AKD Securities Limited Equity Research – Daily Report

Karachi, November 15, 2018 (PPI-OT): Pakistan Commodities: Oct’18 Commodities Review

Global commodity markets treaded lower (TRJ index falling 2.2%MoM) with almost all major commodity classes witnessing price declines over the month.

Lower crude oil prices (Brent/Arab Light prices down 11/7%Mom) and Coal (down 1.3%MoM) kept energy commodities soft, while Cotton and Steel benchmarks depicted similar trends where sentiments in these markets erred on the side of weakening global demand driving prices lower.

Moreover, heightening tensions from global trade tussles, particularly between the US and China, cloud global growth outlook with noticeable declines in global consumer confidence and moderating PMI data, depressing bullish sentiment in global commodity markets.

In this backdrop, Pakistan’s domestic import bill could be headed for some much-needed relief, where our calculations show a US$5/bbl decrease in global oil prices reduces the import bill by US$1.1bn (rising quantum LNG imports are also pegged to crude), where a continuation of this trend may ease near term macro-concerns, offering a window for consolidating economic fundamentals.

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AKD Securities Limited Equity Research – Daily Report

Karachi, November 15, 2018 (PPI-OT): Pakistan Commodities: Oct’18 Commodities Review

Global commodity markets treaded lower (TRJ index falling 2.2%MoM) with almost all major commodity classes witnessing price declines over the month.

Lower crude oil prices (Brent/Arab Light prices down 11/7%Mom) and Coal (down 1.3%MoM) kept energy commodities soft, while Cotton and Steel benchmarks depicted similar trends where sentiments in these markets erred on the side of weakening global demand driving prices lower.

Moreover, heightening tensions from global trade tussles, particularly between the US and China, cloud global growth outlook with noticeable declines in global consumer confidence and moderating PMI data, depressing bullish sentiment in global commodity markets.

In this backdrop, Pakistan’s domestic import bill could be headed for some much-needed relief, where our calculations show a US$5/bbl decrease in global oil prices reduces the import bill by US$1.1bn (rising quantum LNG imports are also pegged to crude), where a continuation of this trend may ease near term macro-concerns, offering a window for consolidating economic fundamentals.

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