Pakistan Economy: Current Account gives a green light to Macro Consolidation
- Latest SBP data on external account show marked improvement in the current account balance, with the country running a current account surplus of US$99mn in Oct’19 after 49months compared to CAD of US$284mn in the preceding month and US$1,280mn in Oct’18.
- Encouragingly, unlike the past few months where YoY deficit reduction was primarily import led, the Oct’19 improvement in current account balance was driven both by i) export growth (+10%YoY) and ii) import contraction (-21%YoY).
- While the current account balance improved sequentially (CA surplus of US$99mn in Oct’19 vs. CA deficit of US$284mn in Sep’19), the underlying trends (goods/services imports: up 9%/34%MoM) seem to suggest the course correction has reached its bottom, thus sustainability of current trend is highly dependent on exports and remittances.
- The actual monthly CAD run rate of US$368mn in 4MFY20 remains significantly below our earlier expectations of US$616 per month. At this rate, full-year CAD would be around US$4.42bn (1.7% of GDP) well below the GoP’s target of 3% of GDP and the IMF’s projection of 2.6% of GDP. We look forward to detailed trade data to revise our full CAD estimate of US$7.39bn (2.9% of 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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