‘Investment in Pakistan remains a risky but profitable prospect’

Karachi
Pakistani stock options may be inexpensive but their returns remain higher in comparison with international markets, according to leading investment strategist David Darst.
The renowned economist and author, who served as managing director and chief investment strategist at Morgan Stanley Wealth Management for nearly two decades, made this observation in a lecture titled “The Global Economic Environment: Where’s The Global Capital Going?” at the Aga Khan University on Tuesday.
Darst was of the view that the global economy, especially that of the United States, had been focused on short-term quantitative easing instead of aiming for long-term investment.
He said stocks in Pakistan yielded only five percent but gave more than 10 percent in returns, remarking that this was among one of the manifold aspects of the country’s economic potential. This was also why, added Darst, foreign remittance coming into the country via its expatriates remained one of the economic pillars of Pakistan.
However, he said that Pakistan too needed to focus on long-term measures, for which, its youth would be a driving force. He predicted that the overall global economy would rise by 3.6 percent, while the rate of economic appreciation in Pakistan may be around 4.5 percent. The highest inflation, according to Darst, would be witnessed in Latin America, especially Brazil, Venezuela and Argentina. The major global players, he added, would be Apple, Facebook, Alibaba, Google and Amazon.
Economically, said Darst, the past year had been shaped by the Crimea invasion and Ukraine crisis, drop in oil prices, the rise of ISIL and slowing economic growth in Europe, China and Japan.
This year’s progress, he said, will be shaped by the death of Saudi Arabia’s King Abdullah, quantitative easing of the European Central Bank, raising interest rates in the US and the policies of Prime Minister Shinzo Abe in Japan.
Moreover, said Darst, political developments in the Middle East, China and Japan would also have an impact on the global economic landscape.
In his presentation during the lecture, Darst hailed the 20 female US senators whose timely negotiation had recently prevented the government from defaulting on debts.
The 18th century, said Darst, had been shaped by the abolition of totalitarian monarchy and its epitome had been the public hanging of King Louis the XVI in France. The 19th century, he said, had been marked by the abolition of slavery, while the 20th century had been shaped by the abolition of totalitarian systems – Fascism and Communism – epitomised by the suicides of Adolf Hitler and Joseph Stalin.
This century, Darst believed, will be one for women. “They will now give men a tough time and make them revise some of the stubborn decisions they have made. For now, women will be the ones shaping the world,” he said.