Pakistan Economy_FY21 GDP surprises; may surprise even further! (AKD Daily, May 24, 2021)
AKD Daily
Pakistan Economy: FY21 GDP surprises; may surprise even further!
- A surprise to many — Pakistan’s economic growth for FY21 is estimated at 3.94%YoY as per the number released by PBS vs. –ve 0.47% in previous year. The growth, which has been highest since FY18, is seen to be broad based with services sector contributing the most (+4.4%YoY in FY21 vs. –0.6% in FY20).
- While the latest release of 3.94%YoY based on data points for 9MFY21 is itself encouraging, AKD estimates final number may potentially cross the 4.5%YoY mark.
- Our 4.5%+ GDP growth estimate for FY21 is premised on two elements, i) LSM growth which is likely to gain from low base effect in 4QFY21 (FY21 AKD estimate 14.5%YoY vs. 9.3% estimated by Govt. authorities) and ii) wholesale and retail trade driven by continuation of robust consumer spending further accelerated by Eid related spending, and COVID related disruptions in the comparative period (POS transactions by cards declined by 36.8%QoQ in 4QFY20).
- The latest release of GDP numbers casts positive reverberation for FY22 growth estimates in our view, provided the Govt maintains appropriate balance between growth policies and meeting IMF targets in the upcoming budget. Hence, we advocate for sectors that fall on structural theme metrics where our preferred sectors are Cements, Steel, and Construction-Allied on construction theme, and Power and select-OMCs (PSO) on circular debt clearance.
AKD Research
Pakistan State Oil is a petroleum group based in Pakistan. Co.'s principal activities are the procurement, storage and marketing of petroleum and related products. Co. also blends and markets various kinds of lubricating oils.
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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