Pakistan Economy: Jul'18 CPI inflation expected at 6.0%YoY
With base effect kicking in, headline inflation in Jul'18 is expected to reach 6.0%YoY vs. 2.9%YoY/5.2%YoY in Jul'17/Jun'18. On MoM basis inflation is expected to rise 1.09%MoM vs. 0.57%MoM in the previous month, primarily on account of: 1) enhanced FED on cigarettes to take effect, 2) uptick in perishable food items (food index up 0.9%MoM), 3) seasonal uptick in house rent and 4) rise in fuel prices (MOGAS/HSD increased by 9.4%/14.9%). Additionally, NFNE inflation is likely to clock in at 7.2%YoY vs. 5.6%YoY/7.1%YoY in Jul'17/Jun'18. With inflation on an upward trajectory, we revise upward our inflation estimates while incorporating recent CPI readings and currency volatility. In this regard, we estimate inflation to average out at 6.8%YoY in FY19F (previously 6.2%YoY). Subsequently, SBP is likely to continue maintaining its aggressive stance (100bps hike in Jul'18) in setting the interest rates, where in our view another +175bps hike remains on the table in FY19F with TR/DR ending at 9.25%/9.75.
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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