EUR 4.64 For Business Accounts Only

Pakistan Textiles: Feb’17 exports down 3% YoY; it’s time for rebates to play their part

• Pakistan Textile exports for Feb’17 fell 3%YoY to US$0.99bn. Non-value added exports fell 14%YoY while value-added segment (75% of total exports) sustained its resilience and grew 2%YoY led by readymade garments (up 5%YoY).

• Int’l cotton prices for Feb’17 were up 28%YoY and future projections suggest continuation of this bullish trend in 2017 led by higher consumption (up 3%YoY) in China, Bangladesh, and Vietnam and lower ending stocks in China (down 16%YoY).

• Amid stiff regional competition, PM’s textile package, coupled with lower fuel and finance costs, should encourage exporters to pass on rebates to customers and gain market share. We maintain Buy for NML (TP: PkR209/sh) offering total return of 21%.