Pakistan Economy: Twin Deficit remains imminent
Fiscal deficit for 1HFY18 clocked in at PkR796.3bn (~2.2% of GDP), reflecting a slowdown from 1HFY17 (2.5% of GDP), while CAD for Jan'18 surged to US$1.62bn vs US$1.256bn in Dec'17 (+28.7%MoM/4.0YoY). With regards to fiscal deficit, the slowdown is largely a function of higher revenue collection during the period (revenue recorded at PkR2,384bn - up 20%YoY) while total expenditure scaled up by 16%YoY to PkR3,161bn in 1HFY18. Growth in development expenditure remained healthy at 23%YoY beating 14%YoY growth in current expenditure, supporting the ongoing economic growth momentum. On the other hand, the uptick in CAD is primarily attributable to increasing trade deficit at US$2.76bn in Jan'18 vs US$2.29bn (up 20.6%MoM/9.8%YoY) on account of soaring imports at US$4.87bn (up 13.2%MoM/12.6%YoY) while export growth (4.8%MoM/16.5%YoY) lagged behind. Moreover, slowdown in remittances, recorded at US$1.64bn (down 4.9%MoM), further added on to the pressure. We expect election year populism to continue driving fiscal deficit particularly in the absence of any tax enhancement measures while CAD is also expected to persist on account of higher imports (oil and machinery related).
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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