Pakistan Commodities_The start of commodity ease off, (AKD Daily, Dec 16, 2021)
AKD Daily
Pakistan Commodities: The start of commodity ease off
- TRJ Commodity Index has recorded its steepest decline in 20 months in Nov’21 — down 7.8%MoM vs. 3.8%MoM uptick in Oct’21 — as threat of Omicron and the coldest winter in western hemisphere catalyzed COVID spread, eliciting partial-to-complete lockdowns in various countries.
- Commodities are expected to incur bearish trend in the medium run exacerbated by higher inflationary pressures around the globe normalizing demand, improving supply chains as travel increases (Malaysia recently withdrew restrictions on Bangladeshi workers) and importantly, roll-back of growth stimulus by major economies.
- US Fed yesterday announced an end to pandemic-era policy support, halting bond purchases in Mar’22 followed by rate increase of cumulative 0.90% in CY22. This pushed dollar index shooting to a high of 96.81 with past one week gains standing at 0.4% where a stronger dollar should weaken commodities in the medium run.
- From Pakistan’s vantage, weaker commodities should improve macro outlook in near-to-medium run. This should boost risk appetite of investors in the equities market where cheap valuations (CY22 P/E: 4.5x) would be driving market performance in the medium run, in our view.
AKD Research
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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