Pakistan Strategy : Pre-Budget - Electoral consideration trumps economic prudence (Detailed Report)
The current government is set to announce its sixth and the last budget on 27th-Apr’18, just a month before the completion of its political term in May’18. Understandably, pre-electoral, populist tinge is likely to overshadow the need for fiscal consolidation. The reported outlay of PKR4.4trn (+8% YoY) seems optimistic in the backdrop of concurrent relief/expense and growth targets. Credibility of budget estimates is already under negative media scrutiny due to potential lack of ownership by the next political set-up (one provincial govt. has already refused to present the provincial budget) and optimistic targets. Secondly, the broad contour of the budget suggests it may fail to address investors’ key concern on growing pressure on external account and hence leaves the door open for future interim measures/major tweaking of budget strategy & macro framework, potentially under the IMF umbrella.
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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