KARACHI, Jan 10: The recent disaster in the South Asian and Far Eastern countries due to tsunami waves in the Indian Ocean was unable to shake confidence of investors in world equity markets, including that of Asia.
Muhammad Owais, head of research at First National Equities Limited, stated that markets (particularly Asian markets) all around the word were in a recovery phase these days due to declining oil prices, strengthening the world economic growth prospects for the year 2005. For the same reason, overall growth throughout the world was expected to be well above the average growth rate of past 18 years.
The analyst said that the KSE-100 index had outperformed major world indices in December by a large difference in anticipation of very strong earnings growth (for HY'05) in major sectors of the economy. Such indices included Dow Jones (US); FTSE-100 (UK); KLSE (Malaysia); Straits (Singapore) Hang Seng (Hong Kong) and CAC-40 (France).
Also Pakistan was said to be entering in a high growth phase where the government was foreseeing a GDP growth rate of above 7 per cent in FY'05 and 8.0 per cent in the medium-term which was well above economic growth prospects for most of the developing world for FY'05.
The medium-term trajectory for domestic economic growth seemed to stand on solid foundations, said the analyst, because of expected large scale expansion programmes in major industries as well as the government's focus on the agriculture sector which was a vital part of the economy.
"The government's policy of limiting the role of discretionary powers or deregulation and privatization is also promising greater investment opportunities for both local and foreign investors in the medium-term", the analyst reckoned, and added that prime examples were the telecom and oil exploration sectors attracting the record foreign investment in recent days.
But the analyst concluded that notwithstanding the good performance of country's equity markets as compared to the regional markets, on the back of robust overall economic outlook, market corrections here, for short time spans could not be ruled out.
