Pak external account puts up a strong Feb-2014 showing March 20, 2014 ( JS Research ) (PDF report is also attached) �SPAN style=FONT: 7pt Times New Roman> February 2014 external account showed a marked improvement where (1) the Current Account (C/A) clocked up a US$164mn surplus while (2) the overall Balance of Payments (BoP) booked a US$916mn surplus. �SPAN style=FONT: 7pt Times New Roman> While the receipt of ~US$352mn of Coalition Support Fund (CSF) tipped February 2014 C/A into the black, ex-CSF numbers were also positively skewed. Ex-CSF February 2014 C/A clocked up a US$188mn deficit with sequential improvement led by a 25% MoM narrowing of the trade deficit. �SPAN style=FONT: 7pt Times New Roman> Overall 8MFY14 C/A deficit stands at US$2.02bn vs. US$831mn in the corresponding period last year. The massive difference is primarily due to difference in realized CSF flows, where ex-CSF, 8MFY14 C/A deficit would stand at US$2.69bn vs. US$2.63bn ex-CSF C/A deficit in 8MFY13. �SPAN style=FONT: 7pt Times New Roman> Overall BoP numbers should be strong in March 2014 as well, given a further US$750mn inflow though C/A should be MoM weaker given absence of CSF. The same is expected in April 2014 suggesting that upbeat sentiment on the external account and PKR should remain intact. �SPAN style=FONT: 7pt Times New Roman> We maintain our FY14E C/A deficit at US$2.51bn (1.0% of GDP) and flag that development on external flows (3G auction, Eurobond, part of Etisalat dues, privatization proceeds, CSF and an IMF tranche) will be key to further BoP improvement and sustaining positive sentiment on PKR. Farrah Marwat farrah.marwat@js
Posted on: Thu, 20 Mar 2014 09:33:21 +0000
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