Pakistan rupee: Tipping over
​The PkR/US$ parity depreciated in a sharp movement yesterday - the largest daily move since CY08 - with the rate closing at PkR108/US$ (~3.2% depreciation), primarily reflecting ongoing deterioration in fx reserve position due to rising trade imbalances (11MFY17 CAD 1.3xYoY higher) and slower foreign loan inflows (70% disbursement of the budgeted amount from multilateral donors in 11MFY17). While currency is expected to remain volatile, a pullback in the PkR remains likely (PkR/US$ trading at PkR106.3 intraday as per channel checks) taking cue from MoF and SBP's statements. However, over CY17 PkR is likely to consolidate around PkR106-107 with fx reserves remaining above US$19bn, in our view. Thereon, depreciative pressures are expected to build as CA dynamics worsen (FY18F: 4.5% of GDP) with import cover coming under 4m, to trigger further PkR/US$ depreciation (4.9% in FY18F). Implications on the macro front linger in the form of inflationary pressures (FY18F CPI inflation projection up by +30bps) and higher debt servicing. From the market's vantage, PkR weakness remains beneficial for Textile, E&P and IPPs while holding negative implication for Cements, Steel and Automobiles.
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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