Pakistan Economy_Inflation for Dec'21 to stand at 12.9%YoY, (AKD Daily, Dec 30, 2021)
AKD Daily
Pakistan Economy: Inflation for Dec’21 to stand at 12.9%YoY
- Inflation for the month of Dec’21 is likely to stand at 12.9% vs. 11.5% in the previous month — the fifth consecutive month of continuous increase in curve, bringing CY21 to close at 9.5%, on a similar scale to last year. On a sequential basis, inflation is likely to trend at 0.5% in Dec’21 compared to 3.0% in Nov’21.
- In our base case, we expect inflation for FY22 at 11.3% with the authorities likely recording double digit readings in the remainder of the year (2HFY22 avg. 12.3%YoY/0.5%MoM). However, our estimates are subject to great uncertainty with risks tilted towards the upside, on lack of clarity on the reforms mandated under the IMF program (read sales tax amendments), commodities price trends, and Rabi crop produce.
- Market performance is expected to remain sideways until Pakistan formally comes under the watch of IMF with short kicks being triggered by downward trending commodities (read coal). The resumption of IMF program would provide much needed thrust to market in our view which would put Pakistan’s macro issues on backburner.
- In this backdrop, we favor value to growth where our preferred sectors include Banks (on monetary tightening) and Construction-Allied (ala cements and steel due to strong private sector demand).
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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