Better foreign flows, improving Pak-US relations and easing inflation helped Pakistan equities in July to outperform Asian Emerging and Frontier markets tracked by MSCI.
MSCI Pakistan up 6.1%, KSE 100 up 5.6%
With continued headwinds in the Euro zone and uncertain global economic growth, all leading MSCI Indices remained almost flat in the month of July 2012. MSCI World posted 1.2% return while MSCI Emerging and MSCI Frontier markets posted a return of 1.6% and 0.9% respectively.
On the other hand, Pakistan market during the outgoing month outperformed all regional markets. Amongst 12 Asian countries tracked by MSCI, Pakistan posted highest US dollar return of 5.6% beating all other regional markets that posted a return ranging from (-ve) 9% to 4%. India and China, the two leading markets posting negative return of 1.1% and 4.4% return, respectively. The local benchmark KSE 100 Index was up 5.6% (US$5.6%). Moreover, Pakistan’s performance relative to other Asian Frontier market was far better with all posting negative return. Sir Lanka, Vietnam and Bangladesh posted a negative return of 0.4%, 2.0% and 8.9%
Amongst better performing markets of 2012TD
So far in 2012 Pakistan is second best performing market in Asia while it is top performing in Asian Frontier Markets. During the year, the benchmark index posted a gain of 22% in dollar terms only to be beaten by Philippines that posted a return of 27%.
Foreigners turned net buyers in July
Compared to foreign net selling of US$ 109mn (US$40mn excluding Hubco deal) in the month of June 2012, foreigners in Pakistan turned net buyers of US$30mn (gross buy US$64mn, gross sell US$33mn) in the month of July.
So far in 2012, foreigners have bought US$540mn worth of shares while sold US$541mn value of shares, thus resulting in net selling of US$1mn. However, if we exclude hubco deal, then foreigners are net buyers of US$68mn in 2012YTD.