Pakistan Strategy: Agriculture Policy A step in the right direction
- The recently announced PkR309bn agriculture package - with emphasis on improving crop yields, livestock development and import substitution - is a step in the right direction. Reportedly, the share of Federal gov’t is PKR85bn, Provincial governments would contribute PKR175bn and share of farmers would be PKR50bn.
- Even assuming a haircut, this could still imply double the agricultural spending than in last 9 years on average. Out of the allocated funds, 7% is planned to be targeted towards increasing the average yield of wheat and sugar by 21/23%, respectively (account for 55% of Fertilizer consumption in Pakistan). The aforementioned development, if materializes, could result in improved fertilizer offtake amid better demand and potential subsidies.
- The agriculture development plan would likely entail higher agricultural financing target (FY18/19: 12.7/15.1% of nominal agri GDP vs. 7.5% avg. FY06-17). Likely beneficiary of higher demand could be the Islamic Banks considering potentially slower financing demand elsewhere (Agri financing has increased by 2.65x in 11MFY19 for IBs vs. 10.4% growth recorded by conventional banks).
- The successful implementation might also provide some respite to the dull infrastructure demand where cement and steel demand in rural Punjab will be a key beneficiary assuming the increased spending will result in improved purchasing power of farmers.
AKD Research
Fauji Fertilizer Bin Qasim Limited is a Pakistan-based holding company. The Company manufactures, purchases and markets fertilizers. It is involved in meat, dairy and coal based energy generation sectors. It has identified its potential business segments and has undertaken investments in the areas of food, financial, power sector and wind energy projects. Its products include Granular Urea, such as Sona Urea, and Di Ammonium Phosphate (DAP), such as Sona DAP. Sona Urea is a synthetic organic compound containing nitrogen in amide form available in the form of white solid prills. It is applied to soil and also suitable in solution form as spray application. Sona DAP contains nutrient element, phosphorous besides nitrogen available in flowing granular form Granules are stronger, harder and of uniform size. It is suitable for various crops and soils recommended for initial application. It produces over 791,260 metric tons (MT) of DAP and approximately 433,610 MT of Urea.
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.
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