Keeping politics, economics beyond individuals and institution can help boost venture in the country
Interview with Syed Ali Raza Bukhari, CEO Vector Securities (Pvt) Limited
Syed Ali Raza Bukhari co-founded Vector Securities (Pvt) Limited. It is a stock brokerage firm registered with the Pakistan Stock Exchange under their code TREC-025. The firm provides multi-channel trading platforms to its clients; from research-based advisory and execution to a low-cost online trading platform.
PAGE: WHAT ARE YOUR VIEWS ABOUT 2018 IN TERMS OF BUSINESS ACTIVITIES IN PAKISTAN?
SYED ALI RAZA BUKHARI: There are two perspectives to analyze business activities in 2018.
First perspective: “We expect 2018 would be another year of economic growth due to CPEC & non-CPEC related investments. We will see continuous trickle-down effect of higher public and private expenditures in this year”. And second perspective is: “We call this a political perspective. Considering 2018 would be an election year and taking guidance from the historical trends, both federal and provincial governments announce various development and non-development schemes such as schemes related to incentivizing farmers, car schemes and youth loan schemes at provincial level etc. Due to this, we would certainly see acceleration in business activities.
PAGE: WHAT ARE YOUR SUGGESTIONS FOR A COMMON MAN ABOUT INVESTMENT IN 2018?
SYED ALI RAZA BUKHARI: We would like to break 2018 in two phases for investment purposes:
In first phase January 2018 till election conclusion would be very crucial phase for the stock market in particular. ‘We expect high volatility, mainly due to rising political activities, aggravating economic statistics due to higher non-development spending, at federal and provincial level. We suggest investment in high dividend yielding scrips. It will be wise to take a cautious approach during this period.” In the second phase “we call this post-election phase. During this phase we expect recovering investor confidence after settlement of political dust. We expect rising local and institutional contribution in the stock market during this phase. For investment, this could be a very lucrative time.”
PAGE: WHICH SECTORS OF ECONOMY ARE WEAKER AND WHICH ONE ARE STRONGER ACCORDING TO YOUR ANALYSIS?
SYED ALI RAZA BUKHARI: The manufacturing sector is now gaining pace with increased electricity availability that is allowing industries to operate at their optimal capacity. With demands rising, we see a host of new expansions/new investments being announced in various sectors, including cement, automobiles, food, consumer, electronics etc. Agricultural sector is unfortunately lagging behind as growth in farmer incomes has stalled since FY12 due to low international commodity prices.
PAGE: YOUR VIEWS ABOUT PERCEPTION OF PAKISTAN IN THE WORLD AND WHAT MUST BE DONE?
SYED ALI RAZA BUKHARI: Having relegated to an image of a war zone, perception of Pakistan has been on the rise during the last few years. Pakistan is now making positive appearances in the international media due to its robust and growing middle class. It is primarily because of relative economic turnaround coupled with investment opportunities that seem to be enticing for the international community. An increasing number of foreigners are now visiting Pakistan. Their first-hand experience with the ground situation is playing a massive role in improving Pakistan’s perception through word of mouth. However, there is still substantial room for improvement. We need our institutions to focus on enhancing the international visibility of our positive Pakistan.
PAGE: WHAT ARE YOUR SUGGESTIONS TO THE ECONOMIC MANAGERS TO BOOST INVESTMENT IN THE COUNTRY?
SYED ALI RAZA BUKHARI: Politics should be decoupled from economic policies and institutions should be strengthened. This will increase investor confidence and improve upon our stability and growth momentum. Perceived political risk in Pakistan is still very high and the recent episodes of Panama leaks and the government shakeup in its follow through, has not helped. Politics as well as economics should be beyond individuals and be institution-driven. This can play a major role in boosting investment in the country.