Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
INVESTING IN HIGH RISK TECH STOCKS - ALL OR NOTHING - 16th May 21
Is Stock Market Selling Madness About Over? - 16th May 21
Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
Budgies Birds of Paradise Indoor Grape Vine Singing, Chirping and Flying Parakeets Fun 3D VR180 UK - 16th May 21
Wall Street Roiled by Hot Inflation Data: Is This REALLY “Transitory”? - 16th May 21
Inflation Going Stag - 16th May 21
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Pakistan Value and Growth Investment Opportunity,A Contrarian Investor’s Paradise

Stock-Markets / Pakistan Jul 13, 2010 - 04:55 PM GMT

By: Submissions

Stock-Markets

Best Financial Markets Analysis ArticleBMA write:

  • Pakistan offers a unique investment opportunity given its geographical location
  • Lowest cost land route to Central Asian countries
  • Location advantage promoting infrastructure development
  • Pakistan has the potential to become one of Asia’s premier trade, energy and transport corridor

Pakistan’s Growth Theme

  • GDP growth – Projected at 4.5% in FY11 as the LSM sector continues to recover
  • Demographics – 55% of the population is under the age of 19, which bodes well for aggregate demand
  • Infrastructure – Investments to ease power and housing shortages will drive future growth
  • Location – Strategically placed to become Asia’s premier trade, energy and transport corridor

Pakistan Stock Market Theme

  • One of the best performing markets in the world over the last 12 years: Investing USD 100 after Pakistan went nuclear would have outperformed BRIC markets and gold
  • KSE100 is amongst a handful of markets that are positive in CY10
  • Sustained growth in company fundamentals – Cement, Banks, Auto, Energy and Fertilizer
  • Valuations are trading at large discounts to the region
  • Domestic capital inflows continue to underpin market performance – Foreign funds now own 30% of the free float
  • Future outlook for Pakistan’s Stock Market is bullish

BMA Pakistan Opportunities Fund

  • Unique opportunity for international investors to take exposure to Pakistan’s growth story
  • The first open end fund for Pakistan which is US $ denominated and listed on a European exchange
  • Outperformance against MSCI Pakistan
  • Portfolio strategy focus on value and growth stocks

GDP / Capita (US$ PPP Based) growing at ~ 6% p.a for 10 yrs

Nominal per capita income currently stands at PKR79,896 (US$ 1,040), yet Pakistan’s GDP per capita, when adjusted for PPP stands at US$ 2,538 – according to WB (~0.3% of the world economy)

Pakistan’s nominal GDP grew by CAGR of 17% for last 10 years to reach PKR15,203bn (US$ 179bn), yet on a PPP basis, Pakistan will achieve the a GDP on a PPP basis of over US$700 bn by 2015.

Despite international political disputes and internal structural issues, Pakistan has posted strong growth over the recent decade. A high degree of economic resilience, foreign investment and focused pro-investment policies during this period helped average over 5.0% GDP growth

Market Cap / GDP PPP – Pakistan has the most room for growth 


Pakistan has the lowest Market Cap / GDP PPP out of a wide selection of countries, Pakistan has the most potential to grow

Buying Pakistan in Times of Pessimism – Post Nuclear to 2010

12 years later, a comparative price performance in US$ terms highlights that any investor who invested in Pakistan at the time of maximum pessimism, would have gained by over 60% in US Dollar terms and done better than any other asset class. Investing for the long term in times of pessimism is perhaps the best strategy for Pakistan

12 Year Performance Comparison of Different Asset Classes put Pakistan at the top. The table above shows a comparison of different asset classes from October, 1998 to 30 June, 2010

Investing US$ 100 in Pakistan after the fallout from the nuclear blasts would have outperformed everything else in your portfolio, including BRIC, MSCI India and Gold.

A similar opportunity is now approaching!

What about the future? Wave Count Suggests New Highs

Whilst few investors would have bought Pakistan after it went nuclear, we believe, the latter part of 2010 or early 2011 will again offer a similar opportunity

Just like in the late 1990s few will spot the opportunity and buy a market that has all the ingredients of a bull market, the contrarian investor will take the decision to enter during times of pessimism and remain invested from a long term perspective.

BMA Pakistan Opportunities Fund Fact Card - II

BMA Group: BMA was founded in 1991 and is currently a leading financial services group in Pakistan. The Group has four main areas of focus including Asset Management, Stock Brokerage, Corporate Finance and Financial Products Distribution. As a firm, BMA has participated in landmark privatization transactions and is to date the No. 1 advisor on Government of Pakistan Privatizations. BMA Capital has the distinction of having worked Co-Lead Manager with world class organizations like Goldman Sachs, Citigroup, JPMorgan and Credit Suisse. BMA is also one of the leading providers of world class brokerage services to international broker dealers and fund managers who have investment programs in Pakistan. The shareholders of BMA include Abraaj Capital, a leading Private Equity Firm based in UAE and focused on the MENASA region and its Founding Partners.

BMA Funds: The Asset Management business, BMA Funds, is a separate legal entity, and is a licensed asset manager by the Securities and Exchange Commission of Pakistan. The firm manages a total of US$ 100m in the domestic equity and bond markets and is a market leader in providing institutional asset management to some of the leading public and private sector corporate Retirement Funds including Pakistan State Oil, ICI Pakistan Limited, GlaxoSmithKline, Pakistan National Shipping Corporation, Indus Motors (Toyota’s Local Joint Venture Partner) and Pakistan Human Development Fund. BMA Funds is rated by Japan Credit Rating Agency in Pakistan in the AM2 Category for Management Quality Rating. The Rating Scale is from AM1 to AM5, and this is the highest category attained by a Pakistani Asset Management company.

Fund Manager and Team: Muddassar Malik, Co-Founder, CEO and Executive Vice Chairman, heads the Pakistani investment team consisting of a Chief Investment Officer, three fund managers and two research associates. Muddassar Malik, CEO has experience of 20 years in Pakistan’s capital markets. He holds an MBA from MIT Sloan School of Management and B.Sc (Hons) Economics from the

London School of Economics. Iffat Mankani, CIO has over 10 years of experience in research and fund management having managed over US$ 1 bn in her previous roles. She holds a MBA from the Institute of Business Administration, Pakistan. Farrukh Hussain, Fund Manager has had over 15 years of experience in managing equity funds for a private family office. He has an excellent understanding of markets in Pakistan and holds an MBA from the University of East Manila, Philippines. Bilal Khan, Fund Manager has over 7 years of experience in Pakistan and specializes in technical analysis and market strategy. He holds an MBA from the Lahore School of Economics, Pakistan.

Management Style: At 30 June, 2006, POF’s portfolio consisted of over 20 names and the top 10 concentration was at 65%. As at 30 June, 2010, POF’s portfolio was concentrated in 13 names and the top 10 concentration was very high at 85%. This shift in concentration represents the change in conviction style of management which focuses on high quality companies in Pakistan, with strong growth prospects. Both absolute and growth criteria are used to identify stocks. Stocks are purchased on a 2 year view and managed actively for volatility. The Fund adopts a core and tactical approach to its management whereby, the core portfolio is looking at long term fundamental factors for buying and selling stocks. For example, price should represent a discount of at least 25% to fair value, companies should represent sustainable earnings, cash-flows and ROE’s. The tactical portfolio is more active in its decision making and will take more aggressive positions with respect to cash in periods of uncertainty.

Performance Analysis: Against a backdrop of a turbulent economic environment, the fund has managed to post a return of +65.8% during the last 18 months since 1 January 2009 to 30 June 2010. During this period, the MSCI Pakistan Index has shown a movement of +76.2% . POF ranks 5th amongst its peers over the last 18 months period and 1st over the last 12 months. POF also ranks comfortably in the top quartile over the last 2 years.  The recent 18 month performance has been possible by adopting a value and growth oriented investment approach with greater bias to large cap, liquid stocks. Under the new management style, stock selection has been the prime driver of performance, helped by an active asset allocation strategy between the core and tactical portion of the overall portfolio. The cash component has varied between 0% to a high of 30%.

Risk Management: Risk is controlled pragmatically with usually no more than 30% invested in any particular sector and not more than 20% invested in one single stock. Currently, over 90% of the portfolio is invested in large caps. The key decision makers are responsible for risk management and the Fund also has a risk compliance officer who is in daily / weekly contact with the Fund Administrator to ensure that risk compliance parameters are being met. Risk is measured through the Sharpe Ratio. In order to mitigate the currency risk, the Fund takes an approach to invest in those sectors which are devaluation positive in the medium term and hence is able to provide a zero cost economic hedge to the Fund.

BMA Funds: Contact Persons 

Muddassar M. Malik mmm@bmafunds.com

Iffat Mankani iffat.mankani@bmafunds.com

Bilal Khan bilal.khan@bmafunds.com

General Email pakfunds@bmafunds.com

© 2010 Copyright BMA CAPITAL - All Rights Reserved
Disclaimer

This presentation is for market research purposes only. It is not an offer of securities and must not be construed as an offer to sell or an invitation to subscribe to any securities or other financial products in any jurisdiction or country. Investment in BMA Pakistan Opportunities Fund can only be made by completing an application form attached to the appropriate offer document. Information contained in this document is not intended to be securities or financial product advice and should not be relied upon as such. The repayment of an investment in and the performance of funds managed by BMA Asset Management Limited is not guaranteed by BMA Asset Management Limited, any organisation or any person. The potential investment is subject to investment risk, including possible delays in repayment and loss of income and principal invested. Past performance is not indicative of or a guarantee of future results. This presentation is intended as a general outline only and is not a definitive statement on the subject matter.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Mustafa Pasha
14 Jul 10, 23:46
Information arbitrage

Very interesting presentation, which has shed new light on the abundance of opportunities available in Pakistan. Valuations especially seem to be very attractive and i think are a result of the information arbitrage, where investors are averse to taking exposure in the Pakistani market. I hear that the Karachi stock exchange is one of Mark Mobius's favorite markets. I read somewhere that the KSE100 is trading at a 50% discount to the region, that indicates significant upside!


adil siddiqui
09 Feb 11, 17:50
investing in pakistan

this is a great performing market, all fundamentals are in its favour. what are the best stock picks


Post Comment

Only logged in users are allowed to post comments. Register/ Log in