BMA Today for October 12, 2018 
 
     FRIDAY 12 October 2018 
 
 

 

   

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At a Glance

Previous Market Session

Local Market    
 KSE 100 N.A N.A
 KSE T. Value PKRbn N.A N.A
 10YR PIB N.A N.A
 6M KIBOR N.A. N.A.
 PKR/USD N.A. N.A.
Asia Pacific    
 BSE SENSEX 30 N.A N.A.
 NIKKEI 225 N.A N.A.
 STRAITS TIMES INDEX N.A N.A.
 KUALA LUMPUR N.A N.A.
 JAKARTA COMP. N.A N.A.
 THAI SET 50 N.A N.A.
Middle East    
 DFM GENERAL N.A N.A.
 TADAWUL ALL SHARE N.A N.A.
 MSM30 INDEX N.A N.A.
 KUWAIT SE WEIGHTED N.A N.A.
 DSM 20 INDEX N.A N.A.
Global Markets    
 OIL (NYMEX) N.A. N.A.
 US 10YrBOND N.A. N.A.
 LIBOR6MTH N.A. N.A.
 FTSE 100 N.A N.A.
 DOWJONES N.A N.A.
 S&P 500 N.A N.A.
       
 
In Focus
Pakistan Strategy: IMF - What past programs suggest on policy option/valuation

   We take a look on key economic policy actions and trends in major economic indicators before and after Pakistan entry into the past four IMF programs.There are not many differences in terms of policy options (average 10% devaluation, 2% policy rate hike, cut in development spending & subsidy and enhanced tax collection), which have been adopted over the years. Understandably, policy actions have led to improvement in twin deficit with growth being the inevitable victim. Above-average devaluation (28% since Nov’17) and policy rate hikes ahead of upcoming program is justified due to excessive overvaluation in currency (steepest at 32% in Nov’17) and low-base effect in policy rate (starting point was 42-yr low rate in early 2018). We continue to see room for more policy action ahead. While historical returns point to not-so-strong performance before and after IMF program (+1/-1%), valuations play an important role. We reiterate our view of current levels representing market bottom. All eyes are on upcoming visit of IMF program mission!

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Media Watch

Economy: Government borrows over Rs 2.6 trillion to meet financial needs /Business Recorder
Market: Stocks fall as IMF word gets no cheer amid global selloff / The News
Economy: Diamer Bhasha dam sukuk proposed / Dawn
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Equity Round Up


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DISCLAIMER
This memorandum is produced by BMA Capital Management Limited and is only for the use of their clients. While the information contained herein is from sources believed reliable, we do not represent that it is accurate or complete and should not be relied upon as such. Opinions expressed may be revised at any time. This memorandum is for information only and is not an offer to buy or sell, or solicitation of any offer to buy or sell the securities mentioned.