Pakistan Strategy_FATF Review - a non event for the market, (AKD Daily, Oct 22, 2021)
AKD Daily
Pakistan Strategy: FATF Review - a nonevent for the market
- FATF in an unsurprising move has retained Pakistan amongst Jurisdictions under Increased Monitoring, commonly known as the “Grey List”. The message was similar to previous ones of encouragement on reforms undertaken by the authorities while calling the Govt. to meet extended requirements.
- At present, Pakistan is compliant on 26 out of 27 counts on the initial action plan set in Jun’18, while in an unparalleled swiftness has achieved progress on 4 out of 7 directives delivered in the previous meeting. The focus has now clearly shifted towards demonstration of implementation of TF and ML laws, in our view.
- As per the FATF standards, Pakistan seems to have achieved compliance with majority of the 40 recommendations under MER Evaluation Criteria opening up prospects for improvement in effectiveness ranking. Hence, a strong possibility exists in our view for Pakistan to elevate itself from the existing group in the medium run, benchmarking our timeline to recent up-gradation of Mauritius.
- We see the latest FATF review to be a non-event for the market with all eyes set on ongoing IMF review defining the tone of the market in the near term. We advise accumulation in Banks (on monetary tightening due to be realized going forward) followed by Construction sector (on possible normalization in input costs with upbeat demand) and Textiles (on currency devaluation).
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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.
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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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