Pakistan Economy_MPS Outlook
We expect headline inflation to clock in at 4.8%YoY in Jan'18, substantially higher than 3.7%YoY seen in Jan'17. While seasonal dip in perishable food items should restrict hike in heavy weight food component (down ~0.55%MoM), increase in petroleum prices (MOGAS/HSD: up 5.3%/4.4%MoM) along with cyclical uptick in housing rent should result in higher inflation reading. Sequentially, CPI index is expected to move 0.4%MoM higher (vs. 0.1%MoM dip in Dec'17). Accordingly, headline inflation is projected to average out at 3.9%YoY in 7MFY18 vs. 2.3%YoY in 7MFY17. Moving forward, we expect inflationary pressures to further buildup with the following factors at play including: 1) higher global oil prices (Arablight expected to average out at US$57/bbl in FY18F vs. US$48/bbl in FY17), 2) seasonal uptick in food prices ahead of Ramadan/EID period, and 3) recent rupee devaluation resulting in pass through inflation. Despite inflation picking up pace, real interest rates continue to remain at comfortable level (averaging +225bps/+180bps in 1HFY18/1HFY17) prompting MPC to maintain status quo in the upcoming review on Jan 26'18.
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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