FY19 Budget Preview: Proposals & Implications
Considering the ongoing election year, populist measures are likely to take precedence over fiscal discipline in the incoming budget, due to be presented on Friday (Apr 27'18). Moving ahead with its growth agenda, the government has set an ambitious GDP growth target of 6.2% for FY19F – the highest in last 13 yrs. Relief in the form of proposed tax cutbacks (lower income tax rates, increase in pension allocation) is expected, however fiscal indiscipline will continue to be at play despite higher revenue collection target (set at PkR4.44tn). Keeping this in mind, a potential cut in PSDP allocation to PkR750bn has been proposed by the MoF (vs. PkR1.0trn in FY18B) that is likley to restrict growth prospects. For capital markets, incoming PSX proposals including: 1) rationalization of CGT, 2) tax removal/reduction on issuance of bonus shares, 3) reduction in corporate tax rate for listed companies, 4) increase in tax credit on enlistment of companies entail positive implications, aimed to increase market depth. Specifically, we feel export sectors will continue to be in the limelight where relief measures can be further extended (positive for Textiles), while Fertilizers and Banks can also benefit from possible reduction in cost base and positive tax adjustments respectively.
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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