Pakistan shores up the house that Jinnah built

A country’s balance of payments crisis normally creates the kind of volatility, which burns investors foolish enough to buy into rising stock markets without studying their history books first. Yet in 2018, Pakistan appears to be the exception to the rule, at least where the equity markets are concerned.

The crisis in the country, founded by Muhammad Ali Jinnah in 1947, is real and symbolised by its fast-dwindling foreign exchange reserves. These stood at $11.16 billion in early April, representing just two-and-a-half months of import cover.

So why are the equity markets doing so well Year-to-date, the Karachi All Share Index KSE ranks as Asia’s best performer,...