Report
EUR 8.70 For Business Accounts Only

Pakistan Economy: CAD estimates firmed up; decline in Feb’18 not material

  • As per the latest data, Current Account Deficit (CAD) contracted in Feb’18 to USD1.24bn vs a high of USD1.67bn (revised upwards) for Jan’18, though not materially lower than the monthly average CAD so far of USD1.3bn.
  • Latest round of 3.8% deval is in line with our call (5%) though more upfront in terms of timing. Our FY18 average forecast remains close to PKR109.
  • This puts government on a tighter noose even towards the end of its tenure vis a vis pressure to raise external financing from bilateral/multilateral agencies in 4QFY18.
  • Post deval and latest trends, we firm up our CAD estimate for FY18 to USD16.0bn (from USD15.8bn earlier). Both exports and imports growth assumptions have been revised up to 14% and 11% respectively (earlier 8% and 8%).
  • Our end-Jun’18 forecast for FX reserves stands at USD14.8bn (3-mnths of import cover), where fate of official flows, amnesty scheme (Pls. see our report) and oil prices remain key swing factors.
Provider
BMA Capital Management Limited
BMA Capital Management Limited

​BMA is amongst the leading financial groups in Pakistan. BMA Capital’s core areas of business include Capital Markets, Corporate Finance & Advisory, Asset Management, and Financial Products Distribution. BMA Capital is the leader in privatisation advisory in Pakistan, having successfully advised on over 50% of all privatisations in Pakistan, by value, in transactions valued in excess of US$4 billion. Recent transactions include joint lead managing the $813 million GDR Offering of 10% of OGDCL on the London Stock Exchange in 2006-07, and advising Etisalat on their successful acquisition of a 26% strategic stake in Pakistan Telecommunications Company Limited (PTCL) for US$2.6 billion, the largest M&A transaction and foreign direct investment in Pakistan’s history. The firm is among the top brokers in the Pakistan equity and treasury markets, and is among a handful of firms that comprehensively cover all segments of the capital markets. This is supported by a very strong and independent research capability, which is quoted regularly in both local and international media. BMA Capital’s retail brokerage brand, BMA Trade, has launched a nationwide network of branches as well as a comprehensive online trading platform, enabling investors across Pakistan to take part in the capital markets.

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