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Pakistan Strategy: Pakistan Outlook 2021 based on Topline Poll

• Topline Securities conducted a poll during the first week of Dec-2020 of over 50 top funds managers and corporates, asking range of questions on their expectations of the economy and the equity market for the upcoming year.
• Around 65% of the survey were fund managers, where the remaining participants belonged to the Pakistan corporate sector from sectors like Banks, Oil and Gas, Cements, Steel, Autos etc.
• The excerpts of the survey were published in our detailed report titled ‘Pak Strategy: A year of economic stabilization, Index likely to reach 52,500’ published on December 10, 2020.
• The survey participants largely expect economy to consolidate/stabilize in the upcoming year. Few of the key observations were:
• There are no changes expected in the Pakistan political setup in 2021
• Pakistan is expected to re-enter the IMF program in 2021
• GDP growth is expected between 1.1-2.0% in FY21
• PKR/USD is likely to close between 160-165 by Dec-2021
• Inflation is anticipated to average between 8.5-9.0% in FY21
• Monetary tightening is likely to begin in May-2021, with an anticipated increase of 75-100bps in the Policy Rate during 2021
• KSE-100 index is likely to close between 45k-50k by Dec-2021
• Net foreign corporate selling is likely to continue in 2021
• Cements and Banks are likely to outperform during 2021

E&Ps and Autos are expected to underperform during 2021