AKD Securities Limited - AKD Daily.

Karachi -- July 08, 2020 (PPI-OT)

Pakistan Commodities: Swimming against uncertain tides

Gradual re-opening of global economies as social costs subsides and macro fundamentals recover, reflecting on commodities with TRJ index +5.2%MoM, building upon gains from May'20 (+13.0%MoM). However, regional disparities in number of new COVID cases limit economic recovery on a global scale.

This is evidenced from projections by major forecasting agencies. IMF has revised down its global GDP contraction forecast for 2020 to -ve 4.9% from -ve 3.0% in Apr'20. Moreover, a much larger retreat in developed (-8.0%) than emerging economies (-3.0%) is estimated.

Global crude benchmarks moved starkly higher (Brent/Arab Light climbed 13.5/50.4%MoM) to average US$40.0/35.1/bbl for the month of June'20, underpinned by OPEC+ member countries adhering to planned output curbs (106% compliance in June'20 vs. 85% in May'20 according...