Pakistan Economy: CAD starts responding to Stabilization measures
Latest numbers on external account show marked improvement in CAD, with Jan’19 deficit significantly narrowing by 54%YoY/48%MoM to US$809mn. Importantly, reduction in deficit was primarily driven by trade balance, particularly import led, signifying weakness in aggregate demand.
Encouragingly, trade deficit narrowed 30%YoY/21%MoM to US$2,310mn, courtesy secular decline in imports (-12%YoY/-6%MoM). Exports including both goods & services also surged 9%YoY/12%MoM to US$2,309mn owing to volumetric gains.
Overall, 7MFY19 CAD now stands 17%YoY lower at US$8,424mn vs. US$10,124mn in 7MFY18, averaging US$1.20bn per month vs. US$1.45bn per month in FY18.
We expect a more pronounced impact of domestic demand contraction on CAD in the remaining FY19 and estimate full year CAD to round up at US$14.05bn (5.0% of the GDP).
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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