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Showing posts from October, 2016

Smartphones For Digital & Financial Inclusion in Pakistan

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Mobile broadband (3G/4G) subscriptions in Pakistan crossed 34 million in September 2016, according to Pakistan Telecommunication Authority.  This figure includes 3.5 million subscriptions of higher bandwidth 4G/LTE offered by China Mobile Pakistan (CMPak aka Zong) and Warid.

Pakistan Telecommunications Authority (PTA) is forecasting the number of smartphones in the country to reach 40 million by the end of the year 2016, according to Daily Times.





More and more these smartphones are now becoming affordable and accessible to the urban poor and the rural populations of the country. This is helping close the digital divide.

Beginning in October 2016,  Pakistani government will give away five million smartphones to farmers in the country in an effort to improve knowledge of modern farming techniques, according to the BBC. Large numbers of farmers in countries such as India and Kenya have also recently experimented with smartphone technology.

In addition, the Benazir Income Support Program …

Investors Undeterred By Modi's Threats Against Pakistan

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Indian Prime Minister Narendra Modi's threats of war and Pakistan's isolation have failed to deter investors as KSE-100 index made new highs this week.  The key index of Pakistani shares closed at an all time high level of 41,412.04 points this week. Pakistan shares index has continued to outperform all regional and emerging market indices over the last 5 years.

Modi's Threats:

First came "boli nahi, goli"  (Bullets, not talks). Then came "chappan inch ki chhaati" (56 inch chest, 44 actual according to Modi's tailor) and "Munh tor jawab (Jaw-breaking response) followed by threats of isolating Pakistan and claims of surgical strikes across the line of control in Kashmir.

Investors ignored all of Modi's bluster as just rhetoric and drove Pakistani shares to a new all-time record.

Market Performance:

To add insult to injury, the investment flow maintained Pakistan market as the best performer in the region with KSE-100 outperforming all regional…

Remittances to Pakistan Rise 5.1% to $20.5 Billion in 2016

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Overseas Pakistanis sent home $20.5 billion in remittances in 2016, an increase of 5.1% over 2015, according to the World Bank. Pakistan's remittances are 7.5% of its 2015 GDP of $270 billion.

Pakistan's Declining Exports:

The increase in remittances from the diaspora is welcome news in Pakistan suffering from precipitous 12% decline of export earnings and gaping 35-year high trade deficit of $24 billion in 2016.

The World Bank report said 2016 remittances to India declined by 5% to $65.5 billion while Bangladesh received $14.9 billion, a decrease of 3.5% from the previous year.

Declining Remittances to South Asia: 

Remittances to  South Asia region as a whole declined by 2.3 percent in 2016, following a 1.6 percent decline in 2015. Remittances from the oil-rich GCC countries continued to decline due to lower oil prices and labor market ‘nationalization’ policies in Saudi Arabia, according to the report.



Top Recipients of Remittances: 

The top recipients of remittances in 2016 ar…

CPEC To Add 2.5 Million New Jobs & Boost Pakistan GDP Growth to 7.5%

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China-Pakistan Economic Corridor (CPEC) is expected to add over 2 million direct and indirect jobs to Pakistan's economy and boost the country's GDP growth rate to 7.5%.

Jobs & Economic Growth in Pakistan: 

US-based consulting firm Deloitte and Touche estimates that China-Pakistan Economic Corridor (CPEC) projects will create some 700,000 direct jobs during the period 2015–2030 and raise its GDP growth rate to 7.5%,  adding 2.5 percentage points to the country's current GDP growth rate of 5%.



An additional 1.4 million indirect jobs will be added in supply-chain and service sectors to support the projects.  An example of indirect jobs is the massive expansion in Pakistan's cement production that will increase annual production capacity from 45 million tons to 65 million tons, according to a tweet by Bloomberg's Faseeh Mangi. Other indirect jobs will be in sectors ranging from personal services to housing and transportation.



CPEC Benefits for Pakistan & China: 

Gated Communities Proliferating in Pakistan

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Real estate developers have so far built over 250 gated communities across Pakistan in response to rising demand from upwardly mobile Pakistanis.



These communities cater to insatiable demand for world-class and well-appointed housing with modern infrastructure including well-built wide roads and reliable supply of water and electricity. Additionally, they offer various state-of-the-art amenities such as schools, hospitals, mosques, restaurants, theaters, shopping malls and parks located within secure communities, according to a report by Adrian Bishop, editor of Opp.Today.

Gated communities are being offered at multiple price points and payment plans that suit not just the rich but the middle class buyers as well. They offer condos (flats), townhouses and single-family homes on lot sizes ranging from 125 square yards to  2000 square yards. These communities are fueling a construction boom in Pakistan.

Defense Housing Authority (DHA), Bahria Town (Malik Riaz), Eden Housing (Aleem Khan…

Shanghai Bourse in Bid to Buy 40% Stake in Pakistan Stock Exchange

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The Shanghai Stock Exchange has submitted a letter of intent to buy up to 40% stake in the Pakistan Stock Exchange, according to  report in The Nikkei Asian Review.  The Shanghai Stock Exchange has the world's fourth largest market cap. The possible Pakistan tie-up could encourage Chinese companies to expand into the South Asian country and perhaps even list on the PSX.

In August this year, Bloomberg News reported Shanghai Electric's US$1.6 billion for 66% stake in K-Electric, Karachi's main electric utility.


Multinational Acquisitions in Pakistan: 

In July 2016, two multinational giants acquired 2 Pakistani companies as part of their growth strategy to establish presence in Pakistan.

Dutch dairy giant FrieslandCampina acquired 51 % of Karachi-based Engro Foods Limited, the second largest dairy producer in Pakistan.

In the same week in July, Turkey's Arcelik announced purchase of Dawlance, Pakistan's market-leading home appliance maker.

Both cited opportunity for do…