Pak continues to beat Indian, Chinese valuation over long duration
ISLAMABAD: Last September, the Global X MSCI Pakistan ETF was up 20%, beating India and China’s comparable ETF’s by almost two to one though Pakistan continues to beat both Chinese and Indian equities over longer periods of time, Forbes reported on Wednesday.
As per Yahoo, Finance and Karachi Exchange as of May 9, 2016, Global X MSCI Pakistan (NYSE : Pak), 12 months performance was 20 % while 5 year performance was 332% (KSE Index in PKR), whereas iShares China (NYSE:FXI) recorded 9.80 % and 16 % respectively and iShares S&P India 50 (NASDAQ: INDY) registered 12.77 % and 33.0 % respectively. iShares MSCI emerging Markets (NYSE:EEM) performed merely 5.38 % and 1.52 % during the period.
Index/Fund 12-month Performance 5-year Performance Global X MSCI Pakistan (NYSE:PAK) 20% 332%* IShares China (NYSE:FXI) 9.80% 16.00% iShares S&P India 50 (NASDAQ:INDY) 12.77% 33.0%
iShares MSCI Emerging Markets (NYSE:EEM) 5.38% 1.52%
To begin with, Pakistan’s recent numbers may be just a normal pullback of a long bull market. Then, there is domestic and international terrorism, which is beginning to catch up with the real economy. Then too, there is a growing Chinese presence that threatens to leave the country heavily indebted like Sri Lanka and pit Islamabad against Washington.
There is the “big picture”, the key macroeconomic metrics. Like GDP growth rates and unemployment, where Pakistan lags behind both India and China. Moreover, deterioration in inflation, current account deficit, and external debt are other factors which may impact upon the business decisions of the foreign investors.
India’s equity markets have been on fire so far this year, outperforming the neighboring Chinese and Pakistani markets by a big margin.IShares S&P India 50 has gained 18.32 percent in 2017, compared to a 10.23 percent gain in iShares China Large Cap, and a 1.94 percent loss in Global X MSCI Pakistan.
Pakistan’s, India’s and China’s Key Metrics Country China India Pakistan GDP $10866 billion 2074 billion $270 billion GDP Growth yoy 6.7% 7.1% 4.24% Unemployment 4.05% 4.9% 5.9% Inflation Rate 1.3% 5.05% 3.56% Capital flows -594 HML -$300 million -$1882 million Government Debt to GDP 43.9% 67.2% 64.8% Frontier and emerging markets are highly volatile, with one year’s big winners turning into next year’s big losers. Hype should never be a substitute for due diligence, the Forbes advised.