Source: Graana.com
As an overseas Pakistani, you may have come across the importance of saving and investing money in Pakistan, but the specifics of where to start might elude you. Financial situations vary widely—some contend with debts, others struggle to make enough to save, and some grapple with spending habits beyond their control.
Waiting for a windfall to kickstart your investment journey is unrealistic and conducive to near-future financial growth. Decades ago, investment options were scarce. However, with time and improved living standards, individuals are more inclined to increase their wealth.
To achieve this, one must engage in some form of investment. Making informed choices about investing requires knowledge of available options and the returns associated with various assets.
In this blog, Graana.com discusses some of the best investment options you have in Pakistan as an overseas Pakistani.
Real estate stands out as the preferred and time-honoured investment avenue for most individuals in Pakistan. Pakistani residents and overseas Pakistanis can benefit from real estate investment. Those with sufficient capital often choose to invest in property, drawn by the promise of attractive and consistent returns.
This investment strategy operates on the bedrock of economic fundamentals, with a burgeoning population and limited living space worldwide contributing to a sustained demand-supply gap.
Both commercial and residential properties have proven to yield substantial returns. The market presents an exceptionally favourable landscape with many options for first-time homebuyers seeking apartments in Islamabad. Moreover, real estate also serves as a great hedge against inflation.
While real estate investments typically deliver lucrative returns, they demand considerable patience as the profits materialise over a span of five to ten years. Property professionals assert that individuals inclined toward a conservative mindset favour real estate due to its perceived stability as an asset.
Moreover, the real estate sector has demonstrated significant profits over the past decade compared to alternative investment avenues. Despite the evolving investment landscape, real estate remains the most compatible domain for those seeking stable returns.
You might be thinking about what the best real estate investment options in Pakistan would be. The industry has been booming in Pakistan for the last couple of years, so there are many opportunities in the country.
IMARAT Residences, developed by the IMARAT Group, introduces Smart Living for the first time in Pakistan. A crucial element of the IMARAT Business District, IMARAT Residences is intricately connected to the focal point, the Mall of Imarat.
Featuring a micro-apartment model, IMARAT Residences offers a diverse array of amenities. The project is positioned strategically in the business district and contributes to the burgeoning economic activity. The prime location of IMARAT Residences bridges the gap between commercial and residential spheres, being in proximity to over 20 housing societies situated along the Islamabad Expressway in the twin cities. This project’s features make it a lucrative investment option for overseas Pakistanis.
The Golf Floras represent the inaugural luxury condominiums of their kind in Pakistan. As a flagship venture of the IMARAT Group, Golf Floras stands out with a comprehensive range of amenities, positioning it as a truly world-class residence.
Offering an infinity pool, cutting-edge fitness facilities, a rooftop helipad, sports amenities, and a stunning golf course set against the backdrop of the Flora hills, Golf Floras is elegantly nestled in the captivating capital city. This makes it the ultimate haven of luxury and comfort.
If you are unsure about investing a wholesome amount of money in real estate, Real Estate Investment Trusts are a good option. A Real Estate Investment Trust (REIT) is a security that operates similarly to a stock, channelling investments into real estate either directly or indirectly. REITs come in various types, including Equity REITs and Mortgage REITs. Equity REITs specifically invest in and possess properties, deriving revenue from rental income.
REITs enable small overseas Pakistani investors to invest indirectly in real estate, providing them with an opportunity they might not have had otherwise.
Investing in prize bonds is a straightforward and convenient method for managing your finances. They are hassle free, and come with the government’s endorsement, ensuring reimbursement to the rightful owner upon claim.
Prize bonds are available in various denominations, ranging from 100 to 50,000 rupees. This extensive range enables individuals to invest with as little as 100 rupees, a flexibility not commonly found in other investment options that often demand larger sums for better returns.
These bonds can be acquired from the State Bank of Pakistan, the National Savings Centre, and specific branches of commercial banks. Each bond is assigned a unique serial number, forming the basis for draws held every three months.
If you’re searching for a long-term investment that requires minimal involvement and no frequent monitoring, then opting for the stock market is the investment avenue you might find appealing. Investing in the stock market typically involves purchasing shares of a company you favour, and you can trade these shares as needed. While stock market investments come with inherent risks, they also offer numerous advantages to investors.
Furthermore, a nation’s stock market serves as a reflection of its economic health, indicating the prosperity of companies and contributing to the overall state of the economy. Over the long term, stock prices serve as indicators of a company’s profitability, which in turn is interpreted as a measure of overall economic performance.
The Pakistani stock market has a track record of yielding varying rates of return during both prosperous and challenging economic periods. While wise investments can lead to substantial gains, it’s crucial not to concentrate all your investments in one area, given the market’s inherent volatility.
Despite the associated risks, stocks remain a favoured investment choice for Pakistanis. According to a report from the Tribune newspaper, the number of Central Depository Company (CDC) accounts – the entity where shares are held in Pakistan – has increased over the past six years.
Presumably, the allure of significant returns outweighs the market’s extreme volatility, drawing individuals to this investment option. Nevertheless, investors should remain aware of the risks involved.
The realm of currencies shares similarities with the stock market, as their fluctuations are intertwined with the economic landscape, akin to stocks. There are two potential scenarios in the currency domain: a currency either strengthens or weakens against another. Initially, foreign exchange market participation was predominantly by companies and banks, but over time, there has been a notable increase in individual involvement in this form of trading.
The principles of supply and demand primarily steer currency variations. Currencies experiencing high demand witness elevated prices, while those in lower demand see a decrease. However, the dynamics of supply and demand are shaped by a country’s economic developments and political stability.
Investing in currencies introduces an element of risk yet concurrently offers investors an avenue to diversify their portfolios. Currency trading also serves as a hedge against fluctuations in exchange rates, providing a protective measure against adverse movements for many institutions.
The term “gold standard” is not arbitrary; it signifies the enduring value of gold. Unlike other commodities whose real worth may fluctuate, gold maintains its intrinsic value consistently. While the value of commodities like oil may diminish over time, especially as the world transitions to green energy, gold is poised to become increasingly valuable.
Investing in gold remains a perennial favourite for everyone. Let’s face it – it’s a secure and consistently rewarding investment. Whether you choose to buy gold coins or bars, both options prove effective. Gold is widely acknowledged as an excellent hedge against inflation, making it a prudent choice if you’re concerned about potential decreases in currency value.
Mutual funds offer the dual benefit of safeguarding money and generating profits over time. This investment avenue involves no individual trades or purchases. Typically accessible through investment firms and banks, mutual funds allow you to sell your shares at your discretion. However, exercising patience can prove rewarding, as the invested money not only returns but also accrues additional profits beyond the initial investment.
These funds typically provide lower rates, often with a rate of return below the inflation rate. However, senior citizens may experience a somewhat better rate of return. Despite the lower returns, it serves as a secure method to protect your money without exposing it to excessive risk.
Following are the most common questions and their answers for the best investment opportunities in Pakistan for overseas Pakistanis.
A: Overseas Pakistani investors have several promising options, including real estate, stocks, mutual funds, and government savings schemes.
A: Yes, real estate is a popular and stable investment choice. Cities like Islamabad, Lahore, and Karachi offer diverse opportunities, from residential to commercial properties.
A: The regulations are generally investor-friendly. However, it’s essential to be aware of legal requirements and consult with local experts for a smooth investment process.
A: Overseas Pakistanis can invest in the stock market through brokerage accounts, taking advantage of the market’s growth potential and diversification benefits.
A: Yes, government savings schemes are considered secure, offering various options like National Savings Certificates and Defense Savings Certificates.
A: Tax regulations may vary, and it’s advisable to understand the tax implications both in Pakistan and the country of residence. Seeking professional advice is recommended.
A: Mutual funds provide a managed and diversified investment option, allowing overseas Pakistanis to participate in the financial markets with professional portfolio management.
A: Yes, there are opportunities to invest in SMEs, either directly or through venture capital funds, supporting the growth of smaller businesses.
A: Keeping track of financial news, consulting with local investment advisors, and utilising online platforms can help overseas Pakistanis stay informed about market trends.
A: The government occasionally introduces initiatives to attract foreign investment. Staying updated on such incentives can benefit overseas Pakistanis looking to invest in the country.
To read about the comparison of gold, bank and real estate, visit Graana Blog.
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