Commodity Prices and Supply Chain Crisis
Oct 16, 2021
On Market Front
TRACKING KSE-100
KSE-100 index had one of its best week this year. remained volatile & lost 394 points to close at 44,822 points. The possibility of successful negotiation with IMF and exclusion of Pakistan from the FATF gray list drove the investor’s confidence. Analysts expect that the result season will provide support and the upward momentum will continue.
SEMICONDUCTOR SHORTAGE
The shortage of semiconductors has started to impact the local automobile industry as well. Pak Suzuki Motors (-0.02%) have announced that they are suspending the production of the three variants of Alto & Cultus, which is likely to impact the company’s sales and profit margin.
TRIPLE EFFECT, CEMENT SECTOR
The coal prices have gone up significantly since Aug-21, it has increased more than 120%. The container prices have also increased 5x since last year. Weak rupee further making coal & shipping expensive. Combining these three factors with lower domestic demand will likely cause a challenging time ahead for the cement sector.
On Economic Front
EXPORT SAVES THE DAY
According to APTMA, Textile exports grew 26% to USD 1.5bn in September 2021. The target for the textile sector for this year is USD 21bn, which APTMA believes can be achieved. Pakistan’s services sector exports grew by about 54% during July-Aug compared to last year, and IT exports led to growth in the service sector.
TWEET OF THE WEEK
