ISLAMABAD: With a benchmark index that has gained 16 percent in the last 12 months Pakistan has been among the world’s top 10 performers according to a recent Bloomberg report.
The report highlighted improvements in Pakistan’s economic
performance in terms of trade, investment, industry, inflation,
construction growth to name a few, during the Nawaz Sharif led PMLN government.
The report noted that Prime Minister Sharif – who took power in
May 2013 – has boosted infrastructure spending by 27 percent to Rs.
1.5 trillion for the fiscal year starting from July 1.
Pakistan was making significant progress in meeting targets
under its 6.6 billion loan program the International Monetary
Fund said in May.
The lender predicted a 4.5 percent growth in the economy in
the year starting July 1 following a 4.1 percent expansion last
fiscal year the report added.
According to the report easing prices are also set to buoy
consumer spending. Inflation in South Asia s second largest economy
slowed each month this year through April as transport and food
prices fell prompting the central bank to cut the benchmark
interest rate in May to the lowest level in 42 years.
It said Moody’s Investors Service upgraded Pakistan’s
sovereign credit ratings for the first time since 2008 in June but
said stalling the ongoing IMF program or an unstable political
environment would be credit negative.
The report noted that China was standing by Pakistan as the
nation’s long time strategic ally.
In April, Asia s largest economy, China signed deals for $28
billion of investments in Pakistan as part of a planned $45 billion
economic corridor that includes power plants and dams.
The development in cities and smaller towns is trickling down
and is good news for smaller contractors as well the report said.
“Business has been very good and there s no doubt my work has
tripled in five years,” the Bloomberg report quoted Mohammed Hassan
Bakshi 43 a builder in Karachi. There s huge demand
from the middle class for affordable housing.
Builders in Pakistan are seeking technology from China to help
cut down construction and project execution times to as little as
six months from as long as five years he said.
The nation s construction sector grew by 11.3 percent in the
year through June 2014 almost double the 5.7 percent target
according to central bank data.
Pakistan is a reform story like neighboring India s but only
better said Renaissance’s Robertson.
All of this is a big change on 2013 he said. Credit rating
agencies are beginning to recognize this.
According to the report the construction boom also marks the
nation s emergence as a frontier market after Prime Minister Nawaz
Sharif averted a balance of payments crisis with help from the
International Monetary Fund and resumed selling stakes in state
He (Nawaz Sharif) is boosting infrastructure spending as the
$232 billion economy expands at the fastest pace since 2008 amid
the cheapest borrowing costs in 42 years it said.
It is the best undiscovered investment opportunity in
emerging or frontier markets said Charlie Robertson London based
chief economist at Renaissance Capital Ltd.
What’s changed is the delivery of reforms privatization
an improved fiscal picture and good relations with the IMF.
D.G. Khan Cement Co. controlled by billionaire Mian Muhammad
Mansha and Cherat Cement Co. have announced expansion plans while
steelmakers are selling shares.
Amreli Steels Ltd. the nation s biggest maker of steel bars
used in construction is planning a share sale to help double
capacity. Mughal Iron & Steel Industries Ltd. completed an initial
public offering in April.
Pakistan’s cement industry has rallied 57 percent in the past
year more than triple the gains by the benchmark according to data
compiled by Bloomberg.
D.G. Khan Cement the third largest maker of the construction
material has jumped 62 percent and Maple Leaf Cement Factory Ltd.
has surged 161 percent and Fauji Cement Co. Ltd. has gained 81
The construction industry is seeing a boom and there is
still juice left in the cement rally said Mir Muhammad Ali chief
executive officer of UBL Fund Managers Ltd. that handles about 56
billion rupees ($550 million) in stocks and bonds in Karachi.