Pakistan Strategy_ Ease-off in commodities strengthening Pakistan's case, (AKD Daily, Nov 29, 2021)
AKD Daily
Pakistan Strategy: Ease-off in commodities strengthening Pakistan’s case
- Since COVID struck a year and a half ago causing widespread disruptions and bringing global economies to a screeching halt, many variants have come to light with the latest inclusion being the ‘Omicron’ with center being Southern Africa. This comes at a time when EU is bracing for another tough winter both in terms of intensity and social costs with surge in COVID ‘Delta variant’ cases triggering discussions for lockdown.
- These developments have spooked Commodity prices with Oil (Brent) spiraling down 9.4% to US$74.5/bbl — the lowest since Aug’21. While the breather could be short-term, however, possible continuation of measures to clip growth across the globe could put fetters on a longer-term price trend in our view.
- This makes Pakistan's top-down case attractive where a 5% drop in oil price translates into US$700mn import savings while moderating pressure on exchange rate, and a 60bps impact on monthly inflation. It further allows the Govt. to meet its PDL target through upfront higher adjustments in our view.
- From sectoral vantage, we advise shift to Power and select OMCs (PSO) on circular debt payments, from Textiles (on risks to demand outlook in EU). Other recommendations remain intact where we like Banks (on monetary tightening though a more gradual path cannot be ruled out given fluid dynamics) and Cements (easing coal prices improve earnings outlook of the sector).
AKD Research
Pakistan State Oil is a petroleum group based in Pakistan. Co.'s principal activities are the procurement, storage and marketing of petroleum and related products. Co. also blends and markets various kinds of lubricating oils.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.