Reason - 1: Geo-strategic Location |
| Reason - 2: Trained Workforce A large part of the workforce is proficient in English, hardworking and intelligent. Pakistan possesses a large pool of trained and experienced engineers, bankers, lawyers and other professionals with many having substantial international experience. |
| Reason - 3: Economic Outlook Pakistan is one of the fastest growing economies of the world having touched a GDP growth rate of 8.4% in 2005. Today Pakistan has over 170 million consumers with an ever growing middle class. Foreign Direct investment has risen sharply from an average of $300 million in the 1990s to over $3.7 billion in 2008-09. Fiscal deficit has declined from an average 7% of GDP in the 1990s to around 3% in recent years. And FOREX reserves have increased from $3.22 billion in 2000-01 to $11.6 billion in June 2009. |
Reason - 4: Investment Policies Current investment policies have been tailor made to suit investor needs. Pakistan's policy trends have been consistent, with liberalization, de-regulation, privatisation, and facilitation being its foremost cornerstones. |
Reason - 5: Financial Markets The capital markets are being modernized, and reforms have resulted in development of improved infrastructure in the stock exchanges of the country. The Securities and Exchange Commission of Pakistan has improved the regulatory environment of the stock exchanges, corporate bond market and the leasing sector. Whilst the Federal Board of Revenue has facilitated structural reform in tax and tariffs and the State Bank of Pakistan has invigorated the banking sector into high returns on investment. |
Saturday, 10 October 2009
5 Key Reasons To Invest In Pakistan
Investment opportunities in Pakistan
Pakistan offered best investment opportunities both in forex trading and its 3 emerging stock markets operating under most regulated and protective atmosphere promising a good return to the investors.
This was the consensus of the speakers at a Seminar on "Investment opportunities in Pakistan" arranged by Harvest Group of Pakistan in Lahore on Saturday. Harvest Smartrend Securities (Pvt) Limited is a partnership between the Harvest Group of Pakistan and Smartrend International Limited of Hong Kong. Smartrend International Limited is a brokerage arm of Smartrend International Holdings Ltd, a BVI company with an authorized capital of US $ 10 million. The group maintains a wide range of operations in the field of providing financial services, including U.S. securities, forex and commodities trading to investors in the United States and the Asia-Pacific Region. Harvest Smartrend Securities Pvt Ltd. was registered as a corporate member of the Lahore Stock Exchange on October 3, 1999.
The 3 speakers associated with the Harvest Group explained in details to a large gathering of investors and stock dealers, economists and researchers the vast investment opportunities Pakistan offered to both domestic investors and the foreign investors and what important role Harvest was playing as a local brokerage house of international standard in harnessing these potentials by providing expert professional advise and research oriented guidance to its clients to ensure reasonable profits on their protected and safe investments. Harvest provided facilities to both the investors of the stock market as well as forex trading which has recently picked up in Pakistan. The seminar ended with the concluding remarks of Mohammad Gulraze Mir, Chairman and ECO of Harvest Topworld International (Pakistan).
The speakers pointed out that in recent years, emerging stock markets in developing countries have become an important and widely accepted investment tool. Characterized by ever-growing turnover and high potential returns these markets are known to have tremendous growth potentials. In fact, during the past decade, these markets have experienced considerable growth.
Emerging market
Pakistan being among the developing economies of the world has the benefit of holding the status of emerging markets i.e. The stock markets in Pakistan are classified as emerging stock markets. It is because of these wide range of advantages that Harvest Smartrend Securities (Pvt) Ltd. (HSS), a corporate member of Lahore Stock Exchange, offers investors an opportunity to capitalize on such markets.
Introducing the Harvest Group senior Marketing Manager, Mr. Kamran K. Megee said that the group had an international chain which comprised of the following companies, Harvest Topworth International, Harvest Smartrend Securities Pvt. Ltd, First Harvest (Texas) Inc., Harvestrade International Inc., Harvest Global Network Inc., Global Harvest Corp.
Harvest Smartland Securities Pvt Ltd (HSS) and Harvest Topworth (HTW) International are securities and forex brokerage arms of the Harvest operating in Pakistan. HTW is in fact the pioneer of forex brokerage in Pakistan with a largest set up with Hi-tech communication and information system. Speaking on securities in Pakistan. Ms. Humaira Jamil Research analyst said that investment in stock market of Pakistan was today much safer because of the various measures taken by the Securities and Exchange Corporation (SECP) which has assumed the role of real protector of investors. She recommended investment in Pakistan because of its emerging markets, enhanced and improved performance of capital markets during the past few years.
Mr. Akbar Hussain spoke on forex trading which according to him had tremendous potential. He disclosed that trading volume of forex was many time more than investment in share markets. The daily turnover of forex trading which was going on round the clock was about 2 trillion US dollars. The concept was comparatively new in Pakistan but was fast developing. He claimed that HTW of his group was developing forex trading in Pakistan on the most modern lines backed by Hi-tech communication and information system compiled by highly qualified and professional team of researchers.
Mr. Mir, in his concluding remarks explained the importance of forex trading in the growing capital market of Pakistan. He said Harvest Topworth International provides professional and efficient Spot Currency trading facilities and customized investment portfolios to sophisticated investors in Pakistan. In association with the Topworth Group and a worldwide network of investment companies, Harvest Topworth puts the largest global investment market within reach of the Pakistan investment community. Harvest Topworth International, work as a large professional team to serve the best interests of the investors. This is a continuous operation from 5:00 a.m. Monday morning Pakistani time when the Tokyo market opens, to 1:00 a.m. Saturday when the New York market closes. This is basically to protect the interests of the investors from the movement of the currency rates in the Forex Market in and outside the country.
Tuesday, 6 October 2009
Forex Terms With "G" to "I"
GTC (Good-till-Cancelled)
Refers to an order given by an investor to a dealer to buy or sell a security at a fixed price that is considered “good” until the investor cancels it.
Hedge/Hedging
Strategy to reduce the risk of adverse price movements on one's portfolio and to protect against the volatility of the market. Hedging typically involves selling the good forward or taking a position in a related security. Hedging becomes more prevalent with increased uncertainty about current market conditions.
High/Low
Refers to the daily traded high and low price.
I
Inflation
Refers to the increase in prices (price level) and wages over time that decrease purchasing power. It is calculated from changes in the price index, usually a consumer price index or a GDP deflator.
Initial Margin
The percentage of the price of a security that is required for the initial deposit to enter into a position. The Federal Reserve Board requires a minimum of 50% initial margin. For futures contracts, the market determines the initial margin.
Interbank Rate
The rate at which the major banks (Deutsche, Citibank, Bank of Tokyo) trade in foreign exchange.
Interest Parity
Theory that says that the difference in interest rates across countries should be equal to the difference between the forward and spot rate.
Interest-Rate Swaps
The process of changing the form of debts held by banks or companies, in which they trade debts/loans fixed rates for floating rates (or vice versa) in another country.
Interest-Rate Swap Points
The interest rate can be determined through the difference in the bid and offer price of an exchange rate. If you are looking at the EUR/USD exchange rate and the offer price is higher than the bid price, than Europe's interest rates are higher than US interest rates.
ISDA (International Swaps and Derivatives Association)
Organization defining the terms and conditions for trade in derivatives.
Forex Terms With "F"
FCM
See Futures Commission Merchant.
Federal Deposit Insurance Corporation
A regulatory agency of the created to oversee that bank deposits are insured against bank failures. It was created in 1933 to restore confidence in the banking system. It insures up to US $100,000 per banking institution.
Federal Reserve/Fed
The central bank of the United States, responsible for monetary policy.
Fixed Exchange Rate
When the exchange rate of a currency is not allowed to fluctuate against another, i.e. the exchange rate remains constant. Typically, under fixed exchange rate regimes, currencies are allowed to fluctuate within a small margin. Fixed exchange rate regimes require central bank intervention to maintain the fixed rate.
Fixed Interest Rate
An interest rate used for loans, mortgages and bonds that remain at the same rate throughout the period.
Flat/Square
To either have no positions or positions that cancel each other out.
Floating Rate Interest
An interest rate that is allowed to adjust with the market. The opposite of a fixed interest rate.
Foreign Exchange (Forex)
The buying and selling of currencies.
Foreign Currency Effect
Refers to how changes in the exchange rate affect the return on foreign investment.
Forward Contract
A deal in which the price for the future delivery of a commodity is set in advance of the delivery. The Forward rate is obtained by adding the margin to the spot rate. It is used to hedge against adverse fluctuations in the exchange rate that can affect amount of profit or loss at that future date.
Forward Points
Refers to the pips that were added to or subtracted from the current exchange rate to obtain the forward price/rate.
Future Rate Agreements (FRAs)
FRAs are agreements that are made that allow for borrowing and lending at a constant interest rate for a specified period in the future.
Front Office
Refers to the sales personnel (trading and other business personnel) in a financial company.
Fundamental Analysis
The analysis of economic indicators and political and current events that could effect the future direction of financial markets.
Futures Commission Merchant
A Futures Commission Merchant engages in futures and options transactions. An FCM has a role in the futures market that is similar to that of a broker in the securities market.
Futures (Financial Futures)
Future contracts that commit both sides to an exchange/transaction of financial instruments, currencies or commodities at a future date and a predetermined price. Future contracts are similar to forward contacts, but future contracts can be traded in the futures markets. Can be used to hedge or speculate against the value of the asset at the expiry date.
Forex Terms With "E"
Economic Indicator
An economic statistic used to indicate the overall health of an economy, such as GDP, unemployment rates, and trade balances. Used in fundamental analysis of foreign exchange markets to speculate against the direction of an exchange rate.
Efficient Markets
Markets where assets are traded in which the price is indicative of all current and relevant information and thus it is impossible to have undervalued assets.
End of the Day (Mark to Market)
Accounting measure, referring to the way traders record their positions. There are two ways that a trader can record his positions: the accrual system in which only cash flows are recorded and the mark to market method, in which the value of an asset is recorded at the end of each trading day at the closing rate or value.
Estimated Annual Income
The expected yearly earnings.
Euro
The new monetary unit of the European Monetary Union used by twelve countries in the European Union. It is now the legal tender of those countries as of January 2002. Those countries include Germany, France, Belgium, The Netherlands, Luxembourg, Spain, Portugal, Italy, Austria, Ireland, Finland and Greece.
European Central Bank
The central bank of the EMU, responsible for the monetary policy of all member countries.
European Monetary Union
An institution of the EU, whose primary goal is to establish a single currency (the euro) for the entire EU.
Economic Exposure
When the cash flow of a country is vulnerable to changes in the exchange rate.
Forex Terms With "D"
Day Trading
Refers to the process of entering and closing out trades within the same day or trading session.
Dealer
One who places the order to buy or sell. A dealer differs from an agent in that it takes ownership of the asset, and thereby is exposed to some risk.
Deficit
An excess of liabilities over assets, of losses over profits, or of expenditure over income.
Delivery
Term used to describe the exchange by both parties (buyer and seller) of the traded currency.
Deposit
Refers to the process of borrowing and lending money. The deposit rate is the rate at which money can be borrowed or lent.
Depreciation
The decline in the value of an asset or currency.
Derivative
A security derived from another and whose value is dependent the underlying security from which it is derived. Examples of derivatives are future contracts, forward contracts and options. Underlying securities can include stocks, bonds or currencies. Derivatives can be traded and are usually used to hedge portfolio risk.
Devaluation
When the value of a currency is lowered against the other, i.e. it takes more units of the domestic currency to purchase a foreign currency. This differs from depreciation in that depreciation occurs through changes in demand in the foreign exchange market, whereas devaluation typically arises from government policy. A currency is usually devalued to improve the balance of trade, as exports become cheaper for the rest of the world and imports more expensive to domestic consumers.
Dirty Float (Managed Float)
An exchange rate system in which the currency is not pegged, but is “managed” by the central bank to prevent extreme fluctuations in the exchange rate. The exchange rate is managed through changes in the interest rate to attract/detract capital flows or through the buying and selling of the currency. This system is contrasted with a Pure Float in which there is no central bank intervention and the exchange rate is entirely determined by the market and speculation.
Forex Terms With "C"
Cable
Term used to describe the exchange rate between the US dollar and the British Pound.
Candlestick Chart
Chart depicting the daily high, low, opening and closing price, similar to that of a bar chart. If the close is lower than the open than the body of the candlestick is filled in, and if the open is lower than the close the body is left empty.
Capital Markets
Markets in which capital (stocks, bonds, etc.) are traded. Usually for medium or long term investing.
Carry Trade
An investment position of buying a higher yielding currency with the capital of a lower yielding currency to gain an interest rate differential.
Central Bank
A banking organization, usually independent of government, responsible for implementing a country's monetary policy and for printing money.
Chartist
Refers to a technical analyst or one who analyses charts/graphs and data to uncover potential trends.
Clearing
Refers to the settlements/confirmations of trades.
Close a Position (Position Squaring)
Refers to getting rid of a position, either by buying back a short position or selling a long position.
Commission
A fee charged by broker or agent for carrying out transactions/orders.
Confirmation
A written document verifying the completion of a trade/transaction to include such things as date, fees or commissions, settlement terms and the price.
Contagion
Term used to describe the spread of economic crises from one country's market to other countries within close geographic proximity. This term was first used following the Asian Financial Crisis in 1997, which began in and soon spread to other East Asian economies. It now is used to refer to the recent crisis in and its effects on other Latin American countries.
Contract (Unit or Lot)
The standard trading unit on certain exchanges. A standard lot in the forex market is $100,000.
Convertible Currency
Currencies that can be exchanged for other currencies or gold.
Cost of Carry
When an investor borrows money to sustain a position. There is a cost for borrowing derived from the interest parity condition, which is used to determine the forward price.
Counterparty
A participant, either a person or an institution, involved in one side of a financial transaction. With such transaction there is an associated risk (counterparty risk) involved that the counterparty will not be able to meet the terms outlined in the contract. This risk is usually default risk.
Country Risk
The risk that a government might default on its financial commitments/contracts, which typically causes harms to other areas of the financial sector, as well as those in other countries.
Cover on a Bounce
A recommendation to exit trades on a bounce out of a support level.
Cover on Approach
A recommendation to exit trades for profit on approach to a support level.
Credit Checking
Before making a large financial transaction, it imperative to check whether the counterparty has enough available credit to carryout/honor the transaction. Credit checking refers to the process of verifying that counterparty has enough credit. The check is initiated after the price has been determined.
Credit Netting
Agreements that are made to avoid having to continually recheck credit, usually established between large banks and trading institutions.
Cross Rate
Refers to the exchange rate between two countries' currencies. Cross rates usually refer to pairs quoted that do not include the domestic currency. For example, in the US, the EUR/JPY rate would be called a cross rate.
Currency
Notes and coins issued by the central bank or government, serving as legal tender for trade.
Currency Pair
Currencies are quoted in pairs, such as EUR/USD or USD/JPY. The first listed currency is known as the base currency, while the second is called the counter or quote currency. The base currency is the "basis" for the buy or the sell. For example, if you BUY EUR/USD you have bought euros and simultaneously sold dollars. You would do so in expectation that the euro will appreciate (increase in value) relative to the US dollar.
Currency (Exchange Rate) Risk
Risk associated with drastic changes/fluctuations in exchange rates in which one could incur a major loss.
Forex Terms "B"
Back Testing
The process of designing a trading strategy based on historical data. It is then applied to fresh data to see if and how well the strategy works. Most technical analysis is tested with this approach
Balance/Account Balance
The net value of an account.
Balance of Payments
A record of all transactions made by one particular country with others during a certain time period. It compares the amount of economic transactions between a country and all other countries. This includes trade balance, foreign investments, and investments by foreigners.
Balance of Trade
Net flow of goods (exports minus its imports) between two countries.
Bank for International Settlements
The BIS is an international organization fostering the cooperation of central banks and international financial institutions. Essentially, the BIS, located in Basel, is a central bank for central banks. It monitors and collects data on international banking activity and promulgates rules concerning international bank regulation.
Back Office
Refers to the administrative arm of financial service companies, who carry out and confirm financial transactions. Duties include accounting, settlements, clearances, regulatory compliance and record maintenance.
Balance of Payments
Record of all transactions, such as trade balances and capital flows, carried out by a county with the rest of the world within a certain period.
Base Currency
In general terms, the base currency is the currency in which an investor or issuer maintains its book of accounts. In the FX markets, the US Dollar is normally considered the 'base' currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. The primary exceptions to this rule are the British Pound, the Euro and the Australian Dollar.
Basis
The difference between the cash price and the futures price.
Basis Point
Measure of a bond's yield equal to 1/100th. A 1% change in yield is equal to 100 basis points and 0.01% is equal to one basis point.
Bear
Investor acting on the belief that prices or the market will decline.
Bear Market
Any market that exhibits a declining trend. In the long run they have a down turn of 20% or more.
Bid
The price an investor is willing to pay for an asset.
Bid/Ask Spread
The difference between the bid and the ask price.
Big Figure
Refers to the first number to the left of the decimal point in an exchange rate quote, which changes so infrequently that dealers often omit them in quotes.
Bonds
Bonds are debt instruments used to raise capital, which are issued for periods greater than one year. Bondholders are loaning money (investing in debt) to companies and governments, at the end of which they will be paid a specified interest rate. Bond prices are inversely related to interest rates, as interest rates rise, bond prices fall. There are numerous types of bonds, including treasury bonds, notes, and bills; municipal bonds and corporate bonds.
Book
Recording of the total positions held by a trader or desk.
Bretton Woods Accord (1944)
This accord established a fixed exchange rate regime, whose aim was to provide stability in the world economy after the Great Depression and the WWII. This accord fixed the exchange rates of major currencies to the US dollar and set the price of gold to $35. The accord required central bank intervention to maintain the fixed exchange rates. The US Central Bank was required to exchange dollars for gold, which eventually let to the demise of this system, when the demand for the dollar declined, as well as the gold reserves, forcing Nixon to stop the exchange of dollars for gold, effectively ending the system in 1971.
Broker
Individual or firm acting as an intermediary to bring together buyers and sellers typically for a commission or fee.
Bull
Investor who expects markets or prices to rise.
Bull Market
A market where prices are rising or are expected to rise.
Bundesbank
Germany's Central Bank.
Buy a bounce
A recommendation to instigate a long trade if the price bounces from a certain level.
Buy break
A recommendation to buy the currency pair if it breaks the current level specified.
Buy stops above
A recommendation to enter the market when the exchange rate breaks through a specific level. The client placing a stop entry order believes that when the market's momentum breaks through a specified level, the rate will continue in that direction.
Forex Terms "A"
Account
A record of transactions of goods and services owed to one person by another.
Agent
An intermediary or person hired to carry out transactions on behalf of another person.
Aggregate Demand
Total demand in an economy, consisting of government spending, private/consumer and business investment.
All or None
Refers to requests for a broker to fill an order completely at a predetermined price or not at all. Refers to both buy and sell orders.
American Option
An option that can be exercised anytime during its life. The majority of exchange-traded options are American.
Anonymous Trading
Visible bids and offers on the market without the identity of the bidder and seller being revealed. Anonymous trades allow the high profile investors to execute transactions without the scrutiny and speculation of the market.
Appreciation
An increase in the value of a currency in response to market demand.
Arbitrage
When a price differential arises, creating an opportunity to profit through buying and selling. Arbitrage is a "riskless" opportunity to profit, as there is no uncertainty involved. In regards to the foreign exchange market, arbitrage arises when a profit can be made through differentials in exchange rates. Arbitrage opportunities in the foreign exchange market are rare.
Asian Option
An option whose payoff depends on the average price of the underlying asset over a certain period of time. These types of option contracts are attractive because they tend to cost less than regular American options
Ask Rate
The lowest price that shares will be offered for sale, such as the bid/ask spread in the foreign exchange market.
Ask Size
The number of shares a seller is willing to sell at his/her ask rate.
Asset Allocation
The diversification of one's assets into different sectors, such as real estate, stocks, bonds, and forex, to optimize growth potential and minimize risk.
Asset Swap
An interest rate swap used to alter the cash flow characteristics of an institution's assets in order to provide a better match with its liabilities.
Attorney in Fact
A person given the right or authority to act on behalf of another to carryout business transactions and implement documents.
Automatic Exercise
A procedure implemented to protect an option holder where the Option Clearing Corporation will automatically exercise an "in the money" option for the holder.
Away From the Market
When the bid on an order is lower (or the ask price is higher) than the current market price for the security.
Commonly Used Language
In Currency Trading, traders often use technical language that can be intimidating when you're just starting out. When you see a word you don't understand, you should refer to this page. As you familiarize yourself with the language, you'll find that your understanding of Forex concepts as a whole will improve.
In next Posts I tell you the terms and their meaning commonly used in forex .
Why Currency Trading Is Not For Everyone
Why Trade Currencies?
Forex is the world's largest market. With about 3.2 trillion US dollars in daily volume and 24-hour market action, we believe it is a true "step above" the equities market for the serious trader. Some key differences are:
1 - Many firms don't charge commissions – you pay only the bid/ask spreads.
2 - There's 24 hour trading – you dictate when to trade and how to trade.
3 - You can trade on leverage, but this can magnify potential gains and losses.
4 - You can focus on picking from a few currencies rather then from 5000 stocks.
5 - Forex is accessible – you don’t need a lot of money to get started.
Who Forex Works
Example of a Forex Trade:
The EUR/USD rate represents the number of US Dollars one Euro can purchase. If you believe that the Euro will increase in value against the US Dollar, you will buy Euros with US Dollars. If the exchange rate rises, you will sell the Euros back, making a profit. Please keep in mind that forex trading involves a high risk of loss
Yen bolstered Investers Risk
The yen rose against the euro and dollar on Friday, as investors move from riskier currencies after a stream of bad US economic data. Things may get worse for the greenback later today as key US employment data is released, and if poor may accelerate the yen’s gains.
The yen saw a gain of 0.2% against the dollar during trading, finishing at 89.44 yen, within reach of the eight month high of 88.23 yen hit during Monday’s trading. The euro also took a substantial dip to 129.65 yen before recovering, ending the session 0.2% down at 130.05 yen.
