Pakistan Economy_May'21 inflation to reach 11.6%YoY, (AKD Daily, May 26, 2021)
AKD Daily
Pakistan Economy: May’21 inflation to reach 11.6%YoY
- Inflation for May’21 is likely to clock in at 11.6%YoY compared to 11.1%YoY in the previous month. On a sequential basis, inflationary curve is likely to flatten with 0.8%MoM jump in the outgoing month vs. 1.04%MoM in Apr’21 possibly on account of negative fuel price adjustment in electricity tariff and downtick in petroleum prices.
- MPC of the SBP is set to meet on April 28’21 where we expect the committee to hold interest rates. Our view is based upon, i) potential return of inflation into single digits in the near term as low base effect wears off with additional pull back coming from postponement of electricity tariff hikes, and ii) core inflation, taken as indicative of demand side pressures, still standing at 7.0% below pre-COVID level of 8.0% in Feb’20.
- Market is likely to remain volatile in the short term with attention likely to be centered around budget related news flows and IMF review next month.
- We advocate for sectors that fall on structural theme metrics (likely to also remain in favor in the upcoming budget) where our preferred sectors are Cements, Steel, and Construction-Allied on construction theme, and Power and select-OMCs (PSO) on payment in lieu of circular debt resolution,
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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