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Chairman's Message
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| Aqeel Karim Dhedhi |
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The past year has been testing for Pakistan’s economy in general and the capital markets in particular – buffeted as these were by both external shocks (the commodity price blow-out followed by mortgage derivatives-induced global liquidity & credit crisis) and internal uncertainties created by the war on terror. Despite these challenges Pakistan has managed to navigate through the eye of the storm. In the economic arena, inflation in on a falling trendline declining from over 20% in August 2008 to near 10% in August 2009, the country’s foreign exchange reserves (with IMF support) have rebounded to US$14.0billion levels near their historic peak, while import cover is nearing its nine-year average of 5½ months versus near 2 months in January 2009. This has stabilized the rupee – dollar exchange rate in the PkR82-83/$ range.
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International ratings agencies (S&P and Moody’s) have raised Pakistan’s sovereign ratings a notch upwards while the country’s credit default swap (CDS) spread on Pakistan Bonds has narrowed sharply from 3084.3bp in Dec 2008 to 1863.7bp in Sep2009. This reflects significant improvement in foreign investors’ risk perception regarding Pakistan.
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Success in military operations in Swat and northern areas coupled with return of internal refugees to their home districts has also boosted domestic public confidence in the Government’s ability to manage a volatile social situation.
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The above developments have not gone unnoticed by foreign portfolio investors. Since June 2009, US$ 200 million of foreign funds have flowed into Pakistan ’s Stock Market. The bulk of those (93%) have come in between August (51.5% or US$ 95.34 million) and September (41.4% or US$ 76.95 million), 2009. As a result, the KSE-100 Index has risen by 33% between June 30, 2009 to September 29, 2009. KSE-100 Index is now 100% up from its low in January 2009.
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AKD Securities continues to serve its customers by providing insightful and timely research reports on the economy, sectors and specific companies so that our investors can take informed investment decisions. The corporate finance focus remains on facilitating corporate access to long term capital. In this context, it is an honor to report that AKD Securities acted as the sole advisor for the first listing in one year for Nishat Power Ltd., which was fully subscribed. AKD Securities will continue our effort to constantly improve the quality of service provided to our customers.
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With regards,
Aqeel Karim Dhedhi
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