Pakistan Commodities: Mixed sentiments cut short commodity rally, (AKD Daily, Dec 10, 2019)
- Moderating global economic indicators coupled with relatively stable services and consumption growth has kept central bank action at the forefront, while commodity prices have remained sanguine, signified by the TRJ index softening by a minor clip (down 0.13%MoM)
- Through a series of missives between China and the US regarding a “phase-one deal”, trade pathways are largely re-orienting away from these heavyweights, as the EU gains prominence and global trading bodies such as the WTO lose in the evolving global trading order
- Energy commodities continued their climb higher, with crude prices rising (Brent/Arab Light price jumped 3.0/6.4%MoM) on expectations of OPEC+ deal to further supply cuts and Richard’s Bay coal jumped 14.1%MoM, where trading constraints, not fundamentals are driving up prices
- Chemicals remained a mixed bag, with oversupply in ethylene and paraxylene markets driving product deltas lower. Urea/Intl. DAP prices softened as well, hinting towards price pressure in local arena while food prices climbed higher, pushed by significant accretion in Meat and edible oil prices . CRC/HRC prices are up 4/6% since Oct’19 while scrap prices remain flat — positive for local players.
- With global geopolitical risks persisting through to 2020 (Brexit following this week’s elections, trade uncertainty, Hong Kong situation, US elections), commodity prices are expected to remain range bound, while moderating economic growth remains the norm. At home, pro-growth policies, coupled with expected loosening should re-ignite pent-up demand, where a constrained commodity picture could keep inflation in check, providing room to maneuver for both fiscal and monetary expansionism.
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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