Pakistan Equity Market: Weekly Review -Fears of Economic Slowdown Drag the Index by 0.8%WoW
- Pakistan Equities (KSE100) declined by 0.8%WoW (332ppts) closing at 40,999pts. Trading activity plunged to average daily traded value/volumes of USD41mn/124mn, down 18% /21%WoW.
- On global economic front, United States of America (USA) had imposed a 10% tariff on USD200bn worth of Chinese goods’ imports - the tariffs came in effect from from September 24, 2018. In return, China also announced to impose tariffs on USD60 billion of US goods. Moreover, President Trump has recently hinted towards raising the tariffs to 25% from Jan-19 if China does not accede to US demands (related to intellectual property rights of US firms) and has promised to hit China with tariffs on additional USD267bn worth of goods in case of retaliation.
- Amongst the domestic economic developments, State Bank of Pakistan’s (SBP) foreign exchange reserves declined by 6.1% (USD588mn) to USD9.04bn as at September 19, 2018 over the last two weeks (since September 7, 2018). The decline came on the back of debt servicing and other official payments. Total liquid forex reserves held by the country stood at USD15.5bn, down USD548mn over the period.
- The Current Account Deficit (CAD) swelled 10%YoY to USD2.72bn during the first two months of FY19 (vs. USD2.47bn in same period last year). Current account deficit for Aug-18 came in at USD600mn, down 72%MoM on the back of slowdown in non-energy imports (post additional duties and PKR depreciation) and likely delays from SBP in according the approvals for import payments (trade data by PBS showed minimal relief). We expect FY19F CAD to fall to USD13.42bn (4.6% of GDP) from USD18.13bn (5.8% of GDP) in FY18 as we expect slowdown in ex-petroleum imports, particularly for that in Machinery.
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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