This study examines the impact of analysts’ recommendations on stock prices listed on the Karachi Stock Exchange for the period 2006–12. The recommendations are extracted from the daily Morning Shout report published by Khadim Ali Shah Bukhari Securities Ltd (KASB), which provides buy and sell recommendations for different stocks. We use the market model to estimate the abnormal returns around the recommendation dates for these securities. The study also investigates whether the abnormal returns are due to price pressure or information content. We find that investors earn abnormal returns on the basis of analysts’ recommendations for these securities. The results are robust in considering only the sub-sample subsequent to 2008’s global financial crisis, and are also consistent with the information content hypothesis and price pressure hypothesis.
KEYWORDS: Analysts’ recommendations, information content, price pressure, abnormal returns, market efficiency, Pakistan.
JEL: G14, G24.

This empirical study examines the effects of terms-of-trade (TOT) volatility on inflation in Pakistan, using annual data for the period 1972 to 2012. The results show that TOT volatility has a significant negative effect on inflation in Pakistan. This result is robust to alternative equation specifications and TOT volatility measures. Output growth has a negative effect on inflation while foreign export prices have a positive effect on inflation. Both the depreciation of the nominal exchange rate and money supply increase the inflation rate. The fiscal deficit and world oil prices are also found to increase domestic inflation.
KEYWORDS: Terms of trade, inflation, Pakistan.
JEL: E31, F41.

This study investigates the empirical relationship between spot and forward exchange rate efficiency with reference to Pakistan and the efficiency of its foreign exchange market. We use monthly data from the State Bank of Pakistan and KIBOR rates for the period July 2006 to December 2013. Our results indicate that the forward exchange rate does not fully reflect all the information available. Market players may gain the benefits of volatility speculation due to market inefficiency. Pakistan’s foreign exchange market is still small compared to those of other emerging economies, implying that substantial policy work is required.
KEYWORDS: Foreign exchange markets, forward exchange rate efficiency, efficient market hypothesis, emerging economy, real effective exchange rate, Pakistan.
JEL: F31, G10, F30.

The Center for Research in Economics and Business (CREB) of the Lahore School of Economics, hosted the Seventh Annual Conference on the Management of the Pakistan Economy from May 4th – May 6th, 2011 and the theme of this year’s conference was ‘Financial Sector Development and Management’. Since Pakistan has undergone significant economic and financial changes over the last decade, the objective of the conference was to present an overview of the Pakistan economy and then focus on financial sector management and monetary management issues facing Pakistan.
KEYWORDS: Pakistan, Lahore School, Annual Conference, Pakistan economy, CREB, seventh.
JEL: N/A.