You can make 3 times more money by betting on stocks in Pakistan than in India

NEW DELHI: At a time when the world has turned its focus on India, its neighbour Pakistan is running away with all the honours in financial markets.

Data compiled by ETMarkets.com shows you could have made three times more money by betting on the Karachi Stock Exchange’s KSE30 index than on Bombay Stock Exchange’s Sensex.

The KSE30 has given 18 per cent returns so far this year through July 12, making it the best-performing Asian index. Compared with that, the BSE Sensex has given just 6 per cent return in the same period.

While, IMF has marked India as the brightest spot in the global economy, it has also been raising its forecast for Pakistan. In May, IMF raised Pakistan’s GDP forecast for FY2017 to 5 per cent from 4.7 per cent.

“Growth is expected to strengthen to 5 per cent in FY 2016-17, supported in part by an expected pickup of investment related to the China-Pakistan Economic Corridor (CPEC),” IMF said in a report.

Not only that. The London-based BMI Research, a financial market analysis firm, has rated the country among the next big drivers of global economic growth. Others on the list are Bangladesh, Ethiopia, Egypt, Kenya, Indonesia, Myanmar, Nigeria, Philippines and Vietnam.

In May, MSCI reclassified the country as an emerging market, allowing billions of emerging market funds to flow into the country’s stock market. This is also seen by experts as a sign of the country’s rapid economic growth boosted by financial support from its eastern ally China.

Analysts and brokers in Pakistan say the decision to upgrade the country to the emerging markets group will lead to significant inflow of foreign investment, considering the size of the index.

Funds with assets valued at $1.5 trillion track the MSCI Emerging Markets Index. Brokers said the upgrade is likely to attract other investors too, considering Pakistan’s stable macroeconomic indicators and steady growth of its stock exchange, Wall Street Journal report noted.

However, the country is facing an image issue, a report by Reuters noted.

Pakistan’s $250 billion economy is growing at the fastest pace in eight years, but attracted only $1 billion in foreign direct investment (FDI) in the nine months to April, the report said.

The country’s low integration with global financial markets makes it attractive to emerging market investors in the face of global volatility.