Pakistan Textile_Textile exports close FY22 at record levels, (AKD Daily, Jul 21, 2022)
Textile exports close FY22 at record levels
Export proceeds for Pakistan recorded at an all-time high of US$31.8bn in FY22 is the result of textile exports reaching their highest level in the country’s history at US$19.3bn, up 25.5%YoY.
The value-added segment registered an uptick of 25.6%YoY to US$15.6bn. Moreover, ready-made garments/ bedwear /knitwear posted growth of 28.7%/18.8%/34.2%YoY, respectively.
For Jun’22, textile exports stood at US$1.7bn, up 3.9%MoM and 2.9%YoY, whereas seg-ment–wise, value-added exports posted a growth of 8.3/5.8% MoM/YoY while non-value-added exports posted a decline of 12.7/9% MoM/YoY.
Global cotton prices have plummeted 22%MoM to a seven-month low, and currently hovering around USc127/lb vs the last two weeks’ avg. of USc163/lb. Furthermore, Cot-look A index futures have also plunged 32%MoM to USc110/lb for Aug’22.
Moreover, in Asian markets, cotton prices are following suit and have registered a decline of 15-20%MoM in India. Similarly in Pakistan, local cotton prices have receded, down 7%WoW in Jun’22 to currently hover around PkR16,611/40kg and witnessing a decrease of 24.8%MoM in Jun’22.
In light of sharp decline in local and global cotton prices, textile players are likely to bene-fit from improved spinning margins in the short term while expected reduction in global demand (textile exports likely to decline by 15%YoY in FY23) is likely to counterbalance an expected increase in value added segment’s margins. Currency deval is an added posi-tive.
Based on valuation, NML (TP: PkR128/sh) and NCL (TP: PkR65/sh) appear attractive, how-ever, as with the market, stock outlook is contingent on economic outlook, which re-mains hazy at best.
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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