Pakistan Economy_Aug'21 inflation to clock in at 8.35%YoY, (AKD Daily, Aug 31, 2021)
AKD Daily
Pakistan Economy_Aug’21 inflation to clock in at 8.35%YoY
- Inflation for Aug’21 is likely to clock in at 8.35%YoY compared to 8.40%YoY in Jul’21. On a monthly basis, inflation is likely to stand at +0.58%MoM (Urban/Rural: 0.53%MoM/0.67%MoM) as build up in prices across all segments was partially countered by flattish food inflation (down 0.08%MoM vis-à-vis 1.74%MoM uptick in Jul’21 partly attributable to seasonal factors).
- Inflation for FY22 is expected to be recorded at 8.1% where in our base case we have assumed govt. to collect ~58% of the targeted petroleum levy of PkR600bn at an avg. oil price of US$65/bbl, while given limited visibility on IMF mandated utility adjustments (pending adjustments amount to PkR5.65/unit, as per news flows), 5% hike in electricity prices is incorporated in Oct’21 and Nov’21 each.
- While inflation has been put on back-burner on deciding on the monetary course, pressure on exchange rate (partially as a result of exogenous developments) might prompt the Central Bank to begin monetary tightening earlier than expected. However, any rate increase would be gradual which is unlikely to significantly alter current set of fundamentals.
- We continue to prefer thematic plays including Cements, Steel, Construction-Allied, Textiles, and Techs.
AKD Research
National Bank of Pakistan (the Bank) is a Pakistan-based commercial bank. The Bank provides commercial banking services, including commercial loans, investment advisory, asset management, global remittances, agency services, forex, leasing, modarba, underwriting, brokerage, and other banking and financial services. The Bank offers retail products, which include saving deposits, current deposits, housing finance, personal loans and agricultural loans; transaction banking services, which include cash management, trade finance and services, and remittance management; Corporate Finance services, which include deposits, structured corporate finance, capital advisory, investment advisory and trade finance; Treasury services, which include forex and financial derivatives, and government to person (G2P) services, which include pension payments, tax and fee collection, and other payments. The Bank serves its customers in over 20 countries.
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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