Report
Ali Asghar Poonawala ...
  • Umer Farooq
EUR 8.92 For Business Accounts Only

Monetary Policy: Corona calls for extraordinary response, (AKD Daily, Mar 17, 2020)

AKD Daily

Monetary Policy: Corona calls for extraordinary response

  • Adhering to the age old axiom, ‘extraordinary times call for extraordinary measures’, Central Banks globally are aggressively slashing rates to mitigate economic adversity arising from the cratering of demand following COVID-19 pandemic
  • Yesterday’s sharp rise in the number of confirmed cases at home (134 new cases, taking total to 187) has brought a sense of urgency to elicit a strong policy response both monetary and otherwise (augmenting health care systems) and prompt the impulse for panic buying, stressing inventories. For an economy already in the midst of a slowdown, further downsides are apparent.
  • Our correspondence with industry players also indicates a potential slowdown. Exporters are facing delay or cancellation in orders from clients, particularly the EU, while the impact of supply disruptions particularly from China are likely to take effect in the next few weeks
  • With visible slowdown in economic activities and potential for the private sector to face heightened stress, the SBP can deviate from its monetary policy framework of inflation targeting through an aggressive rate cut of 150bps or more.
  • Our base case sees headline inflation averaging 10.3%YoY in the next four months (incl. Mar’20), with the monthly reading declining to 9.6%YoY by Jun’20. For Mar’20, we estimate headline inflation to clock in at 10.88%YoY vs. 12.40% in Feb’20 and 8.60%YoY in Mar’19. The expected decline in inflation comes from i) high base effect, ii) declining food prices and iii) lower gov’t administered fuel prices.

AKD Research

Provider
AKD Securities Limited
AKD Securities Limited

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.

Analysts
Ali Asghar Poonawala

Umer Farooq

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