Pakistan Equity Market: Weekly Review - Blood on the Streets
The bloodbath continued from last week on fears over vulnerable economic position and global meltdown, with KSE-100 Index falling by 4.4%WoW (1,708pts) to 37,518pts. Index took a breather during midweek on PKR depreciation, but could not hold on to it due to economic concerns and foreign selling. The Index has cumulatively shed 3,481pts (down 8.5%) during the MTD.
On economic front, PKR depreciated by 7% during the week against the Greenback to 133.6. State Bank of Pakistan (SBP) communicated that this adjustment corresponded to Current Account Deficit (CAD) and demand-supply gap in foreign exchange market. It expected that weaker PKR, interest rate hikes and other policy measures for reducing imports would improve external account position. PKR/USD closed at 131.9 today with improved supply of Greenback to local banks. In light of SBP’s recent actions, we expect PKR to converge towards its fair value based on Real Effective Exchange Rate (REER) and reach 142.1 by the end of FY19 vs our previous expectation of 135.
State Bank of Pakistan’s (SBP) forex reserves continued to fall, declining by USD101mn (1.4%WoW) to USD8.3bn (import cover: 1.4months).
Pakistan Bureau of Statistics’ (PBS) recent trade numbers showed that Goods’ Trade Deficit declined by 9%MoM/2%YoY to USD2.7bn in Sep-18 led by 11%MoM decline in Goods’ Imports. On cumulative basis during 1QFY19, Goods’ Trade Deficit declined by 2%YoY to USD8.9bn owing to quantum of absolute growth in Goods’ Exports (USD194mn; 5%YoY) exceeding that of Goods’ Imports (USD90mn; 1%YoY).
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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