Increasing Signs of Pakistan's Depression?

Last July we posted in Does The Violence In Pakistan’s Stock Market Signify Signs of Panic? indications of "panic" from rioting retail investors.

With the Karachi 100 down only about 40% from the peak (compared to others), domestic retail investors appear to have given up hope.

This week's quote reveals much of the rapidly sinking sentiment...

“There are no longer any small investors left in the stock market, they have all been destroyed,” said Kausar Qaimkhani, chairman of the Small Investors Association, leading a group of about 50 shareholders outside the Karachi Stock Exchange. (New York Times).

courtesy of Danske Bank

To consider Karachi's decline has been relatively muted when the country seems faced with a typical Emerging Market "balance sheet crisis" of exploding current account deficits which in times of external turmoil and lack of global liquidity has led to a rapid reduction of foreign currency reserves, sharply rising inflation, swooning currency (down about 30%) , debt downgrade on rising default fears and even fears of national bankruptcy (some have been "cleaning out their bank lockers and dollar accounts" on rumors of the possibility of government freeze on withdrawals). This has been aggravated by a weakening economy and deteriorating political atmosphere.

Pakistan has even approached China to solicit for economic aid. (Who won't? With 1.9 trillion in reserves, China could be the world's counterpart of JP Morgan ,the legendary financier who was credited to have rescued the US economy during the 1907 Panic.).

Nonetheless, all these point towards a near despondency- depression scenario.

Interesting times indeed.