Profit E-Magazine Issue 227

Are you a young doctor in Pakistan?

By Bakht Noor

Are you a doctor in Pakistan? Have you just graduated and are about to begin your house job? Or are you possibly in your last couple of years of med school? For that matter are you even a mid-career young-doctor working as a PG Trainee or an MO? If any of these apply to you, we have a piece of advice: run. Give whatever test you need to, find whatever opportunity you can in a different country, take your skills, and leave.

Young doctors in Pakistan are being robbed blind. As one of the most highly skilled professionals in the country, they are overworked and underpaid. And unless you have either the right connections, a wealthy background, or access to the correct institutions

setting up a private practice (which is where the money is at) is next to impossible.

A bad financial decision

There are two kinds of medical students. Those that go to government medical colleges and those that go to private ones. While the private ones are dreadfully expensive, costing on average Rs 5-6 million for a full ride through five years, the pay-off is far from immediate and difficult to achieve. And even for those studying on subsidised rates at government colleges the path to financial stability is paved with uncertainty.

After MBBS, a student starts working as an HO (House Officer)- what is commonly known as House Job. A fresh graduate isn’t licensed to be a medical practitioner. The Pakistan Medical Council (PMC) issues a tempo-

rary licence. An HO becomes an MO (Medical Officer) if they begin working immediately after the completion of their House Job. In case they pursue further training (i.e. specialisation), they’re known as PGs — post-graduate trainees.

“The stipend for an HO is fixed at 65,000 PKR. This is morbid given the amount of labour they’re required to put in. Not only are they training as doctors but also providing care to patients”, explains Dr Syed Maarib Iftikhar, who also runs advocacy group Reformistan.

Compare this starting salary to other less skilled professionals. A fresh undergrad from LUMS with no experience has an average salary of Rs 75,000 per month. If you compare their skillset to that of an MBBS graduate, their salary seems ridiculously high. A fully trained doctor has a fixed stipend of Rs 65,000, and this too they don’t get entirely or get cut in smaller cities. On the other hand, a fresh grad from LUMS that has studied marketing might

Underpaid, overworked, and with surprisingly few options available the best financial decision for young doctors in Pakistan is to leave

be able to land a job with very little experience at a consultancy and make twice or even thrice that as a starting package.

While abysmal starting salaries are a regular feature in the medical profession all over, the prospects of this rising are also bleak. The pay scale only improves once they become consultants — which may take up to 10 years. And even the path to becoming a consultant is uncertain. It requires a certain degree of specialisation that requires time to study. For a young doctor that does not have family money, the salary that an HO or an MO gets is not enough to live sustainably and also have enough time to study and improve their standing.

The stipend doesn’t cover anything- the cost of rent, fuel, utilities, absolutely nothing. HOs who don’t immediately opt for specialisation become MOs (medical officers). This is basically a non-trainee job without specialisation. “They’re the most severely underpaid. Their salary varies according to the hospitals they work at and the number of hours they put in, but a general estimate would be 60-65K.”

This is also a gendered domain as mostly female doctors work as MOs. Due to societal pressures of marriage and homemaking, women feel restrained from pursuing specialisation and often settle as MOs. Women doctors in Pakistan are more handicapped in terms of personal finances. They mostly lack the luxury of time and are permanently deterred from becoming consultants. Despite the rigorous training and education, 60-65K is the extent of their finances in the field.

Many PGs (post graduate doctors) opt for specialisation, which is the process of gaining expertise in a particular medical field such as neurology, hepatology etc. Training PGs are better off at government hospitals, usually receiving a monthly salary of Rs 100,000. However, private hospitals pay considerably less. In fact, many PGs are unpaid. The stipend for PGs is even more appalling. They’re paid a monthly amount of Rs 90,000 in the government sector, and Rs 35,000-45,000 in the private sector. It takes 4-10 years to complete training.

They still continue to work in hopes of building their CVs as trainees and ultimately starting consultancy after 4-5 years. Becoming a PG is also very competitive.

“It is very difficult to find a position here and the pay is as low as 65000 PKR, even less than the HO stipend. It’s a painstaking process too. PGs are required to pass 2 exams, one in the first year of training and second in the last. The second exam is really difficult to pass and many people aren’t able to make it. The system of PG-training is very unfair and limited. Graduate trainees are often not paid and I feel disrespected on their behalf. This gives a clear signal that the country doesn’t value their education. You don’t get the compensation that you deserve,” explains Dr Maarib.

Is money the only problem?

Money looks ridiculously bleak here. However, it isn’t the only problem. Speaking to Profit on the condition of anonymity, a recent graduate from CMH Lahore said that the Rs 65,000 stipend wasn’t the only issue for young doctors. “You could still make an argument for the low pay because the house job is a part of one’s professional training and is considered an education. But the amount of work that HOs are expected to do is insane — a lot of hospitals only run on the basic labour that HOs provide which is very much skilled labour,” they explain.

“This involves 100-120 hours of work per week, which is unheard of anywhere else in the work. It obviously can’t be justified financially. However, people don’t really care about the stipend here. It’s seen as a part of education, one really can’t practise medicine without this.”

This, of course, is part of the problem. A lot of the private students that go to colleges like CMG go after completing their A levels and come from families that can afford to pay the fee for a private college. For them, it is possible to treat the stipend as extra pocket money and bide their time until they can specialise and open their own practice and then make a lot of money. But consider for a moment a young doctor that does not have those kinds of resources. Made to work over 100 hours a week, they will not have enough money to make any savings and not enough time to prepare for examinations that may allow them to specialise and make more money. They regularly thus get stuck as MOs or PG Trainees making very little money for the amount of highly skilled work they do.

According to Dr. Maarib, the main problem is the culture that you find in med schools and hospitals. “It’s extremely regressive and exploitative. It’s ironic how people who claim to take care of your mental health are the ones to mess it up. Junior doctors especially face a hostile environment. There is no sense of mutual respect and they’re expected to keep their heads down and be okay with the extremely toxic work environment. This adds to why many young doctors are adamant on leaving the country,” he says.

“The hours that they’re expected to work are gruesome, and that too without a break. The doctors are severely overworked and underpaid. You’ll run into doctors who haven’t slept in 40 hours. This is unfair, particularly in a profession that caters to human life. It explains why doctors in outpatient departments are often impolite with their patients. They’re in a constant state of stress and anxiety. This creates a negative cycle which directly impacts patient care.”

The system of PG-training also thrives on people-pleasing and running favours for seniors. “It’s a deeply exploitative system. The trainees need letters of recommendation from their consultant to set up their own practice. The LoRs depend on how much the trainees can keep their consultants happy. This gives consultants the blank check to exploit junior doctors and get away with it. The junior doctors are trapped essentially. They’re always trying to please their seniors and run extra favours for them. This isn’t professional and shouldn’t be there. Slander and abuse is casually thrown at them. They’re basically helpless as they need to complete their training. There’s no one they can report to and reporting itself is a career suicide for them as it’d jeopardize their LoRs. Junior doctors have to endure a lot, and none of it is worth it.”

“The work environment is much kinder abroad. The NHI (National Health Insurance) already grants you leave for a multitude of reasons. You can call in sick and not be questioned. Other countries are far more generous in taking care of employees’ mental health. You don’t find that here.”

Moreover, training isn’t uniform here either. According to sources, “the Central Induction Policy (CIP) was applied to the central body, PMC. It entailed that merit would decide where people would go for training. However, some points were very absurd. In order to promote doctors in BHUs (Basic Health Units in rural areas), MOs would get extra points. Bribery was rampant here. MOs would pay 20 lacs to work at BHUs to earn extra points. These points would guarantee them a training spot later. All of this was a big mess. Principally, it’s good that the government is facilitating you to work at BHUs. Yet, it’s fundamentally wrong if one has to pay to get there.”

“The place where you train is what you’ll be essentially. Med school isn’t that important as it doesn’t teach the practical stuff. You basically learn to become a doctor in your training- and training isn’t uniform. It varies across institutions. You’re left at the mercy of trainer doctors. They tend to have inflated egos, which is a huge put-off for me. “Then there’s of course the financial aspect. The country is ravaged by economic turmoil.”

A saturated profession?

An HO (house officer) at Shalamar Hospital in Lahore reported that medicine has become a deeply saturated field in Pakistan. It’s extremely difficult to find admission without contacts and/or money. Even after admission, the merits are so high that students are unable to find seats at the department of their choice. “Only 1-2 seats were available for surgery this year.”

However, according to the CMH graduate, medicine as a profession isn’t saturated in Pakistan. “There’s an infatuation with medicine at large at a social level. People would go to any and every length to become a doctor. The problem is that the infrastructure isn’t developed to that extent. It can’t cater to so many people. Pakistan still has a strikingly low number of doctor to patient ratio.”

An added layer to this is that doctors are concentrated in urban areas. According to Dr. Maarib one doctor would be catering to an entire village. “Even hospitals in Lahore such as Mayo Hospital are inundated with patients coming from all over Punjab. Patients in critical conditions often have to wait for months to get their surgeries done. New hospitals haven’t been built to accommodate the population increase as well as the growing number of doctors. In fact, many doctors remain unemployed.”

It starts very early

It all traces back to the very beginning.

Every year, thousands of students from across the country appear for the MCAT (medical college admission test) aspiring to become successful doctors. However, the admissions process is wracked by uncertainty and inconsistencies.

“The admission process is problematic as a whole. It’s revamped every year, which creates so much confusion and anxiety. There’s never a fixed date for admission and examinations. There’s never been a single policy. Everything is in a state of limbo. You don’t know what’s going to happen next,” says Dr Maarib.

How does the admission process work?

“There are all sorts of medical colleges. However, the rate at which Punjab’s population has increased over the years doesn’t match the number of hospitals and medical colleges functioning in the province. The number of government colleges since the 1980s has remained constant. Though private colleges have been emerging, they are limited to a certain financial class. A lot of people can’t afford private medical colleges. Furthermore, even private medical colleges don’t follow a fixed set of policies. They find loopholes within the pre-existing policies despite claiming their accordance with the PMDC. There’s a lot of grey area here too.”

A recent graduate from CMH medical college detailed the structural inconsistencies within the PMC (Pakistan Medical Commission). He reported that when he started pursuing his MBBS six years ago, the MCAT used to be administered at the provincial level, “it didn’t account for students coming from the A Level stream, and only benefited students coming from FSC. The admission process was extremely biassed, it only catered to students who had studied the local curriculum.”

As a result, a few students filed a case

in the court. The court ruled in favour of the students: CMH agreed to accept other scores in lieu of this test. However, the PMC declared that they wouldn’t consider this decision and filed another case at the High Court, which the students lost. Ayesha A. Malik, the first female Supreme Court Judge of Pakistan was the presiding judge at the time. Then, there was an appeal against this at the Supreme Court where Saqib Nisar ruled in favour of the students, “as a consequence of this development, I was accepted at CMH. My aggregate percentage was higher, 94%.”

“Despite the legal battles, the systematic inconsistencies continue to prevail. The PMDC (Pakistan Medical Doctor’s Commission) was abolished and reinstated as the PMC (Pakistan Medical Commission). This created legal issues as the parliament didn’t approve of the ordinance. The PMDC nevertheless became irrelevant and the PMC was championed by the PTI government, under the leadership of President Arif Alvi who himself is a dentist by profession. The PMC decided against a provincial-level MCAT and introduced a national-level computerised test instead. Again, this was marred by issues and led to corruption.”

“The system was rigged. Candidates would pay off the people conducting this test. They’d escort such candidates to separate rooms and provide answer keys for the test. It doesn’t stop here. Colleges were offering seats to candidates in lieu of 30 lac rupees. LMDC would call students, saying that if you pay us, you’d get a seat. The only institutions not accepting student bribes were Shalamar and CMH,” our sources add.

The new government has again reverted to PMDC. These policies indicate that the admissions process has become more classist over subsequent years. Government institutionsvery few in number- are already saturated. Private institutions are overly expensive and thereby exclusive to a certain social and economic class. On top of that, irrespective of merit, most require that you pay your way in. The system is deeply exploitative from the get-go.

Issues with the education system

However, getting in isn’t the only issue. The educational system itself is deeply flawed. The curriculum is outdated and nearly obsolete. There are huge gaps between theoretical learning and practical training.

A recent CMH graduate presently preparing for exams to pursue medicine abroad says, “once I started preparing for foreign exams, I realised how far behind we are. At med school, we are just rote learning material for the initial years, and then expected to reproduce textbooks in exams. There’s a huge gap in conceptu-

al learning and knowledge application. You can draw a parallel between studying medicine in Pakistan and the local matriculation system. As opposed to the O/A Level system where you’re required to apply concepts in exams, the matric/ FSC system is only fixated on rote memorization. It doesn’t teach you how to apply theoretical knowledge to practical situations.” Not only is medical education highly expensive, it’s also redundant.

The policies regarding the curriculum are in need of drastic change. Dr. Maarib adds, “the increased emphasis on rote learning doesn’t develop clinical skills. In Pakistan, only the Aga Khan University focuses on the development of clinical skills. It operates very differently compared to other medical colleges in Pakistan. Students are introduced to clinical wards from the beginning and start assisting surgery as soon as the third year. You don’t find this anywhere else in Pakistan. There’s an obsession with cramming over clinical work, which wastes time and is simply not practical.”

Furthermore, med schools prioritise the wrong things. “Medical colleges in Pakistan are obsessed with attendance. You don’t see this abroad where most lectures are available online. Attendance is only compulsory for ward hours and clinical rotation. In addition to this, the way in which classes are structured is objectionable. You find 150 students cramped in a classroom, with absolutely no sense of what’s going on.”

A fresh graduate from Shalamar Medical college adds, “working at the field requires much more unlearning and relearning than it should. Training abroad is also therefore significantly better.” The quality of education therefore can’t be justified by education costs.

In discussing the college fee, the CMH graduate said, “the fee was capped at our time. The Chief Justice set the cap at 8.5 lacs for a year. Colleges claimed that it was impossible to budget and carry operations under this amount. This also led to a hike in medical situation, due to which a settlement was reached. The settlement entailed that colleges wouldn’t charge through bribery and adhere to the amount they’d negotiated on. Now the per annum fee is way out of hand. Accounting for inflation, it’s as high as 24 lacs. Most private colleges charge between 16-17 lacs.”

Long story short, if you’re a student at a private medical college, you’re paying 16-17 lacs per annum, almost 85 lacs in total for education that’s practically useless. What’s the point of paying 85 lacs for a 5-years MBBS program when most of your learning will happen on the field? And if you are the kind of student that has made it to a government med school against the odds and without familial wealth of any significance, then the road ahead will be arduous. That is why the best course of action would be to take your skills and go somewhere they are appreciated. n

By Abdullah Niazi

What inspires a government to tell its people what to eat and what not to eat?

The answer is fear.

The fear that there are certain foods that will affect the health and productivity of a nation. The fear of sickness and the unknown. At the core of a very basic evolutionary fear — that of poison.

On January 4, 2023, it was this fear that the Federal Minister for National Food Security and Research (MoFS&R) Tariq Bashir Cheema (excuse the pun) fed into. Speaking with the press, the minister declared people should stop eating chicken as it was harmful to health. His reasoning? The poultry in the country was being fed with seeds that had been genetically modified. As a result, the meat from these birds was toxic.

“The GMO soybeans are toxic, and any product coming from them is dangerous to health. They can cause serious diseases like cancer,” the minister thundered. “I don’t eat chicken anymore. In fact, I don’t eat meat at all. I only eat vegetables,” he explained.

It’s funny when you think about it. Tall, domineering, and a seasoned political operator — one would think there isn’t much Cheema is afraid of. Particularly, not some bird. Yet when Cheema and others like him look at these chickens, they see a threat to the health of an entire nation.

In some ways, it makes sense. There is a lot behind the maxim of “you are what you eat.” Food is the most basic fuel necessary for human survival. And more even than the air that we breathe, food has a direct relationship with culture, religion, and identity. What we consume, what we put in our bodies, has a singular, laser-focused relation to who we are as people and how we define ourselves. In its rawest form, food serves as the border between nature and culture, between human and non-human.

And that is why there is so much anxiety about what we eat and the effects it has on us.

Claims that crops that are Genetically Modified Organisms (GMOs) are a danger to human health have been rife globally for decades now. Time and again, scientific evidence has failed to prove that GMOs are cancerous or hazardous to health in any way. They have, however, played a vital role in helping agricultural productivity keep up with the rising global population.

In the latest episode of the GMO saga in Pakistan, vital oilseeds that are used to make edible oil and feed for livestock including poultry have been held at Port Qasim in Karachi. Widely misunderstood and highly controversial, cracks have appeared within the federal government over it. The bottom line is that as a result two things have happened:

I. A shortage/price hike is on the cards in the edible oil market

II. Chicken prices are soaring and continue to soar, despite the white-meat being a crucial source of protein for a large segment of the population.

With two of the most important caloric inputs in the country facing an unprecedented crisis at the same time and of the same origin, it is worth looking at the state of the poultry industry in Pakistan and answering the question: Why does the government not want you to eat chicken? Profit went to leading international experts, sifted through entrenched academic research, and spoke to the government as well as relevant industries to get to the answer.

The current crisis

It all started with a technicality — but a technicality that was being ignored for a few years. On October 20, last year, two shipments were stopped at Port Qasim in Karachi. The shipments contained GMO oilseeds worth some $100 million on board. And despite the very vocal protestations of the importers that had paid for the consignments, they stayed stuck at the port pending a single certification from the ministry of climate change.

In the months that followed, more ves-

“GMO foods are as healthful and safe to eat as their non-GMO counterparts. Some GMO plants have actually been modified to improve their nutritional value. An example is GMO soybeans with healthier oils that can be used to replace oils that contain trans fats. Since GMO foods were introduced in the 1990s, research has shown that they are just as safe as non-GMO foods. Additionally, research shows that GMO plants fed to farm animals are as safe as non-GMO animal food”

sels joined the two stuck at Karachi and the value of the oilseeds piling up at the port grew over $300 million. The most important thing to understand is one term — oilseeds. When most people hear the term oilseed, they think it is a seed that is to be sown in the ground and harvested for the production of edible oil. Oilseeds is actually a term for the seeds or ‘fruit’ that certain crops produce that are then pressed to get edible oil. So, for example, olives are an oilseed and so are the fruits produced by palm plants and soybeans since all of these are pressed and used to extract oil. Another example of an oilseed is cotton, the seeds from which are pressed and the oil extracted from them.

Pakistan is heavily dependent on these oilseeds for its edible oil. According to a report of the central bank, Pakistan’s palm and soybean-related imports stood at US$ 4 billion in FY21, rising by 47% year-on-year, compared to compound average growth of 12.3% in the last 20 years. And in addition to edible oil, these seeds fulfil another crucial purpose: providing feed for livestock including for chickens.

In the three decades since 1990, the consumption of oilseed meals as feed for livestock has tripled in the country – a big reason for which is the growth of the poultry industry.

This is particularly true in the case of the soybean. Since it is rich in nutrition, its meals offer better digestibility, quality mix of amino acids and have the highest protein content (around 44-50%) compared to all other oilseed meals. These qualities make it a better feed ingredient for chicken in comparison to cottonseed – which was the traditional oilseed used in Pakistan. According to the Pakistan Poultry Association (PPA) estimates for 2015-16, approximately 9.5 million tonnes of poultry feed was produced, nearly a third of which was oilseed meals. This means around 2 – 2.8 million tonnes of oilseed meals were used in Pakistan’s poultry industry. As demand for poultry increases, the number of chickens raised also goes up and so does demand for soy seeds as feed.

As a result, the poultry industry was suddenly in crisis as well. Now, it is worth pointing out here why the shipments of GMO oilseeds were stopped. Pakistan is party to the Cartagena Protocol on Biosafety to the Convention on Biological Diversity, signed in 2001 and rectified in 2009. The Cartagena Protocol is an international treaty governing the movements of living modified organisms (LMOs) resulting from modern biotechnology from one country to another.

Its purpose is simple. One of the observations scientists had after genetically modifying different crops was that when certain modified plant varieties are introduced to new environments, the results can be disastrous for the

Handout of the United States Food Development Authority

local ecology. As a result, to make sure there is no unchecked introduction of GMOs to new environments, the Cartagena Protocol monitors this. And as part of the Pakistan Biosafety Rules of 2005, the ministry of climate change needs to give approval to any new GMO shipments coming into the country.

For the past few years solvent extractors had been importing GMO soybean oilseeds mostly from the United States. However, they had been getting away with it since the climate change ministry had not been paying attention to the issue. This year, the ministry refused to grant the required approval triggering the crisis.

And while the solvent extractors association was leading the charge, poultry farmers were also getting testy. How the entire sage unfolded was spectacular if depressing viewing. With hot words flying and a meeting of a parliamentary (in which the parliamentarian chairing happened to also have a major poultry business) almost coming to blows Profit has been covering it all for months. And while these shipments were released under an order of the Federal Tax Ombudsman (FTO) that granted special permission on this occasion,

the damage was already done.

In various markets of Rawalpindi and Islamabad, Rs 60 per kilogramme price difference for live chicken was being observed, with the rates ranging between Rs 390 and Rs 450 per kg, according to a report in Dawn. The Islamabad Chamber of Commerce and Industry (ICCI) on Thursday expressed concern over the reports that the commercial banks are resisting the opening of LCs of edible oil importers They said it would create a shortage of ghee and cooking oil in the market and cause further hikes in the prices of those commodities. On top of this, now, Cheema’s comments have once again ignited the debate around the safety of GMO-fed chicken.

Are GMOs bad for you?

Let’s get a few things straight here. The GMOs that are being talked about here are not for sowing. The oilseeds being imported are simply pressed and their oil extracted. The mulch that is left behind is used to create ‘cakes’ that are then fed to poultry. So the Cartagena Protocol really

doesn’t have any involvement here. Then there is the other claim: that since Pakistan’ poultry has been eating meals made from oilseeds that are GMOs, the harmful traits on those GMOs are transferred to the chickens and from there to the people that eat them.

Let us look at what science says. The reality is that farmers and agricultural scientists have been involved in genetically modifying the food we eat for a very long time. “For many decades, in addition to traditional crossbreeding, agricultural scientists have used radiation and chemicals to induce gene mutations in edible crops in attempts to achieve desired characteristics,” reads an article by Jane Brody published in The New York Times back in 2018.

This is where there is a parting of ways, and one that is very important to understand. Everyone's agreed that genetic modification has been in place for centuries now. Farmers have used cross-breeding or both livestock and crops to achieve better yields and resistance to weather. What is new, however, is that there are now possibilities of extracting genes from other organisms and including them in differ-

The GMO soybeans are toxic, and any product coming from them is dangerous to health. They can cause serious diseases like cancer. I don’t eat chicken anymore. In fact, I don’t eat meat at all. I only eat vegetables

Tariq

Bashir Cheema, Federal Minister for National Food Security and Research

Goldberg, molecular biologist at University of California

ent organisms. For example, to make a certain maize crop more resistant to cold, scientists might extract a gene from a fish that swims in icy waters and inject it in the maize. It really is a scientific marvel, and at the same time it makes sense that eyebrows would be raised over this level of interference in nature. But by and large, the scientific community has upheld that GMOs are safe.

“Although about 90% of scientists believe G.M.O.s are safe — a view endorsed by the American Medical Association, the National Academy of Sciences, the American Association for the Advancement of Science and the World Health Organization — only slightly more than a third of consumers share this belief.”

And that is the crux of the problem. Even though the scientific evidence is overwhelmingly in the favour of GMOs, the

public perception of GMOs is unfavourable. This is mostly coming from the same brand of pseudo-science that promotes homoeopathic remedies over actual, tested, medicine that works and peddles crystal therapy and all manners of snake-oil.

The concerns usually brought up are that GMOs end up having three harmful effects:

a. Unwanted changes in nutritional content

b. The creation of allergens

c. Toxic effects on bodily organs

In a 2005 report, the World Health Organisation categorically combated each of these concerns. “It has been argued that random insertion of genes in GMOs may cause genetic and phenotypic instabilities but, as yet, no clear scientific evidence for such effects is available,” reads the report.

Robert Goldberg, a plant molec-

ular biologist at the University of California, Los Angeles, says that such fears have not yet been quelled despite “hundreds of millions of genetic experiments involving every type of organism on earth and people eating billions of meals without a problem.” The main problem is that science rarely uses definitive language when a sample size is small or relatively new. In the case of GMOs, for example, scientists to maintain a regular level of human error make statements like “foods have not shown any harmful effect,” rather than saying categorically that a certain food does not have harmful effects.

“You never know for sure, because you can’t prove a negative. After more than a quarter century of growing GMO crops in North America, no detrimental impacts have been detected in North America compared to Europe, where people have been exposed very little to GMOs,” says Goldberg.

Meanwhile, the benefits from GMOs have been authoritative.

“By engineering resistance to insect damage, farmers have been able to use fewer pesticides while increasing yields, which enhances safety for farmers and the environment while lowering the cost of food and increasing its availability. Yields of corn, cotton and soybeans are said to have risen by 20 percent to 30 percent through the use of genetic engineering,” writes Brody.

“Can you, in fact, feed the 9 billion people we’ll have by 2050 … and how do you do that with minimal ecological impact? “I think the way to do that is through food science,” says Dr Goldberg. “I see no difference between manipulating a gene the classical way, through breeding, or by adding a gene.”

And all of this, of course, is talking about crops that have been directly genetically engineered. In the current issue of contention, Tariq Bashir Cheema had claimed that simply because the chicken ate the GMO seeds there would be consequences for health. However, the reality is

You never know for sure, because you can’t prove a negative. After more than a quarter century of growing GMO crops in North America, no detrimental impacts have been detected in North America compared to Europe, where people have been exposed very little to GMOs

Robert

that even if these GMO seeds were banned GMO meals for livestock have long been in the system already.

In fact, in a very specific example a handout of the United States Food Development Authority (FDA) says that “GMO foods are as healthful and safe to eat as their non-GMO counterparts. Some GMO plants have actually been modified to improve their nutritional value. An example is GMO soybeans with healthier oils that can be used to replace oils that contain trans fats. Since GMO foods were introduced in the 1990s, research has shown that they are just as safe as non-GMO foods. Additionally, research shows that GMO plants fed to farm animals are as safe as non-GMO animal food.”

As pointed out by a recent report by BR Research, Cotton Seeds, which are a by-product of the ginning process, are a key source of livestock meals commonly known as khal or binola, a rich source of protein for ruminants. According to SBP, the share of cottonseed meal in domestic oilseed meal consumption stands at 33%. Therefore, by consuming locally produced dairy and meat products, Pakistanis have been indirectly consuming GMO based products for at least the past 15 years.

The chicken part of the equation

This is what it all boils down to. Chicken is important to Pakistan, and this is not a particularly old phenomenon. Commercial poultry production in Pakistan started in the 1960’s and has been providing a significant portion of daily proteins to the Pakistani population ever since. In fact, up until the 1960s, chicken was a meat more expensive than beef.

Prior to 1963, all chickens were of the colourful ‘desi’ variety that we still hear of today that has gamier, redder meat compared to the farm-fed white chickens often referred to as “broiler.” Prior to 1963 the native breed “Desi” was mainly raised which produced a maximum of 73 eggs per year under local conditions. In 1966, however, there was a major breakthrough. The department of Poultry Husbandry at the University of Agriculture in Faisalabad had been working on a new breed of chicken to which they gave the name “Lyallpur Silver Black” which was evolved at this time. This new chicken was capable of gaining 1.4 kg weight in 12 weeks of age under favourable management and feeding conditions. It also produced more than 150 eggs per year.

As a result of this new variety of chicken, more people took up poultry farming and chicken meat became more frequent in the market and also proved to be cheaper. Watching this, the government introduced a number of favourable policies that allowed chicken farming to grow as a business. In this same era, the government announced a tax exemption policy on the income derived from poultry farming. Pakistan International Airlines (PIA) in collaboration with Shaver Poultry Breeding Farms of Canada started the first commercial hatchery in Karachi. Simultaneously, a commercial poultry feed mill was started by Lever Brothers (Pvt), Pakistan Ltd., at Rahim Yar Khan, which was followed by other pioneers like Arbor Acres Ltd. Poultry research institutes were also established at Karachi and Rawalpindi through Food and Agricultural Organization (FAO) of the United Nations to facilitate research services specifically concerning disease control programmes.

As this initial boost got the sector on its feet, it very quickly began to institutionalise. A major milestone in this was the establishment of the Federal Poultry Board in 1972. Then came a boom. The government of Sindh followed a policy to attract investment in poultry farming by offering estate land under 10 year leases. At the same time, the nationalisation of other industries contributing the entry of capital into the poultry industry, particularly in the Punjab, resulted in the poultry production boom. Commercial egg production increased from 624 million eggs in 1976 to 1223 million eggs in 1980. Broiler production increased from 7.2 million birds to 17.4 million birds during the same period.

Over the next few decades, the poultry industry faced its share of issues. Disease in the birds and crumbling infrastructure all contributed to the boom being followed by a bit of a slump. Despite this, chicken very quickly

became the main source of protein for most Pakistanis and was cheaper than both mutton and beef. In a 2020 report, the planning commission even pointed this out. “Mutton prices are about 100% higher than beef prices whereas poultry prices are 50% lower than beef (Table 3). This price trend has induced poultry meat consumption while discouraging mutton and beef consumption during the period,” it reads.

“The prices of all types of meat are increasing, but the increases in mutton and beef prices are the highest, higher than the CPI, while the increase in poultry price is lower than that in CPI. Partly beef and mainly poultry can fill the gap created by the declining mutton consumption in the country because of the exorbitant increase in price of the latter and relatively cheaper prices of the former two meats. A common observation is that the red meat butcher shops have added chicken to their offering.”

Poultry has attained an incredible status in the rural economy and is the second largest industry in Pakistan and means of livelihood for millions. Poultry meat and eggs are cheaper sources of protein. It contributes about 29% of the total meat production in the country and plays a vital role in soothing demands of mutton and beef.

Now, directly as a result of important poultry feed being caught up in the GMO oilseeds shipment saga, the prices of chicken have climbed and crossed the threshold of beef. This means that for a vast swathe of the population, meat is off the menu. For a population that is already malnourished and food insufficient, this is a blow that will have detrimental effects if the issue is not immediately addressed. And considering that GMO grown feed has been part of what poultry in this country eats for nearly two decades, it makes very little sense to deprive many of this vital source of protein. n

OPINION

Ammar H. Khan

Interest Free Economy

Pakistan is no stranger to debt. It currently has total debt of PKR 50 trillion, of which roughly PKR 33 trillion is domestic debt denominated in PKR, while the remainder is denominated in foreign currencies. The government continues to run recurring deficits, and rarely has there been a year in the last three decades that we had a surplus. In-effect, our expenditures remain consistently greater than our revenues.

So how do we fund our deficits? We do so by borrowing from the market, and by paying an interest rate. The people of Pakistan are essentially depositors in banks. These banks then use those deposits to either lend to the private sector, or the public sector. During the last decade, the share of the sovereign and the public sector has significantly increased, as they now make up more than 70 percent of total assets of the banking system. The sovereign has essentially crowded out the private sector by following a strategy of running a perpetual deficit.

If hypothetically, and magically, we do move towards an interest free Economy, how exactly will the sovereign find its operations. One is hard pressed to find anyone who would be willing to lend capital to the sovereign to run its affairs at zero interest rate, or for free. It is a nice thing to have, but not something that one can have. Developed economies flirted with zero

The writer is an independent macroeconomist and energy analyst.

interest rate, and even negative interest rates during the last decade, but that eventually led to massive monetary expansion which led to significant uptick in inflation across the board.

As long as we keep borrowing to run our affairs, moving towards an interest free economy would remain a pipe dream. There is however a possibility that there will be an eventual conversion of all commercial banks in the country onto Islamic banks. We may see a roadmap, and even some progress as well. We may even start calling interest rates, as profit rates, and pretend it’s all kosher. However, there remains a significant shortage of assets that can be deemed shariah-compliant, that the banks can then redeploy their capital towards.

As the sovereign makes up almost 70 percent of all banking assets, it is not possible to convert all these assets into shariah-compliant assets. A pre-existing condition of a shariah compliant asset is that it needs to be backed by some physical and tangible asset. However, most securities that are issued by the sovereign to raise debt have no physical asset underlying that instrument, other than the promise of the sovereign that it is going to pay back whatever it has borrowed.

A transition towards an interest free economy isn’t really happening, especially not under the current macroeconomic circumstances. The conversations about transition are more of a populist play, or to assuage certain sections of the society. We may see some change in nomenclature, wherein how we refer to banking transactions, and spin a more shariah-compliant version of the same. However, if purely economic fundamentals are considered, it may not be possible.

Nevertheless, if we undergo massive structural reforms that result in substantial flow of funds into the banking system, and the demand for funds eliminates from the sovereign as it starts posting surpluses, we may see the market price of funds, or the interest come down close to zero. Considering how our economy has been managed in the last seven decades, and how there is more focus on populist slogans than actual economic policy making, there is little to no chance of actual structural reforms happening anytime soon. n

There’s

By Nisma Riaz

You visit Dolmen mall in Clifton with your mom for the usual trouser dupatta matching, but as soon as you step inside a retail shop you run into a scene which seems like something out of a music video. There are lights, music and a bunch of famous people having fun. Buying clothes is no more a chore, but an immersive experience.

That’s exactly what the new age fashion retail stores are headed towards. First Khaadi, and now Ethnic has welcomed its first experiential store, turning around the whole idea of shopping into a larger than life experience.

Ethnic’s new Creative Studio opening at the Clifton Dolmen mall was the talk of the fashion industry last month. Celebrities and influencers alike, were all seen admiring the enormous new store

The event did not only open doors to a consciously designed store for Ethnic’s customers to relish in a novel shopping experience, but also opened room for some important questions. What is the potential of retail stores becoming more than just a point of conversion? Apparel retailers, like Ethnic and Khaadi, now have outlets that are more than just a shop - they are a point of entertainment. One cannot help but wonder why and how these brands are expanding their footprint by acquiring bigger shops. Do bigger stores mean bigger revenues?

Profit asked Ethnic’s Deputy General Manager Marketing and Creative Head Zunira Iftikhar if their recent launch was an expansion move, and if so how they are able to make such bold expansion moves when the economy is in shambles. She agreed to the former part of the question and for the latter she replied, ”I would not say that business is not suffering, I’m sure every business is suffering. But even if it is suffering, it doesn't mean we will stop loving what we do. This attitude has allowed us to grow so drastically! Ethnic started as a sub-brand of outfitters and there was a time when we had Ethnic by outfitters written on our logo. Now I would say very proudly that we are a sole brand, with a sole identity and we are proud to be ethnic in one itself.” Clearly, the brand is set to make waves, but are consumers ready?

Inflation’s impact on consumer behavior

According to the Pakistan Bureau of Statistics, our economy is experiencing a three-year high inflation, whereby it has more than doubled in comparison to 2019.

Survey data from November 2022 reveals that 53% of Pakistanis have experienced a deterioration in their household’s financial situation in the last six months and only 45% anticipate improvement in the next six months. So what does this tell us about consumer trends when it comes to buying apparel? Does this inflation not depress consumer spending? Well, according to the SPB’s Consumer Confidence survey in November 2022, there was a 1% decrease in Consumer Confidence Index for urban Pakistanis since September 2022.

Considering these conditions, the sales performance of apparel and footwear retailers is expected to dip by approximately 5% from 2022 to 2026, according Euromonitor forecasts. However, data collected by Passport, Euromonitor International shows that the retail value of e-commerce shares of Pakistani retailers, like Gul Ahmed and Khaadi, has experienced an increase in the last 5 years. While consumer spending in retail seems to be suffering, spending on online shopping has seemingly escaped the brunt of inflation.

Industry sources have supported the idea of a shift in consumer behaviors, whereby more and more people are gravitating

towards the idea of e-commerce shopping platforms. An industry source informed Profit that, “Our consumer research and data shows that people do not have the time to stroll around in shopping malls, when they can easily order whatever they want online. It saves them the time and hassle of sifting through multiple racks of clothing.” They continued, “Shoppers look for instant gratification, so they can order what they like online and have it picked up from the store, without having to browse through the store in real time.” This insight indicates towards the dwindling popularity of retail stores. Then what is the point of opening bigger outlets when consumers are moving towards online platforms? Perhaps experiential stores will be the saving grace of retail!

Reimagining the retail landscape

While retailers in the country are cutting costs due to skyrocketing inflation, others are using these trying times to experiment with bigger things. But standing out in a highly competitive and saturated apparel market is like playing with fire.

Digital anthropologists, like Brian Solis, believe that utilizing technological tools, such as video game design and spatial computing, along with the ‘experience’ element can help them do so. Through the incorporation of technological innovations and reimagining the retail landscape as more than just a space to display products, retailers can get a headstart on current

trends and monopolize the market.

Retail stores are largely missing what Solis calls the “wow factor”. It is becoming a formative part of the new age of retail as it unfolds before us and an important ingredient in the recipe for success in emerging retail trends. This gives us the answer to why retailers are seemingly keen on divorcing from their older business models and rebranding their retail experience to serve a purpose greater than just shopping.

Proving Solis’s point, Iftikhar told Profit, “We are shifting towards catering to this new trend that helps our customers associate with the brand and for that to be made possible, store experience means a lot. Here we are aiming to give them the right space and environment to make shopping a beautiful experience more than anything else. Having a bigger, better store and everything that it offers is key to succeed in the current market.”

The answer, in two simple words, is sensory engagement. Profit asked Amna Jatoi, visual merchandiser and product manager at Sana Safinaz what an experience store actually means. “What we basically aim to do when we design an experience store is to create a store that engages all five senses. We use our sense of smell, touch, sight and hearing to perceive things, which then creates an overall experience. Engaging the customers’ senses is essential for creating a unique experience, which then contributes to brand recognition,” replied Jatoi. “For example if you walk past a Louis Vuitton store, before you even enter, you will immediately think ‘oh maybe this is a Louis Vuitton store’. This is because just the color scheme from the outside, window displays and the overall aesthetic combined gives it way. That is what we essentially also understand by the term brand recognition,” she continued.

How are retailers bringing the wow factor to their retail experience?

What we basically aim to do when we design an experience store is to create a store that engages all five senses. We use our sense of smell, touch, sight and hearing to perceive things, which then creates an overall experience. Engaging the customers’ senses is essential for creating a unique experience, which then contributes to brand recognition

Amna Jatoi, Visual Merchandiser and Product Manager at Sana Safinaz

Iftikhar, Deputy General Manager Marketing and Creative Head, at Ethnic

Similarly, if you walk past a Hollister store, you will recognise the distinct smell that all Holister stores have. “They spray an air freshener that can be sensed from outside of the stores and everyone who frequents Hollister would know it because all their outlets smell the same,” Jatoi explained.

These aesthetic and sensory elements are combined to form an experience that customers then start associating with the brand, bringing us back to our initial point- brand recognition. Moreover, the pleasant color schemes and scents also create a feel good atmosphere that is more inviting than a bland shop. It will probably be easier to justify why Khaadi has a cafe in their Experience Hub at Dolmen. They are utilizing the sense of taste, which customers can then associate with Khaadi, something no other brand has done so far.

In the new age of retail, where combating the decreasing popularity of physical shopping has become an issue, retailers are prompted to

improve the experience of shopping. So, what else goes in to make shoppertainment more appealing. Jatoi said that “we live in a very tech savvy era, where anything that is instagramable sells. Our prime customers at this time are millennials, who are greatly concerned with aesthetics and social media.” Backtracking to the Khaadi example, we can now see why they have photo booths right by the entrance of the store. Any store that looks pretty will have people piling in. We are all human and humans by nature are drawn towards beautiful things. Have you ever entered a beautiful store, even when you didn’t need anything from there? Well, this is what retailers want - footfall. “Once you are inside, it’s likely that something will catch your eye. It becomes hard to resist and you end up impulse buying something that you didn't really need,” Jatoi remarked.

You cannot open a successful experiential store unless you understand what draws people in. Some brands take this very seriously. Gul

Ahmed employed machine vision technology to convert visitors into customers. They use SenseR, which gathers data ranging from a customer’s time spent in the store, products they are most gravitated towards, the routes they take within the store, as well those who return to the store. Identifying these behaviors and demographics makes them cater to their customers better than they were able to previously, by doing what Jatoi also told us - strategic product placement. This makes one thing crystal clear: whether you want to create a unique experience that people subconsciously desire or give them exactly what they want, you cannot shy away from technology.

While some brands are still catching up to the concept of store experience, others like Khaadi are already a step ahead. One wonders, how? Well, they take an important lesson from Zara’s handbook. Having a one stop shop, where you can find products ranging from apparel to accessories to home decor, brands are now swayed towards the idea of creating an ecosystem. A market that offers an all-in-one solution to buyers.

“Most brands would eventually move towards opening bigger stores. The reason for this is that they are aiming to make themselves a lifestyle brand. The concept obviously comes from Zara. You don't just want to sell clothes, but you wanna sell the complete look so that is where the need for bigger stores comes in,” Jatoi mentioned.

If you have been to Khaadi’s Experience Hub, you have probably seen their PIT installation. PIT stands for put it together, whereby you can put together a complete look by getting the fabric, as well as button and laces and tassels all from the shop.

To answer the question we posed at the beginning, retailers achieve the wow factor by a strategic store layout, conscious product placement, incorporation of new technology and offering a diverse range of products. Some are even creating markets where the overall experience tends to at times over-shadow the product itself. Are we missing anything? Yes. Customization! Khaadi’s PIT might allow some degree

We are targeting a younger audience, who happen to be more aware of current trends, as opposed to typical customers. The younger generation is all about having a memorable experience, where they can associate with the brand instead of just shopping to buy a new outfit

Zunira

of customization, but Ethnic’s new studio has one-upped them by their DIY installation. Ethnic’s latest Karachi store is a custom studio, as Iftikhar puts it. Their DIY installation allows you to pick your own cushion, tote bag or kurta and design it yourself with different laces, motifs and customized embroidery. They have an embroidery machine that lets you design your own product all in real time!

What is the charm of an experience store?

Just like any other life cycle, the business world is also a survival of the fittest. Same applies to Ethnic’s adoption of experiential stores too. “We are targeting a younger audience, who happen to be more aware of current trends, as opposed to typical customers. The younger generation is all about having a memorable experience, where they can associate with the brand instead of just shopping to buy a new outfit.” said Iftikhar.

In order to stay in tune with fast fashion trends, retailers are now more concerned with providing a unique shopping experience, along with affordable prices, which remain the essence of fast fashion. Iftikhar agreed that Ethnic identifies as a fast fashion brand “Yes, I would say that we are a fast-fashion brand. Even though our target market is not selective, it is in fact quite diverse, since we aren't just catering to teens, or millennials, or the Gen Z, but we are one of the leading brands when it comes to prêt. And prêt is all about fast fashion. With Ethnic, everyday we are trying to make us faster and more relatable to younger audiences. So disposable fashion helps keep up with everyday changing trends and that's what we are aiming for here,” Iftikhar continued.

But why are these big stores popping up only in Karachi? Well, if you are from Karachi, you would know that the only affordable and accessible recreational activities that people can enjoy include going to the beach, dining out and visiting the mall. The appeal of experience stores seems to be in line with the growing demand of improving shopping as an entertaining experience, whereby a unique shopping experience becomes part of the avenue of entertainment for people.

But the lack of entertainment and recreational activities remains true for other Pakistani cities as well. Industry sources have informed Profit that Khaadi’s current strategy involves shutting down smaller stores and compensating for it through their presence in e-commerce avenues, meanwhile opening bigger stores. According to the same source, we can expect to see at least two new market-like Khaadi stores in Lahore. Maybe we will see other cities having similar pop ups soon. Let's ask a more focused question. Why are the only two experience stores we have in Karachi located in the

same mall, within such close proximity?

Why Dolmen?

It takes more than just creating a one-stop shop and utilizing better marketing strategies, such as effective visual merchandising, spatial computing and store layout design to start a successful experience store. Location matters greatly.

Opening a big store is expensive to say the least. Opening a big store in Dolmen City is even more expensive. Well, firstly, Dolmen mall, Clifton is located in one of the most posh areas of the city. This means exorbitant rents compared to other market areas. Secondly, it is not easy to rent a shop at Dolmen because they are currently at 96.7% occupancy according to Dolmen City Reit’s latest quarterly report from September 2022. Considering the current inflation, it seems fair to ask why Ethnic chose this location to launch their custom studio?

Well, firstly due to the popularity of Dolmen and its internal marketing efforts, which draw people into the mall, retailers are indirectly benefited. According to Dolmen City Reit’s annual financial report, their tenancy strategy is “focused on encouraging footfall and retail spending through selecting tenants that help each other increase sales by creating shopping/ purchasing synergies.” This results in better overall sales volumes from mall operations.

According to their latest quarterly report from September 2022, Dolmen City has been “bustling with healthy footfall” during the quarter in review. In their annual report for the fiscal year ended in June 2022, the average monthly footfall was 585,085 visitors compared with 535,714 visitors in FY21. Dolmen estimated an average of 7.021 Million visitors during FY22 compared to 6.43 Million visitors in FY21. These figures entail that we are slowly reaching pre-pandemic levels of footfall, despite the

consistently rising inflation. When the mall is able to draw in a good amount of visitors, stores within the mall are also able to welcome a better overall consumer traffic, so Ethnic choosing this location makes complete sense.

Secondly, you need to keep up with your competitors. We have all heard the saying keep your friends close and your enemies closer. Khaadi Corporation Pvt. Limited is the parent company to three retail brands namely, Khaadi, Chapter 2 and Kanteen. They employ a business model that does not simply focus on product, but the overall experience of being a customer at Khaadi, a model that has worked very well. Looks like Ethnic is also imitating a similar model. Khaadi’s Founder and Ceo Shamoon Sultan in an Instagram post suggested that, “Imitation is the sincerest form of flattery”. Could this be a direct diss at Ethnic because it sure looks like it.

But is Ethnic even competing with Khaadi? Well, according to industry sources, both brands generate a revenue of roughly Rs. 15 billion from just their prêt collections, which puts them in direct competition. Profit asked Iftikhar to comment on this to which she replied “I wouldn't say that we are following what other brands are doing because we have our own identity. So, we will expand the way we want to expand. The custom studio is our new experiment in that direction. I will not say that we are not expanding into home textiles because you never know, but to answer your question we will not be following hard and fast rules. Just because khaadi is doing something we will also do it.”

Even though they deny any claims to similarity with Khaadi, there is only one other retailer with an experience store, so whether they like it or not they are competitors. Will they be as successful in this endeavor as the predecessors of this emerging trend in Pakistan? Only time can tell. n

Understanding the benchmark KSE100 index

By Muhammad Raafay Khan

henever there is a need to mention the stock market in Pakistan, news media outlets toss out the term ‘KSE100’ and expect everyone to automatically understand it. Truth be told, most don’t and no one bothers to explain it.

To the uninitiated, the KSE100 is some sort of a creature which falls down, takes a beating, and every now and then straightens up only to come crashing down again. The

term is elusive; important but complicated.

WThis has gone on for far too long. And so we thought, perhaps, we could attempt to try to understand it together.

Indexes and the KSE100

A stock market index is essentially a tracker, a way to measure how a certain group of stocks from an industry or industries are performing in the stock market at any given time. They can include 10, 100, 500 or even all of the stocks in the stock market. The most famous index in the world is the S&P 500 index, which tracks the share prices of the 500 largest public companies in the United States of America.

At home in the Pakistan Stock Exchange (PSX), the equivalent of the S&P 500 is the KSE100 index.

The index comprises 100 companies selected on the basis of sector representation and highest free-float capitalisation or cap (we’ll explain this in a bit), which captures around 80% of the total free-float capitalisation of the companies listed on the exchange. Out of the total 36 sectors on the PSX, 35 companies are selected i.e. the company from each sector with the largest free-float market cap (excluding Open-End Mutual Fund Sector) and the remaining 65 companies are selected on the basis of largest free-float capitalisation

What are the dynamics and technicalities behind the benchmark index of the PSX?

in descending order. The KSE100 is a total return index, meaning that it adjusts itself for dividends, bonus and rights issues.

The primary objective of the KSE100 index is to have a benchmark by which the stock-price performance can be compared with one’s investment portfolio over a period of time. In particular, the KSE100 is designed to provide investors with a sense of how the Pakistan equity market is performing. Thus, the KSE100 is similar to other indicators that track various sectors of the Pakistan economic activity such as the gross national product, consumer price index, and so on.

The KSE100 Index was introduced in November 1991 with a base value of 1,000 points. Until 2012, the total market cap was

used to select the 100 companies for the index. But in 2012, this was changed to select companies based on only the free-float market cap. This change was brought into effect from October 15, 2012. Now, we have the recomposed KSE100 Index based on free-float market cap instead of total market cap.

The total market cap is the total market value of a company calculated as the current market price of the company’s share multiplied by the total number of outstanding shares of the company. But note that the market cap of the company is not the most accurate representation of that company’s worth on the exchange. This is because of something called the free float. The free float represents the portion of shares available on the exchange for actual trading in the market. So while a company may have the highest market cap in total, if it is only trading 5% or 10% of its shares on the PSX, then that is the yardstick by which it will be included in the KSE100 index.

The free float means the proportion of total shares issued by a company that are readily available for trading at the Stock Exchange. It generally excludes the shares held by controlling directors, sponsors, promoters, government and other locked-in shares not available for trading in the normal course.

Because of its general representation of the stock market, the KSE100 index is often used as a benchmark against which investors compare their returns. If an investment portfolio gives a higher return than the KSE100, it is considered a decent portfolio performance and vice versa if the portfolio loses against the KSE100.

Historic performance of the KSE100

At the start of 2022, last year, the KSE100 index was at 44,000 index points. By the end of the year, the index had lost more than 4,000

points to close at just below 40,000. This was a negative return of -10%.

According to research by Topline Securities, the losing streak of the KSE100 index in 2022 made PSX the worst performing asset class across a number of assets. It gave worse returns than gold, property, bonds, T-bills, bank deposits, etc. If anyone had invested Rs 100,000 in the KSE100 index at the start of 2022, the value of that investment would have been Rs 90,000 by the end of the year.

On the other hand, since gold posted a return of 40% in the same year, if someone had invested the same amount in gold, the total value of that investment would have been Rs 140,000.

If we take a step back, however, and look at the KSE100 index returns over a longer time period, we see that the KSE100 index performed much better historically for a 12 year period. At the start of 2010, the KSE100 was at 10,000 points. By 2022, the index was at 40,000. This is a significant return of 300% in 12 years. If this was a 10year period, the return would have been the same.

However, if we only add the first three months of 2020 into the 10-year picture, making our time period a total of 10 years and three months, we see that the index lost over 10% of its worth from the start of 2020 due to the COVID pandemic. So a particular period of time is the most important factor when comparing the KSE100 performance.

All in all, most analysts believe that the stock market gives a positive return in the long term. Beginners in the market often think that beating the KSE100 is an easy task but more experienced PSX investors will tell you that it is no simple feat. And instead of trying to come up with an original portfolio that might beat it, sometimes it is simply better to just invest in the index.

KSE100 versus stocks in 2022

While the KSE100 index is an important indicator of how PSX is performing, many prefer to invest in the individual company’s stocks. Let’s focus on four companies in the KSE100 for 2022 to make it clear to readers how different stocks can offer different returns. From this comparison we will see that some companies got the better of the KSE100 index, while others lost to it.

<Insert KSE100 stocks comparison chart>

The KSE100 stock market comparison chart shows the performance of the KSE100 index and four other stocks in the year 2022 (give or take a few days). The four companies’ stocks we chose to compare are Engro

Corporation Limited (ENGRO), Systems Limited (SYS), Mari Petroleum Company Limited (MARI), and Lotte Chemical Pakistan Limited (LOTCHEM).

These four have different weightage and impact on the index. The weights represent the position of the company in the index according to their free-float market cap. ENGRO and SYS are the two biggest companies on the index right now which form 5.8% and 5.4% weight of the index respectively. MARI comes at number 15 with a weight of 2.66%. And finally LOTC comes at number 35 with an index weightage of 0.64%.

The KSE100 index posted a return of -8% while ENGRO approximately gave a return of 2%. ENGRO beat the index by almost 10%. However, if we look at the

second biggest stock on the index, SYS, we see that its total return was -37%, making it a loser compared to the KSE100 index by almost 30%.

MARI gave a total return of -5%, beating the KSE100 by a marginal 3-4%, but still giving a negative return; a winner in comparison but a loser on its own. Lastly, if we look at LOTC, it gave a total return of 98%, beating the index by giving an over 105% return, a clear winner in 2022 (hurrah).

The aim of an investor is to select a portfolio of stocks which can give a better return than the KSE100, which essentially means beating the market. But in this selection of stocks lies the ultimate challenge for PSX investors.

The KSE100 index represents a selection of 100 stocks in the PSX. It is used as a benchmark index against which investors compare their portfolios. If a portfolio beats the index, it is generally considered a good return. Most investors aim to beat it but only few actually manage to do so. The KSE100 posted a negative return of -10% in the year 2022, making PSX one of the worst performers across different asset classes. But in the longer term (10+ years), the KSE100 has historically given returns of over 100%, making the PSX a viable avenue for investment. n

Author’s disclaimer: This article is not meant as an investment advice.

TTP to wind up commercial activities by 8:30pm and dinner functions by 10:00pm: Kh Asif

By The Dependent

The proscribed Tehrik e Taliban Pakistan (TTP) will have to play by the rules when it comes to the implementation of the government’s new energy conservation policies.

“We have told them clearly that all commercial activities, whether it is kidnapping-for-ransom or smuggling, shall have to wind down everyday by 8:30 pm,” said defence minister Khwaja Asif in a press conference. “And their banquets and dinners have to end by 10:00pm.”

“I had said about our Taliban brother that others have the powers but they have God,” said the defence minister, referencing his tweet when the Taliban took over Kabul in 2020. “Well, now they have deadlines as well.”

“Look, we have been very accommodating towards the student militia. The least they can do in return is respect our timings and eat us last.”

Khawaja Asif told journalists that measures approved by the cabinet aim to save the cash-strapped country about Rs62 billion ($273.4 million) and help reduce the energy import bill.