1. Asia
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Analyst – Amélie CLEMENT-LAMIRAULT
PAKISTAN ANALYSIS
10/26/16
Cercle d’inves>ssement de l’IESEG School of Management
Macroeconomic
Analysis
News
In September 2013, FMI approved a $6.6 billion USD loan with Pakistan. The aim of this 3-year program was to support
its economy and its growth. On 24th of October in 2016, Chris;ne Laguarde said « I congratulate Pakistan for having
successfully completed its economic reform program ». The program was composed of reforms which have not been all
successfully completed according to the French embassy in Pakistan. In fact, public firms restructura;on and
improvement in tax collect are not sufficient to support the economy. Nevertheless, the country is now taking part in
the emerging market in the MSCI Index. This market represents 85% of the world popula;on and accounts for 60% of
global GDP.
Graph 1 : Evolu>on of GDP (in constant $)
103
103.2
103.4
103.6
103.8
104
10/12/2016 10/19/2016 10/26/2016
PKR/$
Graph 2 : Currencies (in percentage)
Composi>on of Consumer Price Index (CPI)
Announcement of the last and the previous year
Last Previous
Forecast
(Q1/2017)
GDP
GDP Growth rate 4.24 4.03 4.8
GDP from Agriculture 2,222,337 2,216,223 2,281,414
GDP from Manufacturing 1,412,453 1,369,003 1,447,497
Prices
Infla;on rate 4.21 3.88 3.7
Consumer Price Index CPI 211.57 209.88 212
Food infla;on 3.58 3.14 2.1
Government
Government Debt to GDP 64.80 65.10 64
Credit ra;ng (S&P) B B-
Fiscal expenditure 5,796,302 5,968,654
35
29
8
8
7
4 4 2
Food and non-alcoholic beverages
Housing and energies
Clothing and footwear
Alcoholic beverage, tobacco, culture and leisure
Transport
Furnishings and household equipment
Educa;on
Health
Major indicators
GDP : 270 USD Billion
GDP per capita : 1152 USD
Popula;on : 190 Million
Individual Living Wage : 17,600/month
Unemployment rate : 5,9%
Balance of Trade : -241,969 PKR Millions
Interbank rate : 5,9%
120
135
150
165
180
195
1/1/06 1/1/13 1/1/20
GDP PAKISTAN
Despite the IMF program in 2013-2016,
public debt remains very high. Indeed, it
represents 65% of GDP
According to IMF, the PKR is overvalued
which might lead tex;le industry to take off.
Source : Trading Economics
Source : Trading Economics
Source : Trading Economics & IMF
Source : Trading Economics & IMF
Source : Trading Economics

2. Les informa,ons et analyses diffusées par Le Cercle d'Inves,ssement de l'IESEG ne cons,tuent qu'une aide à la décision pour
les inves,sseurs. La responsabilité du Cercle d'Inves,ssement de l'IESEG ne peut être retenue directement ou indirectement
suite à l'u,lisa,on des informa,ons et analyses par les lecteurs. Il est recommandé à toute personne non aver,e de
consulter un conseiller professionnel avant tout inves,ssement. Ces informa,ons indica,ves ne cons,tuent en aucune
manière une incita,on à une quelconque opéra,on boursière. Cercle d’inves>ssement de l’IESEG School of Management
Asia
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Analyst – Amélie CLEMENT-LAMIRAULT
PAKISTAN ANALYSIS
10/26/16
Macroeconomic
Analysis
Stock market
Karachi 100 41.974,46 (+0.56%) TOP sector
Cement Produc;on has been mul;plied by almost 1.5 within 3 months.
On October 2016, Cement Produc;on increased from 2380 thousand
of tons to 3160 thousand of tons. Pakistan is the 16th producer of
cement in the world, behind Thailand and Mexico, with an exporta;on
of 1.55%.
Moreover, the issue between Fecto Cement (one of the most
important cement firm in Pakistan) and CDA (Capital Development
Authority) about stone crushing ac;vity and development in the area is
being solved. In fact, Fecto Cement went to High Court in order to be
allowed to pursue its ac;vi;es in the Margalla Hills
Source : Trading Economics, Sta,sta, Global Cement
ì
FLOP sector
Manufacturing produc;on has skyrocketed sharply. In July 2016,
manufacturing produc;on increased by 2.6%. The average of this
sector from 1990 to 2016 is 5.29%. The highest value was 33.69% in
April 1991 and the lowest was -19.65% in March 2009. This sector is
composed by assembly of components and finished products for sale.
Tex;le industry represents the largest manufacturing produc;on.
Nevertheless, the sector lost more than half a million jobs within 2
years because factories closed. In June, governments announced a
« zero-rated sales tax regime » for some industries including tex;les.
Source : Trading Economics & Bloomberg
î
40400
40700
41000
41300
41600
10/13/2016 10/19/2016 10/25/2016
Karachi 100
The Index is the best performance (in a
basket of 26 peers) in the Asia equity market
in 2016. This performance is closed to the
announce of MSCI Inc thah Pakistan will take
part in the EMERGING MARKET INDEX in May
2017.
Source : Inves,ng & Bloomberg
Bond market
Government bond 10Y 8.03%
7
8
9
10
11
12
13
14
15
10/26/10 10/26/12 10/26/14 10/26/16
Government bond 10Y
Bond market shows signs of weaknesses.
Government bond 10Y is declining sharply. `
Source : Inves,ng & Bloomberg
Source : DAWN, October 26th