Pakistan Economy: CAD remains elevated for May'18
Current account deficit for May'18 clocked in at US$1.93bn (marginally down 0.7%MoM) vs. US$1.95bn in the previous month. Rise in trade deficit to US$2.9bn (up 6.7%MoM) for the month was offset by a rebound in current transfer (up by US$337mn) and uptick in remittance inflows, recorded at US$1.77bn (reflecting growth of 7.3%MoM). Consequently, current account for 11MFY18 surged to US$15.96bn (vs. US$11.14bn in comparable period last year), surpassing the GoP target of US$15.3bn for full year FY18. The rise in CAD is primarily a function of growing trade deficit recording at US$27.94 (highest ever recorded), as import growth (+16.4%YoY) outpaced the growth in exports (13.2%YoY) while remittance showed marginal recovery (up 3.0%YoY). Consequently, SBP's FX reserves sharply fell to US$10.03bn by May-end (cumulative drawdown of US$6.1bn in 11MFY18) in the absence of any material inflows. Going forward, external account imbalance is likely to remain persistent in FY19F with CAD likely to record at 4.95% of GDP (US$16.3bn) considering higher oil imports (+16.8%YoY in FY19F). This together with chunky debt repayments (FY19F: US$7.5bn) during the year is expected to push gross external financing gap to US$20.7bn, according to our estimates.
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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