May The Force Be With You. #StockMarkets #Iran #Pakistan #UNResolution

Last week we discussed Egypt’s and Turkey’s stock market activity and promised that we would discuss the stock markets in other populous countries, like Iran and Pakistan, in the MENA region before the new year.  We are discussing Iran because we are curious to see the impact on its other markets due to the easing of economic sanctions.  The joint US and EU decision of easing sanctions is seen as a positive result of the Iran Deal reached in 2015-2016.

Further to their economic news, Iran also participated in the global economic shake–not the Harlem Shake– as an OPEC member: for this first time since the height of the 2008 financial crisis—OPEC cut its oil production in November.

Also, we are discussing Iran’s neighboring trade partner Pakistan, because the Pakistan Stock Market  (KSE100) hit a record trading high this past December: 47806.97 points.  This represents how Pakistan’s KSE100 grew 40 percent in 2016, according to Forbes.

Tehran Stock Exchange

Iran’s sanctions ease was one of the top five economic shocks in 2016.  Now, Iran has the opportunity to regain lost revenue from oil exports by $10 billion in the coming year.  Also, the US has removed sanctions on Iran’s banking sector, according to the US Office of Foreign Assets Control.

Iran’s central bank says lifting banking sanctions would allow $30 billion of foreign reserves currently frozen in accounts around the world to be brought back.~Economic Times

As a result, in large part, the Tehran Stock Exchange reported growth.
In addition, an Iranian media corporation Donya-e-Eqtesad established a stock market information service called Donya-e-Bourseon.  The service’s founder, Ali Reza Bakhtiari, stated that the service will “promote the free market, competitiveness and openness.” As such, one of the sections will feature a weekly survey of market trend predictions by investors and analysts.
Nonetheless, inflation remains high: Iranian currency stands at 1 USD = 32,368.34 IRR.
Internal trading options opened up too.  On December 18th, Iran introduced the Single Stock option Contracts.  The first day resulted in more than 15,000 trading contracts.

Pakistan Stock Market

As you may know, Pakistan has held a free floating currency exchange since 2000.  It’s been a big year for Pakistan’s money markets and its overall macro-economic development.  Like Turkey’s growth in GDP, Pakistan has seen about 6 percent growth.  Other good news: Pakistan’s inflation rate (now at 4%) is out of double digits range– a situation that heavily mirrored higher food prices in the last part of the 20th century and continued until 2012. This has not been without the support of the World Bank’s 1 billion dollar package.

The Pakistan Stock Market (KSE100) was previously known as the Karachi Stock Exchange to track the top 100 companies earning across each of its 34 sectors.  Since the closing of the first quarter, the KSE100 has been climbing each day in the last nine months.  Perhaps, that is why during last summer, financial markets assessor, MSCI, recategorized Pakistan as an “Emerging Market”.  This was an upgrade shared by economies like Brazil, China, and Russia.

For 2017, however, a rise in oil prices could disrupt this rising growth in the KSE100 since Pakistan has doubled its imports of oil.

The usual suspects that haunt frontier and emerging markets: inflation, corruption, and revolution. Not always in the same order.~ Panos Mourdoukoutas, Forbes Contributor

Pakistani consumers must remain wary of inflationary prices; corruption and revolution are another discussion–their discussion as citizens.

New Year’s Resolutions

PITAPOLICY has two new years resolutions.:

  1. Emulate Anne Frank’s method of tracking her crisis–The Diary of Anne Frank–in World War II Europe and apply to documenting Syrians tweets.  Tweets are testimonials documenting the Syria Crisis and impact on children.  I will begin this post on the first day of 2017, and update as pita-consumers tweet @PITAPOLICY back with their observations on the ground.  Documentation means we can never forget. Ever.
  2. Have hope. We know it may be below expectations of many when continuous resolutions regarding Palestine do not get a “Yes” in support of their self-determination from the U.S.  However, last week’s “Abstain” from the U.S. at the UN Security Council was historic: for the first time in 40 years, the U.S. did not veto a UNSEC resolution (introduced by the only Arab member of the Security Council).  In the Obama administration’s last attempt at Mideast engagement, Secretary John Kerry targeted the illegal settlements, as summed up by international human rights lawyer, and Palestinian-American, Noura Erekat: And the problem is not Palestine. And Kerry said it today in his speech: the settlements do not increase Israelis security.”

“The status quo is leading towards one state and perpetual occupation, but most of the public either ignores it or has given up hope that anything can be done to change it. And with this passive resignation, the problem only gets worse, the risks get greater and the choices are narrowed.”~U.S. Secretary of State John Kerry [Full transcript of speech here.]

Pitaconsumers: please share with us yours–whether they be hopes for economic development, human development, or your country’s development.  Tell it to the universe because declaring your intent is the first step towards tracking the goal; tracking the goal is the step towards making something better.  Making something better is WHY we are here.  May the Force Be With You.

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Filed under Analysis, Interests, PIDE (Policy, International Development & Economics), Politics

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