DHAHRAN, Sept 28: With a vastly improved and stable investment climate, a number

of foreign investors, especially from Saudi Arabia and the Gulf are now exploring ventures in Pakistan, Arif Habib of Arif Habib Securities Limited told a select gathering of Pakistani professionals here on Tuesday.

Already the Al-Tuwairki Group of Dammam is proceeding ahead with the setting up of a steel plant in Karachi at a cost of $250 million. They are also seeking investments in other sectors of industry and real estate development in various places in Pakistan. The local Al-Tamimi Group is also proceeding ahead with a $250 million real estate development project in Islamabad.

The local Globe Marine Services is also pursuing the stevedoring contract at the upcoming Gwadar port. Another local company, was also pursuing a major investment in Pakistan, Pakistan’s Honorary Investment Counsellor in Dhahran Ismat Amin Khawja told the gathering.

Arif Habib told the Pakistani professionals that the decision of the UAE based Etisalat to buy 26 per cent stakes in the PTCL at a price of $2.6 billion had given a major boost to foreign investment and the overall privatization process. This would help attract more foreign investment in Pakistan and would reduce the trade deficit, he asserted.

Discussing the impact on the economy of the improved investment climate, Mr Fawad of Fatima Group of Pakistan stressed that the industrial activities in the country had picked up considerably. “Even the local investors are returning back to Pakistan and there is a negative cash outflow these days.”

Some major Pakistani investors have brought back their investments from abroad so as to capitalize on the encouraging scenario.

“Three new cement plants are coming up, more investment into the fertilizer sector is being witnessed, the number of cars and motorcycles manufacturing has gone up considerably and is in fact unable to pace with the demand growth currently and the textile sector is witnessing a major boom.

“Consequently managers and skilled manpower are in demand and their pay scales have seen significant improvements over the last few years,” both Mr Habib and Mr Fawad asserted.

The Karachi Stock Exchange which was roughly at 1,200 points level in 1998 has now grown by almost 6-7 times and is currently trading at around 8,000 mark, indicating the strength of the Pakistani economy. The foreign exchange reserves now are sufficient to finance imports for eight months now, whereas hardly a few years back, it was enough for 12 days only.

Those who invested in Pakistan were benefiting out of it, Mr Arif stressed. The Karachi Stock Exchange has outperformed many other markets and is in fact one of the most lucrative in the world today.

Referring to some of the challenges faced by the Pakistan economy today, Arif Habib pointed out inflation as a major cause of concern. Rising oil prices are also a big drain on the emerging economies like Pakistan but he felt the country was in a much better shape currently to sustain these challenges.