The restive Pakistani megacity of Karachi, where political parties, criminal gangs and extremist groups vie for control, is also home to one of the world's best-performing stockmarkets. The Karachi Stock Exchange (kse) has risen by 40% in local-currency terms so far this year-of the stockmarkets tracked by The Economist, only Japan's has performed better. The kse sizzled last year, too, posting a gain of 49%. Some of this reflects the country's potential. Pakistan's prospects have been buoyed by the election in May, the first time a fairly elected civilian government served a full term and handed over to another. A new imf loan was secured in July. The kse's rise also reflects investors' enthusiasm for "frontier markets", the world's wilder bourses. More familiar emerging markets have lost momentum recently, but the msci frontier-markets index has kept climbing.
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