Best Invesment - What do you think?

A380 · 05-13-2007, 11:33 PM

Based on economic conditions in Pakistan, what do you think is the best way to invest money? Comment with reason..

Real Estate?
Securities?
Bank Deposits?
Governement Saving Schemes?
Gold?
Other?

Muhammad Amir · 05-14-2007, 05:29 AM

Real Estate Speciall in Defence and Clifton in karachi......

I choose Real Estate because i saw the much much property kraze in expacially in Karachi ir is good Value for Money...also in those above identified areas i thought no one can have a loss their is more and more earning also Clifton Block#1 and Block#2 which are in develping conditions are paradise for Investment i choosed Real Estate as preffered to othes because the economic conditions are clear to all of us espacially after 12th May.....so investment in Securities ad Govt Schemes are not very efficient options....also Gold's worth is increasing but i can't defeat Property...........

I bet property will be the options of many

kamranACA · 05-14-2007, 05:14 PM

Dear,

Property has always been a good option in Pakistan. In earlier days, agricultural properties were more emphsized but now commercial and residential properties are the best option to invest.

There are so many reasons to invest in real estate like the fact that there are huge black money resources with investors of Pakistan. You will amaze to see that mill owners' and big politicians' tax returns show very meager income levels and tax to be deposited. The people who are the owners of billions/millions are behind the professionals in personal income tax payments. Since their income tax and income are very nominal figures they have to maintain their wealth statements by way of foreign remittances received through proper banking channel in Pakistan being exempt from every taxation inquiry and levy. They create their sources through these foreign T.Ts and then invest it in real estate having least tax consequences for them. Income from real estate dealing is subject to provincial levies and there was no big income tax levy since years. For this reason, every big fish was inclined to invest in real estate, to manage its wealth statement without having any impact on taxable income.

Again they show lesser prices of real estate to save stamp duties etc (for buyers). This as a consequence again reduces their wealth than the original figures and black money is created. Again this black money is routed through foreign T.Ts and source is created in wealth statement. This viscious circle always remain in operation.

Since all the big investments are being made in real estate. The players of this field will never let this business down becoz there is billions of stake of big players.

Thats why I prefer the real estate on all other options.

Moreover, this is the investment which always have an intrinsic value and is not merely a promise to get some thing on a future date. Rather, it is an asset which is always with u and is always in your control.

Last but not least, real estate investments have shown biggest profits during last ten years and the SBP policies are not so effective to reduce real estate investments.

Best regards,

Kamran.

derivativetrader · 05-14-2007, 06:34 PM

I also think it will have to be real estate but you'll have to make sure that you are paying a fair price for your plot. Not sure about Karachi but in Lahore, during the last boom, prices for some phases in DHA shot upto to nearly Rs 20m per kanal and many investors would have taken their positions. Now those prices are down by upto 50-60%. People who would have bought their plots then are in big time loses and in loses which they may never be able to recover.

I think the best value plots or indeed files would be in the developing phases of schemes such as DHA.

Gold is also a hedge against inflation, like real estate. However, it's difficult to buy and store. Moreover, given the current level where gold is trading in the international markets, I don't forsee a more than 20-30% increase. Real estate, specially in develping areas, has probably potential to rise by 10% p.a. for the next few years.

Since rupee gets weaker every year, I wouldn't hold significant investments in government securities.

Securities markets are not very efficient in Pakistan so wouldn't take much rish there too.

Disclaimer The above opinions are the author's own opinions based on his observations. They may or may not be right or appropriate for any investor. Thus, the author does not take or assume any responsibility for any investment decision. The investors should do their research themselves.

DT

Muhammad Amir · 05-16-2007, 02:28 AM

so 100% are in favour of property....so A380 now you are going to buy properties...................

derivativetrader · 05-16-2007, 03:13 AM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by Muhammad Amir
 so 100% are in favour of property.
<hr height="1" noshade id="quote"></blockquote id="quote">

Based on a sample size of 3, you cannot draw conclusions that everybody would prefer property...[D][D][D][D]

Muhammad Amir · 05-16-2007, 06:24 AM

Hmmmmmmm........According to audit sampling theory this is right....however sample should be a represensative of all population and so we are heavily expexted that even almost 1% of the population(Forum's) will hardly take part init...

msc286 · 05-16-2007, 07:08 PM

Just to make the sampling more realistic and representative of the population, I also tend to favor the purchase of property as the suitable investment option )

Schuaeb · 05-17-2007, 02:15 AM

Agreed with the generall opinion. But lot of vigilance is to be excersised while investing in real estate. After the recent boom some sharp decline in prices were also witnessed.

Bank deposits and govt securities due to their low return are not very viable investing options now a days

derivativetrader · 05-17-2007, 03:24 AM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by Schuaeb
 

Bank deposits and govt securities due to their low return are not very viable investing options now a days
<hr height="1" noshade id="quote"></blockquote id="quote">

It depends on your investment objectives. If someone is looking for regular income then real estate isn't the choice. You may be surprise to know that returns offered by banks in Pakistan is alot more than what is being offered in the UK. It all depends on what you mean by 'low'..

Schuaeb · 05-23-2007, 01:02 AM

Right DT. By saying low I meant interest barely covers inflation rate in Pakistan

derivativetrader · 05-24-2007, 11:01 PM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by Schuaeb
 Right DT. By saying low I meant interest barely covers inflation rate in Pakistan
<hr height="1" noshade id="quote"></blockquote id="quote">

I agree the real interest rates are currently around 1-2% p.a. But, these are inline with the UK or any developed economy. I guess with the development of mutual fund industry in Pakistan, stock market could offer an alternative.

Schuaeb · 05-24-2007, 11:43 PM

You are right DT. But it will require a lot of time for Pakistani public to understand and invest in mutual fund industry. People like to go for the safest investments, its therefore, bank deposits and property which attracts most of the investment from common people. Even the business class has got similar approach. They like to invest where minimum risk is involved. It is perhaps the reason due to which we concluded after 60 years that textile is the over emphasized sector, similar is the condition with sugar industry