The Pakistan Stock Exchange has been on downward spiral in last two years. It shed one third of its value since May 2017. The benchmark index touched three year low in second week of April. The retail investors lost has lost one third of their total savings in last two years and the downfall of PSE continues. The cement and steel companies has been hit severely as the work on China Pakistan Economic Corridor slows down. The value of Pioneer Cement share receded to 29 rupees (Pakistani currency) from 71 rupees a year ago. International Steel is down to 61 rupees from 122 a year ago.
The experts and investors are asking the government to rescue the stock market through bailout purchase but the Pakistani government is as poor as its citizens. Imran is running around the world with a begging bowl to save the country from loan defaults. The benchmark index touched three year low of 36,579 in the second week of April which is almost one third lower compared to 53,124 it reached on May 25, 2017. The market has lost almost 3 lakh crore Pakistani rupees in the last two years and reached 7.5 lakh crore from 10.5 lakh crore.
As of February 2018, the total market capitalization of Pakistan is 84 billion dollars compared to 2.1 trillion of India. Therefore the market capitalization of India is almost 25 times more than that of Pakistan. The Indian stock market is the seventh largest in the world behind US, China, Japan, Hong Kong, United Kingdom, and France.
Foreign Direct Investment (FDI) in the country touched a six month low of 132.2 million dollars in January 2019. This is a 59 percent drop from the 319.2 billion dollars received in the previous month, reported the State Bank of Pakistan. In the first seven months of the fiscal year 19 (the Pakistani fiscal year is from July to June), FDI dropped by 18 percent to 1.45 billion dollar compared to 1.76 billion dollar in the same period of the previous fiscal year.
The FDI received by Pakistan last year is around 3 billion dollars. In an average year, India attracts 10 to 20 times more FDI than its western neighbor. In the fiscal year 2017-18, at least four Indian states (Maharashtra, Karnataka, Delhi and Tamil Nadu) received more FDI than Pakistan. Maharashtra received 11 billion dollars in FDI which is almost four times that of Pakistan. Karnataka received around 7.7 billion dollars which is two and a half times the amount invested by foreign entities in Pakistan. Delhi received 7 billion dollars in the fiscal year 2017-18, more than double of the amount received by Pakistan. Tamil Nadu attracted FDI almost equal (3.08 billion dollars) to that of Pakistan’s.
The economy of the country is in doldrums. The GDP growth of Pakistan is estimated to be to hit nine-year low in the ongoing fiscal year (July-June). India on the other hand is fastest growing economy in the world with estimated rate of 7.3 percent in the current fiscal year.