Pakistan Commodities_Return to sanity on the horizon, (AKD Daily, Jan 10, 2020)
Pakistan Commodities Return to sanity on the horizon
- 2019 ended on a relatively strong footing with a meagre manufacturing revival, clarity over Brexit and mellowing US-China trade tensions provided support to commodity markets, indicated by the TRJ Index rising 5.2%MoM during Dec’19.
- Energy (Brent/Arab Light prices up 8.3/3.6%MoM) have rallied, driven by announced extension in supply cuts by OPEC+ nations. Meanwhile global growth metrics and adherence to supply cuts will guide the narrative for markets into CY20. Coal prices (up 4.5%MoM) are expected to witness a sequential decline, amid seasonal slowdown.
- While energy prices cooling off post easing tensions in the Middle East, as well as PkR stability are welcome signs, rising international commodity prices of cotton (1.6%MoM) and scrap steel (+11%MoM) will likely counter the positive impact for textile and steel players at home.
- Within Chemical sector, declines in international urea and DAP price pose negative implication for the local players, which will struggle to pass-on cost inflation. On the other hand, excess global ethylene capacity keeping PVC ethylene margins healthy should bode well for local PVC producer (EPCL).
AKD Research
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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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