ISLAMABAD: Sluggish growth in developed economies has prompted central banks to push interest rates down to zero and beyond, wiping out yields on government debt and sending investors into all sorts of fringe or previously unloved markets such as Pakistan's.
"By estimates, since March more than $ 67 billion has poured into a group of 30 emerging markets tracked by the Institute of International Finance. That number doesn't include money heading to markets such as China and Russia, where information on foreign buying is limited," according to a report carried by The Wall Street Journal.
"Ross Teverson, head of emerging-market strategy at $49 billion money manager Jupiter Asset Management, has a new star pick: Pakistan," the report said.
"The country wasn't even considered an emerging market when he decided to invest. Until earlier this summer, it was a rung lower-a "frontier" market, where stocks are notoriously hard to trade and the political climate is tumultuous. And yet, the benchmark KSE-100 stock index is up 20% in dollar terms this year, Exhibit A in how far global investors are willing to go for returns these days," it added.
"Investors have had to go further down the risk spectrum," the report quoted Supriya Menon, senior multi-asset strategist at $ 153 billion money manager Pictet Asset Management.
According to the report, Alex Muromcew, who manages the TIAA Emerging Markets Equity Fund, has been increasing his fund's exposure to Peru, a fringe investment even among emerging-market specialists.
The country has attracted attention with a new president who is seen as market friendly. Stocks there are up 56% this year in dollar terms, the report added.
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