We will, we will, ROCK you!

Posted by Ramla Akhtar on 09 March 2005

I want to share an achievement with you. Here's the story:

Harvard Business School's South Asian Business Association (SABA) was in for a surprise. At their Second Annual Conference on India and Its Neighbors (emphasis added), what they didn't realize was that Pakistan will present itself as not a marginalized "neighbor," but a country with potential for business, a country with its unique identity. I got the opp to assist on the presentation the True Potential of South Asian Consumer Markets. With the help of links found on PakPositive, advice of friends from the marketing world, and a discussion about our own brand & other PK brands' achievements and challenges in Pakistan, we told the HBS community that Pakistan does not just live under the economic shadows of its neighbors. It is a country with unique challenges and opportunities. Do not underestimate. Pay attention!

The conference focused on marketing to the mid & lower strata of the society. The challenges are:
  1. Lack of access to and from the lower socio-economic classes
  2. Communication issues: language barriers. Fewer roads.
  3. Religious sensibilities: a unique challenge
  4. Lack of indigenous business research (Universities and corporations: pay attention!)
  5. MBAs are urban educated; incongruence between the rest of the nation and the highly educated persons (Some economists debate this.)

Some of the opportunities identified:

  1. Brands can make first moves into an unorganized market
  2. Growth in the telecom and transportation sector and technology presents not just market opportunities, but also brings cultural change in the society.
  3. Masses = volume. And volumes establish market leadership. Brings in economies of scale.
  4. TV will help the advertisers target fine-tuned markets rather than general masses.
  5. Cell phones as empowerment of the masses
Finally: Pakistan and India are as similar as any two HBS grads, one male & the other female, with the same age and education profile. The demographics may be the same, but the psychographics are not! Take-away: Pakistan has a massive potential. And it can no longer be remote-controlled from MidEast or India. Bring the investment on!

Stargazer said: -
Ok let me see if I can add in some of humble informed opinion to this cocktail... ;-)

A couple of days ago, on the 10th of March to be specific, there was a press release following Mr. Moin Fudda's visit to USA, from which I quote this excerpt: "New York Stock Exchange Chairman and Chief Executive, Hon Thain said that achievement of $40 Billion Market Capitalization by Karachi Stock Exchange KSE) is a significant value for an emerging capital Market..."

Now let me ask you a plain question: our national reserves are like around US $10-15 bln tops, right? Does our economy look like a $40 bln economy to you? If our market capitalization stands at $40 bln, where are all the new manufacturing units? The companies? The factories? $40 bln is an astronomical amount.

Point 2: Let me connect some more dots for you on the economic checkerboard. As we all know the main horses causing the KSE-100 index to shoot past 10K are OGDC, PTCL and maybe a handful of other companies, right? About half a dozen at best? In terms of %, these companies easily provide 70-75% of the index's thrust based on raw trading volume. Now translate this into the market capitalization quoted above. So what you're effectively saying is that we have a market capitalization of around $26-30 bln in just these 4-5 companies: OGDC, PTCL and some others?

The bottom line is that the effort here by the powers-that-be is for good intentions and for our benefit as a nation, and they deserve all the credit for that and our support. HOWEVER, small, private investors should be very careful in investing their bucks because this is very much an artifically created bubble for certain strategic purposes. Otherwise I can very confidently tell you that an economy with a market capitalization of $40 bln looks a whole lot more different than this. I agree that there are signs of growing businesses, new telecom companies, new services companies, and new opportunities are definitely being created because of the govt.'s good policies, etc. but the numbers on market capital are smoke and mirrors being generated through the recirculation of money.

One should not make the same mistake that millions of people made in the West when the dot-com bubble burst half a decade ago. Out of greed and false hopes of gargantuan returns, millions of people put their entire life savings into the stock markets...then watched them go up in smoke in days and could do nothing but despair and agonize. Paupers turned into princes and then back into paupers again within no time.

Definitely make money on this wave, invest and reap rewards, BUT don't go overboard. Play with what you can risk safely, what you can spare, not what your greed compels you to do.

As for the market capitalization quote, it is the KSE website at www.kse.com.pk.


(latest on top)

Ramla A. said: Ramla A.'s Website
Aye, some serious analysis of the roll is in order. No one wants to be the party-pooper, and therefore launch a panic movement. But there have been subdued news of caution being taken. Investigations about possible insider trading, etc. have come aorund.

A few things to note:
* Laws and norms about insider trading need to be enforced seriously. All the parties must have clear instructions about the same.
* It is being said that index growth is being driven by speculation. I differ. There may be many not-very-informed small investors in the market who have fuzzy info, but overall the growth in the KSE index is corresponding with real growth and investment in the economy. The uninformed opinion is not necessarily a speculation.
* It is time for informed opinions, not just wishing that KSE-100 would rocket; or fearing that it might collapse.
* Avoid FEAR and GREED.
Stargazer said: -
Does thy house stand upon hay or bricks? Remember all the glitters is not gold; tread with caution. :-)
Henna Arshad said: Henna Arshad's Website
**Clap, clap, clap**

Triple thumbs up to you Ramla for this timely and ecstatic entry of KSE's bumper achievement.

well just last month we have crossed the psychological bareer of 7Ks...and now VIOLA**10Ks**...BUT now the real challange is to keep up the trend and the rising curve...it is really healthy for Pakistan and ya positivity in bizz sector..gud for catching-in investment...

What about PPL shares...if anybody?? their rates are going on top!!

Another angle...if anybody have noticed..the international media's promotion towards India's robust economy --cozz India is eying the UN and G7 seat in future--on Uncle SAM's backing of-cource...this milestone is really timely and much needed.........OH I AM SHOWING a POLITIKAL TONE..well nothing could be complete without politiks, with due apologies...:-))
Ramla A. said: Ramla A.'s Website
Why, oh why, had I not bought OGDC?? Why not even yesterday?! They are leading the curve.
Oil, gas, and cement leading the market.
Adeem Maqsood Basraa said: -
Thats gr8 .. and i hope it will go up and up (inshALLAH).

What is Specials?

Specially written for Pak Positive by invitation, Specials are contributed posts aiming to live up to the Pak Positive blurb: Simple Pakistani views - without religious, political or military tones.

Previous Specials


© PakPositive.com
Privacy Policy

Other PakPositive websites you might find interesting

Pakistan on the Map

Pakistani Bloggers

Pakistan Web Search

Pakistan Photos

Guest Posts