Pakistan Strategy_Moody’s downgrades Pakistan’s rating, (AKD Daily, Oct 07, 2022)
Moody’s, on Thursday, downgraded the Government of Pakistan's local and foreign currency
issuer and senior unsecured debt ratings to Caa1 from B3 after seven years. The rating
agency has also downgraded the rating for the senior unsecured Medium Term Note (MTN)
program to Caa1 from B3 while country's outlook remains negative.
As per Moody’s, the decision to downgrade the ratings is driven by increased government
liquidity, external vulnerability risks and higher debt sustainability risks in the aftermath of
devastating floods that hit the country.
In another development, the World Bank (WB) has also trimmed country’s growth forecasts
to 2% (from 4%) for FY23. The cut in this year’s growth outlook has largely been driven
by disruption in agricultural production. At the same time, the WB projects next year’s
growth at 3.2%, as the country gradually recovers from the floods.
SBP’s MPS committee is expected to meet on Monday to decide the monetary policy
setting of the country for the next months. We expect the central bank to maintain statusquo
in the upcoming MPS where the concerns related to floods in the country will likely
dominate the policy rate decision on Monday.
With PkR continuing its recovery against US$, the market sentiments will likely remain
positive in the short term. Consequently, the index performance will remain buoyant at
least in the short term. However, with country’s import cover currently standing at about
only 1.2x, the sustainability of market performance will remain contingent on flow of
funds. The market currently trades at a forward multiple of 4.4x.
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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