I will appreciate if any1 answer following question regarding Pakistani Stocks.
1] What Form of effeciency Pakistan's stock markets reflect ? I mean whether
it is weak, strong or semi strong.
2] What are Badla Rates and Badl Qty. ?
3] What is Carry over Transaction [COT]
4] What is the Avg Rate of Returns on Pakistani Stocks ?
5] were there any instances of default by brokers in the past and is there any auditing requirements by SECP on brokers.?
I think you can have such information by visiting stock exchange web site. Try KSE or LSE web site
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Hi Meer!
Tell me a bit more about where you are working (is it a brokerage house, investment management firm, or a fund). Your questions are interesting but need time to answer them. See if you can find an answer on the web sites suggested by Opheletas. If not we will do something about them
Take Care
Edited by - Pervez on Sep 29 2003 40608 PM
Hi pervaiz
I am in u.a.e., working in an investment co, I have develop an interest in pakistani stock due to brilliant performance of the KSE during last year.
Luckily , I have found a brokerage house site , and more interestingly it provides online trading facilities as well, I am stunned with the performance of some of the stocks particularly, the HUBCO, its share was being traded at 12.50 in previous september and in the middle of july it jumped to 47.00 and despite the bearish trends in the market it is at 37.55 , I do not know whether they have given any interim dividend to the shareholder but just look at the capital gains (37.55 - 12.50) = 25.0 PKRs which means the people who have invested just before 1 year have tripled their wealth.
Mr. Pervaiz do you know of any investment ( excluding investment in poppy crops) which can yield such returns
There is some problem with KSE website , but i have found two Websites
http://www.akdsecurities.net
http://www.investcapital.com
Hi meer!
I am very glad to hear that you are doing well. I wouldn't like to brag about myself, but just for records, the current M.D. of KSE Mr Moin Fudda is a classmate of mine. We did Inter Comm together. I was, incidently, a position holder in that exam. However, i can assure you i don't have any insider knowledge about stocks listed on KSE.
Feel free to contact me on my e-mail address,i am currently in North America, we might have common interests to discuss.
Take Care
Edited by - Pervez on Sep 30 2003 035933 AM
hi meer
i dont have such credentials as mr pervaiz, but i would like to add my penny to the discussion...
the kse is a good market... not a "strong form of efficient market" ... maybe not even a "semi-strong" form... because as i have seen, inside information can get you higher yields... but, nevertheless it is still not as manupulated as many ppl seem to think.
that said i would also like to add that the last year was a <b>once in a life time opportunity</b>. most sensible people will tell you not to expect that sort of returns any time again soon. despite that i am still bullish for the market. with a 12% to 15% return with a long term horizon.
please note that these are personal opinions, without any research basis.
oh and about me, i am with a mutual fund.
Farhan Ali
Hi Farhan!
Please don't believe in my credentials so whole-heartedly. I tend to exaggerate about them!!!
It is good to see articulate young man like yourself expressing their views on public forums like this one. I can almost smell the potentials for your success!!! Just a few simple questions
1) Are these 12-15% returns after-tax or pre-tax returns? Are these exclusively capital gains or a composite of gains and dividends?
2)What sort of time horizon are we looking at I mean minimum holding period?
3)Are you aware of any mutual fund that tracks KSE-100 index. I don't know if this is formally recognized as an index and if one can trade it on KSE board?
I am just a casual observer of KSE. I am myself skeptical about last years' gains. I don't believe the p/e multiples of some of these stocks are realistic? Gee! you must be wondering why so many questions on first date!! Don't worry you will get use to the inquisitive nature of fellows at this board. But over-all we are a nice bunch of good hearted accountants!!!
Thnks and take care!!
Edited by - Pervez on Oct 02 2003 050508 AM
Mr. Pervaiz
Today when I logged on to this forum and reviewed my post from last night, it dawned on me that my post could have been taken as a satirical. If it did offend you, I am sorry. I sincerely did not mean to be that way.
With that cleared from my conscience, I will try answer your questions.
<b> 1) Are these 12-15% returns after-tax or pre-tax returns? Are these exclusively capital gains or a composite of gains and dividends? </b>
As you must know, Pakistan has no capital gains tax. The dividends are taxed. We canât say if this will continue in the future. Prime Minister Jamali has extended the tax exemption to capital gains till 2010(I donât remember the year accurately). Will it continue after that? Well, my guess is good as yours. So, to be on the safe side I would say that these figures should be considered before tax.
<b>2) What sort of time horizon are we looking at I mean minimum holding period?</b>
These return projections are long run, 5 to 10 years and more. But we must also consider the historical uncertainties in mind (political, economic etc.). That is why in the shorter run these returns might not realize. But being an optimist, I think everything will work out fine with us.
<b>3) Are you aware of any mutual fund that tracks KSE-100 index. I don't know if this is formally recognized as an index and if one can trade it on KSE board?</b>
I donât understand this question. Do you mean that any Mutual fund has a high correlation with the KSE100 index?
To my knowledge there are 40 open ended mutual funds that can be traded on KSE board. Other than that there are 5 closed ended mutual funds.
I may have missed a few, but roughly these are the figures.
I am no accountant, but my intrests and profession is deeply related to accounts. So I also have the same traits, nice and goodhearted. <img src=icon_smile.gif border=0 align=middle>
Hi Farhan!
Not at all, i didn't get offended in any way by your post. Just to let you prepare for such eventuality, "satirical" on this board means out right abusive ( but in a lighter vein).
1) Yes i am aware that capital gains are tax free in Pakistan. A big plus when compared with North America. Up untill recently, 3/4 of capital gains were taxable. Tax on dividends paid by individual is considered double taxation, for corporation has already paid taxes on these amounts. Mr Bush has passed a law reducing inclusion of dividends in income. But it has a sun set clause, make it a temporary measure. That is why i was wondering if any dividends were included in your projected returns. I also noticed that quite a few of the companies in Pakistan pay dividends on regular basis. This brings a fixed income nature to those stock investments.
2) In my question 3, what i mean was any mutual fund replicating the composition of KSE-100 (same stocks and same percentage). You can say if the fund is indexed to KSE-100. As you may know, S&P 500 is a bench mark for many fund managers. So if you want to buy such indexed fund, you can invest in all 500 of S&P-500 stocks without the expense and trouble. S&P-500 is traded as a contract in future markets and a synthetic version of it SPYDER is available as ordinary stock.
In my opinion, there is hardly any profession in the world (including the oldest one!!) that is not related to accounting. Some may say how it is related to religion. Strangely, the double entry accounting was invented by a catholic priest in Rome!!!!
Nice talking to you, we will be in touch.
hi pervaiz
just a few missed points.
1) my projections included dividend and capital gains.
2) to my knowledge, there is no fund indexed to the KSE.
nice talking to you too.. see you around.
Farhan Ali
Tuesday, was a nightmare market crashed losing 139 point, and interestingly National Bank was offering a new share issue at a discount rate of 46.15 to general public throug its own branches, market rate was 47.00, but unfortnately market crashed next day and the share in the market went down to 45.00, I knew that they are not going to see this IPO failed and Investment dept of national would trade heavily in order to raise the share price so i brought a couple of thousand shares at 45.00 and right now it is being traded at 48.85/- and once this IPO is finished and new shares hit the market it would go back to the same 45.00