investment opportunities in pakistan & why to invest in pakistan

8/13/2019 Investment Opportunities in Pakistan & Why to Invest in Pakistan

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Investment Opportunities In Pakistan &

Why to Invest In Pakistan?

ubmitted to

Prof Bilal Sarwar

ubmitted by

Arslan Nawaz

L1F11MCOM2165

Section E



Investment opportunities in Pakistan

Following investment opportunities are available to investors in Pakistan.

Investment in Real Assets

$ Buying and selling gold.

$ Investment in different economic sectors like Agriculture, Oil etc.

$ Establishment of new companies

$ Real estate

Investment in Financial Assets

$ Saving Accounts by different commercial banks at different profit rates.1

$ Share of different companies.

$ Special Saver Certificate by Bank AL Habib Limited2

$ Sukuk

$ Term/Fixed Deposit by different commercial banks at different profit rates.3

$ Term Certificates4

$ Treasurer's Call by Bank AL Habib Limited5

$ Treasury Bills (T-Bills)6

$ Terms Finance Certificates (TFCs)

$ Certificate of Islamic Investment (COII) by different commercial banks.7

$ Certificate of Deposit (COD) Tenor of Deposit: 3 month to 10 Years.

$ Certificate of Investment (COIs)

$ Engro Rupiya8

$ Defense Saving Certificates (DSC)9

1 Rate of profit is 6.50% to 10%

2 Three year Savings Certificate. Minimum Amount required to invest in the certificate is Rs. 25,000 and profit

rate is 9.25%.3 Rate of profit is 8.22 to12.25

4 Investment can be made for 3 months, 6 months, 1 year, 2 years, 3 years and 5 years and 7 years

5 AL Habib Treasurer's Account. Profit is calculated on a daily product basis and credited to Account monthly.

Rate per Annum 1.25% to 1.75% + on different deposit amount.6 Treasury bills issued by the Government of Pakistan and sold through the State Bank of Pakistan via

fortnightly auctions. T-Bills are issued with maturities of 3-months, 6-months and 1 Year minimum

denomination of Rs.100, 000.7

Investment can be made for 1 month, 3 months, 6 months, 1 year, 2 years, 3 years and 5 years to 8 years.8 Fixed Profit rate of 14.5% per year payable every 6 months for a tenor of 3 years. Minimum investment of Rs.

25,000 with increments of Rs. 5,000



$ Mutual Funds

$ Pakistan Investment Bonds (PIBs)10

$ KESC AZM Term Finance Certificate

Why to invest in Pakistan as compared to neighboring countries?

International Rankings

World Bank in its annual "Ease of Doing Business" report of June 2011 recognized Pakistan

the 3rd most business friendly country in the south Asia while Sri Lanka, India and

Afghanistan ranks on 2nd

, 6th

and 8th

positions respectively.

Ease to Investor

Equal treatment of local & foreign investors.

All economic sectors open to foreign investors.

Foreign equity up to 100% allowed.

No Government permissions required.

Remittance of capital, profits, royalty, technical & franchise fee allowed.

The facility for contracting foreign private loans is available to all those foreign

investors who make investment in the approved sectors.

Zero import duties on capital goods, plant and machinery and equipment not

manufactured locally. Central Board of Revenue (CBR) can supply a list of locally

manufactured good. In case of doubt the investor is invited to consult the Board of

Investment (BOI).

Zero import duties on raw materials used in the production of exports.

Investment in Construction Sector

Due to over population there is the high demand of houses as compared to supply.

Availability of hard working, intelligent and skilled labor at lesser cost.

High Interest Rates

Interest rates in Pakistan remain amongst the highest in the world. The Central Bank has

announced the discount rate at 12%, keeping it between 12-14% over the last several

9 These certificates are available in the denominations of Rs.500, Rs.1000, Rs.5,000, Rs.10,000, Rs.50,000,

Rs.100,000, Rs.500,000 and Rs.1,000,00010

PIBs are long term bonds issued by the Government of Pakistan and sold through the State Bank of Pakistanvia periodic auctions. PIBs are issued with tenors of 3, 5, 7, 10, 15, 20 and 30 Years. The minimum

denomination of PIBs is Rs.100, 000.



years. Interest rates in China, in comparison, are at 6.56%, in United Arab Emirates at 1%,

and in the United States of America and United Kingdom at 0.25% and 0.5% respectively.

Oil and Gas Sector

Oil and gas is another sector in which investor can have offshore and onshore exploration.

They can invest in refinement, pipelines and storage facility.

Investment in IT Sector

Provision of low-rent Software Technology Parks (STPs), with fiber-optic connectivity,

libraries and conference rooms. Provision of funds to software companies to achieve ISO-

9000 certification and CMM/CMMI rating. 100% ownership of equity allowed to investing

foreign IT/ITeS companies. Tax exemption for IT companies till 2016. 100% repatriation ofprofits allowed to IT companies. Seven years' tax holiday for venture capital funds.

Minimum rate of 30% depreciation on computer equipment.

Investment in Communication Sector

Pakistan has more than 20 million Internet users in 2009. The country is said to have a

potential to absorb up to 50 million Internet users in the next 5 years thus a potential of

nearly 1 million connections per month.

investment opportunities in pakistan & why to invest in pakistan

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