August 24, 2020 (MLN): Pakistan continues to remain an unpopular foreign investment destination because of its image perception, a fact that has been consistently and repeatedly confirmed by the stats published by the State Bank of Pakistan.
The same was reiterated by the Founder and Chief Investment Officer at Tundra Fonder, Mattias Martinsson, who in his latest series of tweets, made comparisons between Vietnam and Pakistan in terms of their potential to attract foreign investment.
Mattias Martinsson said that both the countries followed the same trajectory until late 2016 but have since diverged. He further noted that foreigners have been net sellers in Pakistan for almost 6 years now.
‘To some extent, it is Vietnam that has done very well (export-led growth, improved transparency). Pakistan has obviously gone through a major crisis during the last 3-4 years. But it is also perception driven – Fear of instability. Pakistan continues to have an image problem’, he further said while explaining the reason behind the sudden deviation.
When asked by one of the twitter users if the reason behind divergence was attributable to correlation between net sellers and rupee depreciation, Mattias agreed by stating that Currency risk is the first question any foreigner will ask about (right or wrong).
Addressing a tweet that pointed out the possibility of a reversal coming up soon as shown by the graph, he said that he hoped the same. However, he asserted that trade is far from crowded right now.
‘Foreigners will come back but, as always, they will be late’, he added.
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