Pakistan Strategy: SBP continues to be 'quick on the trigger'
- Marking continued tightening in its first major policy move since the (preliminary) announcement of a staff-level agreement with the IMF, the MPC of SBP raised the policy rate by 150bps
- This is the seventh consecutive hike making for 650bps rise during this tightening cycle (initiated from Jan'18), where MPC can be seen to pre-empt 'considerable' inflationary pressures on the horizon, atop of fiscal slippages and spillovers from PkR depreciation (mostly energy price linked)
- Banks and cash-rich players likely to benefit, where the former records NIM accretion (with re-pricing lags), while steep hikes raise asset quality concerns, while latter companies (mostly E&Ps) deal with liquidity concerns or heightened operational burdens (working capital strains) depleting cash/ST investment reserves
- Calling a peak for this cycle of monetary tightening would be premature, in our view, particularly when the quantum of utility and gas price hikes, coupled with short term devaluation of the PkR are yet to crystallize, where we await Budget FY20 for the same
- In this constrained backdrop, demand suppression is likely to hit margins and pricing power across major industries, particularly for energy intensive, leveraged plays. Nonetheless, recent market tumult augurs for a buy-on-dips approaches to relatively risk-cushioned banking plays (MCB, MEBL, BAHL), OGDC, POL, HUBC and export oriented textiles (NML)
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.