AKD Securities Limited Equity Research - Daily Report.

Karachi -- January 20, 2020 (PPI-OT)

Pakistan Economy: External adjustment runs its course

Latest data on external account sends out a reassuring message, with current account deficit (CAD) narrowing 80%YoY to US$0.37bn in Dec'19 vs. US$1.88bn in Dec'18 while remaining largely flat on a sequential basis.

The YoY improvement was largely driven by a contraction in the trade deficit (both good and services) - which narrowed 39%YoY to US$1.99bn (vs. US$3.27bn in SPLY) - and strong remittances flows - which witness a jump of 20%YoY.

From flows vantage, Dec'19 was full of happenings, with capital account recording net inflows of US$2.3bn. Strong funding inflows from different...