Pakistan Economy: Pakistan’s exports to China; Textile and Agri to benefit
- Reportedly Pakistan is going to double its export to China this year, while work on Free Trade Agreement (FTA) is also underway. In various interviews, Govt. officials have suggested export of rice, sugar, textile and other agricultural commodities (like fruits) will take priority. To note, Pakistan Exports to China as of FY18 are US$1.75bn while imports from China were recorded at US$11.5bn resulting in net deficit of US$9.75bn .
- Further, we drawdown the list of commodities on next page which Pakistan is currently exporting to China. Among overall exports, Cotton & Yarn is valued around US$940mn (51% of total exports) followed by metals which are 17% of total.
- While other top commodities are Cereals, Leather, Fisheries, Fruits, construction and allied material and minerals.
- We believe, companies like Nishat Chunian (NCL), Nishat Mills (NML) and Gul Ahmed (GATM) would be beneficiaries as they are already exporting Yarn to China. Also this would be opportunity to all players to make entry in Chinese market.
- Further, regarding Rice, Pakistan is currently exporting US$2bn worth of rice in global market, which can further be enhanced by exporting to China. Among listed players, Matco Foods (MFL) and Habib ADM (HAL) potentially benefit.
- Among, other exportable goods to China, Sugar sector (companies like JDW, MIRKS, and MRNS) can benefit given surplus stock which is already approved by Govt. for export.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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