ISLAMABAD: Pakistan has emerged, as a top choice for investment and its stock exchange is one of the best performing bourses in the emerging markets, Finance Minister Senator Ishaq Dar said.
When I give different reasons for Pakistan to be a good place for investment, it is necessary to mention from the day of elections the stock exchange of Pakistan has emerged as one of the best performing bourses in the emerging markets, Dar added.
From the day we won the election on May 11, 2013 till now, market capitalisation has gone up 40 percent in both rupee and dollar terms. The market cap is around $70 billion now.
Dar said the exchange rate initially shot up to Rs 111 a dollar at one time but has now gone down to Rs 98 to Rs 99 a dollar and it has remained stable for the last four months after the government took certain corrective measures.
Both the forex market and the rupee are stable. So all signs are positive for foreign investors to enter the Pakistan market.
Dar said investors had showed reluctance in looking toward Pakistan till last year, before the new elections, because the predictions and calculations about its economy were not very positive.
The fear was the Pakistan economy would not be able to sustain and probably would go in default by June 2014, if you recall.
Obviously, neither the individual nor the corporate foreign investors were looking toward Pakistan nor the multilateral donors like World Bank, International Monetary Fund, Asian Development Bank and other institutional agencies were willing to deal with Pakistan with declaration of economists and international experts that Pakistan will go in default. That is a year and a half ago and there was no business.
In the last one-year, however, things have changed in Pakistan. We are in the federal government for the third time. We have turned around the economy. We have taken the right direction, said Dar.
Dar ruled out the danger of Pakistan going into default. Its Gross Domestic Products growth has gone up the highest in 6 years about 4 percent plus and we were hoping and planning next year it would go to 5 percent and the third year 6 percent and the fourth year 7 percent (2017).
He said the country had improved its economy tremendously. We have brought the fiscal deficit from 8.8 percent to already under 6 percent. This is a huge cut. In the next two years, we will reduce to 1 percent and bring it to 4 percent, which is an internationally accepted norm.
Home remittances have been the highest in the last one-year, when remittances increased 12.4 percent roughly. They reached around $14 billion (up to May) in 2013-2014 (11 months).
Our exports have grown 4 percent and reserves increased from an all-time low to around $7.5 billion in February because of the repayment of the loans of previous governments. Now we have already crossed $14 billion by end of June.
World Bank had drawn up a program of loans after five years. The Asian Development Bank also approved $900 million loans for electricity projects.
We have gone to the international bond market after 7 years. The previous government tried but they could not do it.
We offered $500 million to sell but the international bond market offered $7 billion. I decided to sell $12 billion. I have left room for sukuk, which we will offer before September.
Dar said the country’s tax collections have grown 16 percent. Last year, it was only 3 percent. Now, things are shaping up.
We are also focusing on exploration and production of hydrocarbon (oil and gas) in Pakistan and it has great potential.
He said our production although small has increased about 30 percent in last one year.
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