t think you can say anything about its overall viability right now, until the underlying sources behind its volatility have settled down.
Fickle, because that’s the nature of the market, but callous because 5 years from now the PPP is going to be campaigning on how BB’s loss was such a blow to mankind that world markets dropped 50 bips and the KSE dropped 4.7% in one day.
My point is that the KSE basically gained back everything it lost immediately. And its overall viability is excellent, based both on the ML analyst’s comment and, more pertinently, by the fact that investors just couldn’t wait to buy back what had been sold a few days earlier…this, without any guarantees that the new election date isn’t part of some new set of Musharraf shenanigans.
My question is do Pakistanis benefit from their stock market, is it a general trend for people in Pakistan to own stock? In Saudi Arabia almost every Saudi bought stocks when it started out, a couple of years later people have started pulling their money out of it and putting it back in to real estate. By the way, whats your take on the wheat shortage? It must have been a precarious situation to begin with, seeing as how 3 days of rioting are being blamed for the whole thing.
No, the vast majority are in the rural areas; the urban population has been getting more involved but I seriously doubt anything more than 15% of the urban population owns stock.
Of course, that’s the point about the stock market: beside it being fickle and self-serving, its strength only reflects the economic well-being of a very small number of Pakistanis.
Don’t know much about the wheat shortage.