Pak economy at focal point of int’l investors

Amanullah Khan

Karachi—Despite security challenges purposely fabricated by Anti-Pakistan elements, the economic growth of Pakistan hovering at eight year high with a 42 year low interest rate (5.75pc) and multi-decade low inflation.
This was all possible to achieve on the back of, greatly improved macro environment, delivery of various macro targets including materialisation of revenue target in Financial Year 2016 i.e. Rs3.104 trillion, up 20pc YoY, continued build-up in foreign exchange reserves (above-$22billion or 6-month cover), while according to another report foreign exchanges reserves have crossed $23 billion for the first time in country’s history, delivery of federal development spending target up 47pc YoY without any material slippage in fiscal deficit 4.3pc of GDP in FY2016, acknowledged by financial wizards.
According to them Pakistan is clearly on foreign investor’s radar screen with two important deals coming to fruition over the last week. One of them is related to foreign direct investment into Pakistan with FrieslandCampina has announced acquisition of 51pc stake in Engro Foods Ltd, Pakistan’s second largest dairy producer for $466mn while Arcelik has announced acquisition of Dawlance Ltd, Pakistan’s largest player in consumer appliances for $258mn (reported at 6.4x EV/EBITDA).
The latest developments add to similar trend in energy, cement and telecom sectors and clearly demonstrate attractive underlying industry fundamentals, friendly policy backdrop for foreign investors and reasonable asset pricing.

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