Pakistan Economy - Critical Economic Risk Assessment Spurs Hawks' Aggression
- SBP raised PR/DR by 150bps to 10%/10.5% on Friday; while the hike was higher than our expectation of 100bps it was in line with money market expectations. The decision was based on 1) inflationary pressures and expectations, 2) relatively lower real interest rates, 3) high Twin Deficits, and 4) hawkish monetary policies adopted by developed economy.
- SBP revised down FY19 GDP growth projection to 4%YoY in FY19 from 5%YoY in previous MPS, owing to slowdown in LSM, expected decline in agriculture output, and resulting impact on services sector. We have also trimmed our estimate to 3.5% (from 4.5%) owing to the above stated factors.
- Despite PKR/USD slipping by 3.8% to 139 on Friday, we keep our inflation and interest rate projections unchanged as it was already built in our projections. However we now expect PKR/USD to reach 147 by Jun-19 (compared to our earlier forecast of 142), based on REER (which we currently estimate at 103.8).
Elixir Securities Pakistan is a Corporate Member of the Pakistan Stock Exchange & Pakistan Mercantile Exchange and is one of the leading securities brokerage & investment banking firms in Pakistan, established since 1994. Our principal business activities include all aspects of Pakistan’s Capital Markets covering Securities Brokerage (Equities, Fixed Income and Commodities), Corporate Finance & Capital Markets Advisory (M&A, ECM, DCM) and Investment Research (Economics & Securities). We are one of the most active & aggressive Broker-Dealers in Pakistan executing trades for most of the Top 20 Global Brokers with unmatched corporate access credentials and have successfully advised and closed on some landmark ECM transactions in the history of Pakistan including the largest deal in frontier Asia (USD 1.02 billion). Our Clients include foreign and domestic financial institutions (Banks, Asset Managers, Insurance Companies, Pension Funds) corporates, HNWI’s and retail investors. This is supported by a very strong and independent research capability, which is quoted regularly in both local and international media.
Elixir Securities Pakistan is the proud recipient of many awards & recognitions including AsiaMoney’s Brokers Poll 2017, FinanceAsia’s Pakistan Best Investment Bank and Best Broker 2017, The Asset’s Best Brokerage House in Pakistan 2016, Asiamoney’s “Best Domestic Equity House 2015 in Pakistan”, The Asset Triple A Country Awards 2015 - Pakistan “Deal of the Year” and “Deal of the Year-Highly Commended”, CFA Society of Pakistan Awards for Year 2015 “Best Research Analyst (1st Rank), CFA Society of Pakistan Awards for Year 2014 “Best Research Analyst (1st Rank)”, “Best Trader” 2nd Runner-up (3rd Rank), The Asset Triple A Country Awards 2014’s “Best Deal in Pakistan” and Capital Finance International’s nomination for “Best Equity Research in Pakistan 2010”.
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