Barclays Leaves Pakistan; China and Coke Move In
Pakistani local buses

In June, index-provider MSCI announced it would consider Pakistan for a possible upgrade from Frontier Market back to Emerging Market status next year, after being downgraded in 2009.  Amidst this positive news, deals are being done with increasing frequency here.  Pakistan’s largest privately owned bank, Habib Bank Limited (HBL), finalized the acquisition of UK banking giant Barclays’ business in the country on 15 June.  The State Bank of Pakistan (SBP) provided the final sign-off this week. The Barclays sale is the latest in a string of divestments as the bank reels from the US$ 5.6 billion in fines that it has paid for its part in the Libor interest-rigging scandal. Pakistan’s banking industry is on the mend, having posted profits of nearly US$ 800m in the first quarter of 2015, a year-on-year increase of 58 percent.

The Karachi stock market has rallied over 70% since Prime Minister Nawaz Sharif ‘s government took the helm in the summer of 2013. A further boost in economic activity is expected following China’s recently announced $46bn infrastructure investment plan. Pakistan is not without its problems, of course, with a shortage of energy sources and a profound surplus of radical extremists in its porous northwestern regions.  Those challenges, however, have not deterred investors such as Coca Cola, who recently opened a new bottling plant.

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