Pakistan rising while Indian growth spammed with hypes: Morgan Stanley

Pakistan rising while Indian growth spammed with hypes: Morgan Stanley
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ISLAMABAD: Investors should forget India and instead profit from the ‘quiet rise’ of Pakistan along with Sri Lanka and Bangladesh, Barron’s Asia said.

In an article, America’s financial magazine advised investors where profit is to be had through stock investments.

It pitched Pakistan , Sri Lanka and Bangladesh as the places to be, saying the trio is enjoying fast-paced growth, embracing reforms and look set to enjoy a demographic dividend over the long term.

“Forget India . Investors looking for the next big thing should look to its South Asia neighbors instead – Pakistan , Bangladesh and Sri Lanka,” Barron’s Asia said.

According to the article, the three countries with a combined 390 million people represent what Morgan Stanley chief global strategist Ruchir Sharma calls “the quiet rise of South Asia” as opposed to India which has been “flattered by spasms of hype for years”.

“A substantially higher economic growth rate than in many other economies globally, coupled with fantastic demographics that will continue supporting growth for many years ahead,” East Capital fund manager Adrian Pop told Barron’s Asia.

The article mentions that Pakistan is the flag-bearer of positive changes taking place in the South Asian nations.

Inflation is under control, the budget deficit has been reduced and, more importantly, terrorism finally appears to be on the back-foot, given more assertive action by the army.

This along with Chinese investment in the transportation and energy sectors will be crucial to higher growth.

“More power capacity is key for Pakistan to move to an even higher economic growth rate,” said Pop. In December, the Pakistan Stock Exchange sold 40 percent stake to a consortium of Chinese investors.

The Karachi stock index is up by about 50 percent since the start of last year, propelled by index compiler MSCI’s decision to bump up the country to the emerging markets status.

Bangladesh benefits from a growing working age population and rising labor costs elsewhere in Asia. Garment manufacturing for western clothing companies has increasingly moved from China to places like Bangladesh, where wages are lower.

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