I've started tracking the number of listings on Zameen as a...

I've started tracking the number of listings on Zameen as a leading indicator for revenue growth.

Aside from the difference between a "crore" and a "lakh", a perusal of Zameen and its competitors reveals a number of interesting things about the Pakistani property market. One of these is that it is comprised of numerous smaller sub-markets that grow at different rates, and in which different property websites have varying degrees of relative strength. Think REA in Victoria vs Domain in NSW.

For example, over the last 4 weeks the number of Karachi buy listings on Zameen grew at an average of 1.68% per week (138% annualised) whereas in Islamabad the average growth was "only" 0.3% per week (17% annualised).



In terms of market share, Zameen currently enjoys roughly 2:1 advantage in Karachi over its nearest competitor (prop.pk), whereas in Islamabad the difference is more like 55/45. Given its better user interface (IMO), market share advantage and attendant network effects, we should expect to see Zameen extend its lead in every market. Its performance in the markets where it's weakest is key - if Zameen starts to dominate there, then it will be game over for the competition. Conversely, the chink in Zameen's armour is those markets, A reversal in Islamabad, for example, would be an early warning sign that Zameen's position as overall market leader is under threat.

Overall, the listings data from the start to this year suggest Q1 shaping as a good one for Zameen. My prognosis for FDV's aggregate portfolio being profitable by Q3 this year relies on Zameen averaging 30% annual revenue growth, and the data suggest that this is very conservative.

So having put the bull case I should point out some negatives with FDV, which are principally to do with the way it reports to shareholders:

- The tendency of quarterly reports to pick out two or three holdings that performed well, and put a positive spin on the company as a whole. In the next quarter the same holdings are completely ignored if there is a reversal, and another two or three picked out as highlights. I'd rather see warts-and-all disclosure from management, highlighting also the challenges faced by the businesses.

- Shaun's inability in the conference call to state which 4 companies traded profitably in Q4 2018 was very odd. Aside from that being one of the headline claims in the investor briefing, you'd think a CEO with a large amount of his personal capital tied up in the enterprise would have intimate knowledge of every one of FDV's holdings and very easily answer that question.