SEATTLE — Pakistan has officially re-entered into emerging market status. For the past eight years, the country has been considered a frontier market after it dropped from emerging market status in 2008.
The difference between Pakistan’s former to current emerging market status is that Pakistan has consistently progressed toward an advanced market. The country is presenting liquidity in local debt, equity markets and economic growth.
Some investors seek emerging markets for the prospect of high returns due to the fact that emerging markets often experience faster economic growth as measured by GDP. If investors do decide to take a risk and invest in Pakistan’s emerging market, the payoff in Pakistan will be tremendous.
Pakistan’s finance Minister, Ishaq Dar, has classified Pakistan’s re-entry into emerging market status as historic. Dar believes that this advancement could bring $475 million into the stock market.
The business community of Pakistan is also very thrilled by this change. Pakistan’s economy has only gone up by 4.7 percent, but its stock market has risen by about 15 percent, according to The News International.
The return to an emerging market after eight years has resulted in a sharp and abrupt climb of stocks and has strengthened hopes of large-scale foreign investors’ interests for the near future, said Mian Zahid Hussain, a Pakistani mayor and businessman. Hussain also credits Dar for helping Pakistan return to an emerging market.
Dar is currently trying to increase the power of the regulator in order to keep the dishonest broker mafia at bay, which, in return, would help to secure confidence to foreign investors looking to invest in Pakistan.
According to The World Bank, poverty in Pakistan has greatly decreased in recent years. The World Bank also projects that Pakistan’s GDP growth is expected to continue at a steady incline over the next few years.
Economic growth, coupled with an increase in the number of people escaping poverty, Pakistan’s transition from a frontier market to an emerging market will save and improve the lives of thousands.
– Bella Chaffey