STOCK MARKETS TAKING A BEATING AROUND THE WORLD: Should We Worry In Pakistan ? Let me start by directly coming to the point. The answer is NO. Western markets going down are based on absolutely different reasons. Firstly, American Markets have not had a correction since 2011. It has been an upward movement and nothing but. Secondly, Fed might raise the interest rates after a long time has investors jittery. Thirdly, a minute effect, but Argentina defaulting again with absolute complications where the definition of default is being legally challenged by the President of Argentina herself is also causing discomfort in North America. Now lets come to Europe. Thirty percent of the European Unions energy is exported out of Russia. Sanctions first by the USA and now by THE EU are going to have some long term negative effects in the German as well as french Markets. Gazprom Bank and two other major Russian banks doing business in Europe have come under these sanctions and the free flow of energy deals financing specially by Gazprom Bank, will be effected. Now Pakistan. This has nothing to do with our markets. NOTHING. Neither are we a major lender to Argentina nor the increase in interest rate in America effects us in any manner nor the Sanctions on Russia make any of our deals sour. We have no companies Dually Listed in Russian markets and the ADRs that we have of a few companies listed on NYSE barely trade. So, sit tight, let the volatility take its course in the American Markets and rest assured that nothing will cause devastation in KSE except your panic. The Volatility Index (VIX) Listed on CBOE which gauges the volatility sentiment on a 30 day trading is only at 16, anything above 20 is something to worry about. So in my opinion, even the American Markets will not see much in continued selling. SO...Relax and Hold on to your investments.
Posted on: Fri, 01 Aug 2014 15:53:39 +0000
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