Pakistan Economy: For inflation, downward trajectory maintained , (AKD Daily, Jun 22, 2020)
AKD Daily
Pakistan Economy: For inflation, downward trajectory maintained
- Headline inflation is expected to continue its downward trajectory in Jun’20, with another round of reduction in domestic POL product prices being the core driver, pulling inflation lower.
- We estimate monthly reading for Jun’20 at 8.12%YoY vs. 8.23%YoY in the last month and 8.0%YoY in Jun’19. Sequentially, the index is likely to move up 0.4%MoM vs. 0.32%MoM in May’20.
- Despite a seasonal decline in prices of fresh vegetables and fruits, food inflation is likely to increase to 13.25%YoY (vs. 12.24%YoY in the preceding month) on account of mean reversion in certain perishables (i.e. eggs & tomatoes) and surge in wheat prices following shortage of the commodity.
- Near term inflationary backdrop remains benign due to low oil prices and weak consumption activity, with no new taxation measures in FY21 budget further reinforcing the soft outlook. Ambitious fiscal targets and potential locust outbreak are two key risks to the outlook.
- On monetary policy, lack of fiscal stimulus coupled with benign inflationary backdrop could push SBP for a balancing act, where we expect it to further reduce the policy rate by 100bps.
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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