How Pakistan’s stock market weathered the European Debt crisis

Pakistan stands out amongst its peers as the only country to have positive cash inflows during the European debt crisis.

This is at a time when all the other countries, like Korea, India, Turkey and the Philippines, witnessed massive outflows and global capital markets witnessed huge sell-offs.

According to JS Global Capital, these countries’ currencies went down to the crisis. The euro is down 8.3 per cent, the South Korean won is down 11.6 per cent, the Indian rupee and Turkish lira lost 6.3 per cent and the Philippines peso declined 4.6 per cent.

During the crisis, foreigners invested $23 million in Pakistan’s capital market from the beginning of the month until now. The rupee went down by very little, a mere 1.3 per cent, according to JS Global Capital analysts.

Companies like the Hub Power Company, Fauji Fertiliser, Pakistan Petroleum and Fauji Fertiliser Bin Qasim showed very small decreases in their price relative to the rest of the market.

Pakistan’s stock market offers a dividend yield of nine per cent for the forecast of the fiscal year 2011 as compared to the average regional stock market yield of 3.2 per cent, said JS Global Capital analyst Junaid Iqbal.