Bullish or bearish?

Dr. Hassnain Javed

October 28, 2018

 

 

 

Investing is always like watching paint dry or either grass grow. It is foolish to provide an exact answer to the time and number of market bottom or a market top. Many before and many after will always play in the market on hit and trial methodology. Some of the individual’s hits went wrong while on the flip side some were successful in their trails. But, it actually explains the science that there is no existence of exactness but there are somewhat chances to reach near it.

From the global perspective, the Russian market has started to go down and it provides the impression to investors that it is cheap and thus rapidly start investing in it. But, unfortunately it went down further. Investors thought it is a signal of a bearish trend and took it as an indication of being cheap. This series of trend continued until it became a pain in the neck and gave minor heart attacks to the participants, as it kept declining. This eventually led people to sell, and it ultimately caused the market to go decline further. Likewise, the Philippines market has also experienced a somewhat similar trend last month. The series and pattern was similar until the market dropped by 18 percent.

Besides this, focusing on our own markets and identifying and critically analyzing what are the good elements of the market is difficult to answer especially if you are institutional investors and sitting outside the periphery. There are a diverse range of answers to the above stated question. Indeed, the price of the stocks, or value of the index was never, and will never be a base indicator signalling when and where to invest in the market. In my view, this is least important variable to be taken when making the investing decisions in the foreign markets. In reality not even a single index is ever expensive or either cheap. If stock revenues are falling or either stock is being traded at half, market sentiments are somewhat blur or either overall market is suffering a downward dive, they can be some amongst the many reasons.

Today, I am not giving historical evidence or either numerical argument, but indeed providing a logical explanation that Pakistan’s stock market is operational beyond number the game and on facts rather than emotions. If we inspect closely on ground reasons of why the market goes up or drastically goes down, it will provides us with a better reason of how, what and why it happens.
In the recent times, most of the people from the Pakistani economy are not only of the view, but indeed closely associate political instability as the cause for the stock market crash. Now, if you really think this is the only reason that has caused the market to go down from 54,000 to 36,000, then one has to think again. Now, political instability is again one of the variables that could cause the market to get lower pace but if you say that it is the only factor then that is wrong.

In actuality, the accumulation of the weak economic situation, acts as an inflection point for the complete scenario. Whenever, there is political instability the stock market undergoes a bearish trend and provides a reason to buy more as the market goes down, and to wait till the market gets better. This is the global phenomena practiced but considerably not effective in our economy. Because, our market is continuously showing a downward trend. Every other day we wake up, our economy is served with news of a current account deficit, sometimes budget deficit or either deteriorating reserves with no positive or negative effects from emerging markets.

Besides this, our economy has declining exports, rising rates of imports and inflation, high amount of debt to repay and no significant implications for stock market in the budget. Indeed, it is stocked up with conditional IMF conditions and high fluctuations in the currency. Moreover, there are many oil companies with humongous percentage of market capitalization, who are trapped with circular debt. Moreover, the statements released by America are an additional threat which hurts our economic future.

Since the past many years, Pakistan’s economy is suffering from all of the above mentioned diseases, and up till now there is no medicine invented by our practitioners to permanently cure it. So far not even a single cause has shown a positive signal, indeed it is getting worse day by day. In such a scenario we cannot really say that Pakistan’s Stock Market is acting bullish or bearish. It might get some bounces from the market but cannot pick up a smooth pace until and unless there is concrete positive news about the market and not fake rumours.

In conclusion, Pakistan’s Stock Market can play a significant role in the local and international economy with economic, social and political stability. It requires a firm ground to play and win. Therefore, for sensible investors it is time to wait and watch carefully before they dive into the swimming pool.

Knock knock to nation not IMF!

Dr. Hassnain Javed

October 19, 2018

 

 

 

After the forming of the new government we can hear the rising echoes of hike in gas, energy and petrol prices. The subsidies are also shrinking and the cheery on top of all these crises; the International Monetary Fund (IMF) program for Pakistan, is also around the corner. Since 2014, petrol prices have sky-rocketed reaching an astounding figure of $83 a barrel. As also discussed in my previous articles, Pakistan’s economy has attached high hopes with the new government and the ringing bells of economic crises, are a clear indication that the nation will once again, become deprived of the failing hopes and expectations.

As it all signals the traditional knocking by the government to the IMF once again. I believe to keep up the high spirits, government needs to define the rapid action plan for which it is not necessary, to knock at donor agencies doorstep once again. All in all, we don’t need funds from IMF anyway. Indeed we require visiting the IMF program when the economy is an immediate need of USD 18 billion whereas as off now Pakistan only in need of USD 4 billion. For that matter, we can issue bonds, sell stocks in the local currency, issue bonds in the stock exchange — these are means which have hardly been ever used by our government.

Now, as we are about to knock the IMF door once again, it has already started reflecting in the rupee devaluation. Based on historic evidence from third world countries, all who have taken to IMF programs have suffered from highly volatile currency.
Moreover, it will also sweep into the accelerating energy and gas prices. Upon closer inspection, Pakistan has rising import bills and as per my calculation we are currently only left with a mind boggling 15 day cash balance for import cover. Besides this, Pakistan has recently operationalised the metro buses in Lahore, Islamabad and Multan and to keep up with their operations it requires 20 billion annually, whereas 300 billion alone was spent on its construction. It is an indication that the government has to allocate some subsides for this sector as well. But, in reality the bigger challenge for the government is to save the country as a whole and devise policies and framework which can provide cushion for the larger spectrum rather than just providing support to orange lines and metro buses.

I believe the government should design policies in a way that allocate subsidies, but in smaller chunks and in multiple phases, for the upcoming years for all the projects in which hefty economy money has been injected by the previous government.
Likewise, the theory of form/ideas by Plato should be applied in which not only the government is solely providing the subsidies, in fact the authorities should also be held liable, for managing these ventures in a way that it tremendously improves, the daily passenger count. For that purpose, there should be proper passenger travel route plans, to provide them with maximum facilitation and ease of mobility. It will aid in generating revenue that can ultimately make the institution strong enough to cover up their own expenses, rather than becoming dependent on government for subsidies and its operations. If we closely look into the circular debt then its root causes are the subsidies provided by the government. All the former and new government take positive initiatives and launch programs to make Pakistan, a better Pakistan but such projects suffer from a major lag that is dependence.

Actually Pakistan is not suffering from circular debt rather suffering from circular subsidy. It is taking energy at higher prices and selling off at lower prices. This all indicates that we are suffering from absolute economic mismanagement. So far there no plan has been proposed by our state Finance Minister, to address the primary concerns. Thus I am of view that there should be a press conference held on the state of the economy, or either Prime Minister should address the whole nation and narrate with facts and figures, all the economic ills Pakistan is currently suffering from. Moreover PTI needs to streamline the stage of tumour, which could either be treated with high dosage of advanced treatment or could be left to break and fragment. It should be followed by the address of Finance Minister which provides apt and viable solutions after the diagnosis. The high debt burden, subsidies, corrupt institutes and ills of the previous government, are something we are all aware of. We need to take immediate action and form a comprehensive plan.

Economic leaders should propose remedies for eradicating the IMF trap. How will subsides be fought so far there is no policy statement issue on broadening the income tax bracket. By now, if no rapid action is taken then our economy will also suffer from economic meltdowns similar to Venezuela, Argentina and Jordon. It will ultimately lead to economic strike and society gathering for basic necessities rather than political sittings for fair trails and transparency. Similar to other developed economies, our government and economic leaders, have to unite the entire Pakistan under one umbrella to fight with the poisonous bacteria spreading in our society at high speed and work towards the welfare of the country. Collaborative approach and design is most feasible rather than one man beating his head.

Sufi life and shrine reforms

Dr. Hassnain Javed

October 08, 2018

 

 

 

Since the advent of this universe, the changes in this universe bear witness to the fact that there are periods of ups and downs, eruptions’ and disruptions’, sorrow and relief, success and failure of time where all scientific inventions and research are being safeguarded in the depths of this world. This universe is also aware of how many civilizations have been germinated in its soil, sprouted into seedlings, grew as beautiful fruit laden trees and later went extinct.

It leads question in human mind that why the Creator has given birth to this universe and for what purpose has he created this earth and human? This law of action and reaction with associated movements and consequences has been beautifully explained by Holy Prophet (SAW) in these words: “This world is the land of cultivation for the Hereafter”.

At this stage, human physical body and its pure soul needs affiliation to revert back to its Creator where the state of law of nature is balanced. This affiliation was acquired from Sufi saints, glorified soul, holy beings and the chosen one in the path of the Creator. Sufi is the one who embraces the philosophy and practices which aim at direct communion between the Creator and man. Sufism is the divine knowledge bestowed by the Creator upon a selected few for the benefit of humanity.

They neither propagate nor impose the positive or negative image of religion. Sufi gatherings act as the celebration of diversity and pluralism. They are the voice of peace, co-existence, compassion, equality which is a call for universal brotherhood. These gatherings primarily focus on creating a psychological balance between moral values and ethics through the following three principles.

Firstly, they aim at creating equality by bridging the gap between have and have’s not in the society, by ensuring everyone have the equal share and distribution of the basic necessities. No rich is superior over any poor, no white is favoured over a black. Secondly, providing social rehabilitation through the sharing of ideas to educate an individual with morals and love rather than sermons.
It is a very meaningful ideology as those who believe in humanity they will ultimately aim at building human civilisation on love not on hatred. Love is the weapon that leads to tolerance and demolishes all movements based on extremism and exclusive truth. Because one who loves all of humanity will always adopt an inclusive approach and feels that truth cannot be the monopoly of some exclusive group.

Lastly, these Sufi saints listen and act as modern day psychologists, as an invisible teacher to relax and guide the depressed individual. All of these three principles sum up in creating a conquest of happiness in the depressed, rejected, deprived souls and physical bodies of the society at worse of the their time when the dark shadow of violence is becoming longer and they act as beacon of hope. Thus, a Sufi soul is devoted in the remembrance of the Creator whereas the physical bodies are at disposal for the welfare of humanity without any restriction of time and appointments.

The above glance at Sufi’s mystics explains they practice Nero Linguistic Programing (NLP) through generation of social network. According to the recent stats by World Health Organization (WHO), 350 million out of the total world’s population and 34 percent of the Pakistan population is suffering from mild to severe form of depressions. This ratio has persistent increase over time. In contrast, the picture was altogether different in the start of eighteenth and early nineteenth century when the world renowned Sufi saints were practicing their above stated principles. Thus, keeping in view Iqbal’s thought:”Come out of the monastery and play the role of Shabbir, for monastery’s faqr is but grief and affliction”.

So, we all should join hands to foster social rehabilitation and reform the existing Khanqahi system. The effective restructuring of the system is possible in three ways. Firstly, there should be strict check and balance on the revenue generated on a daily basis at multiple Dargahs of the region as the concerned authority AUFAQ and Ministry of Religious Affairs is providing misleading numbers as it states that there is only 8 percent annual increase in income from shrines. In contrast, a recent media report the income of Data Dabar went up by Rs. 15 million to Rs 230.97 million i.e. 93 percent increase annually for the accounting year 2016-17. So, it clearly depicts the misrepresentation and channel of money flow from devotes to donation boxes and later to Sajadanishan’s (the descendants) pockets. It is proposed a proper microfinance institution should be developed at Dargahs and small loans should be provided to homeless, needy, widows etc. But, again there should be proper inquiry and channel of transaction to be followed. We can take Aukhwat (a microfinance bank) as reference model.

Secondly, diverse range of individuals come and visit the holy places with different aims and upon closer inspection some of them our highly skilled and talented but due to no peace of mind have decided to spend rest of their lives in Dargah and labelled as Faqirs. It is proposed to have use of these resources as well by establishing small training and vocational institutes within the premises of the holy shrines. It will help in knowledge sharing and enhancing the skills of deprived souls just like the saints.
Thirdly, upon closer look and repeated visits at multiple shrines I have observed there is no proper system of food distribution among the devotees. Thus, it is proposed to have a proper food network system and concept of dignity of food should be launched. Some part of the shrine should be reserved for serving food to improve the hygiene and avoidance of waste.

If the proposed problems and given solutions are effectively inspected by the concerned authority it will definitely help in shaping the strong system and holy shrines as one of the organs in socio-economic rehabilitation initiatives. Last but not the least, Sajadanishan’s (the descendants) should play the role of psychotherapist like their ancestors. They should devote themselves for community development rather over-filling their pockets, building huge palaces and showing off their material possessions gained in terms of nazrana’s (material things given by devotees).