Pakistan upgraded

Moody’s upgraded Pakistan’s credit rating by a notch last week. It surprised many. There has been no visible change in their political or economic stability. To the ordinary person, the justifications put out by Moody’s did not appear very persuasive. So, we are left guessing as to what drove the upgrade. Another source reinforces our scepticism.

A ‘promotional’ research note put out by Nikko Asset Management touts their application of Eurasia’s political risk index to their asset allocation strategy for emerging markets. The note (white paper) came as a free download from one of the sites that I visited. In that white paper, the Eurasia Global Political Risk Index is presented in chart 5 and, among the sample of emerging markets whose political risk score is presented there, Pakistan comes last (worst). There is a total of 30 countries. India is in the middle (14th place). The report is dated April 2015.

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