AKD Quotidian about — Feb’ 14 Textile Exports

Karachi, March 25, 2014 (PPI-OT): According to details released by the Pakistan Bureau of Statistics (PBS), textile exports for the month of Feb’14 increased by 3%MoM to US$1.131bn bringing 8MFY14textile exports to US$9.155bn, up 828%YoY.

According to AKD Securities, the benefit of GSP Plus status is yet to materialize. This is evident from the sequential decline in exports of higher value added products. AKD Securities believes benefits of the EU GSP Plus status will commence from 4QFYI4 as it will take some time to break away the market share of other textile manufacturers e.g. Bangladesh that already have duty free access.

Though AKD Securities believes the realized value for exporter will fall in PKR terms due to sharp appreciation of the PKR AKD Securities expects the impact to be front end loaded as margins are likely to rationalize in the long run. AKD Securities maintains AKD Securities’ liking for NML and highlight this as an opportunity to build fresh positions in the stock. NML offers an upside of 13% from current levels to AKD Securities’ TP of PKR137.5/share.

Exports Feb’14: According t details released by The Pakistan Bureau of Statistics (PBS) textile exports for The month of Feb’14 increased by 3%MoM to US$1.1 31bri bringing 8MFYI4 textile exports to US$9.1 55bn, up 8.28%YoY. Yarn exports picked up during the month by 28%MoM to clock in a: US$167mn after posting a sharp decline during Jan’14.

Higher value added segments continued to post sequential weakness during Feb14. In this regard, Readymade garments came off by 8%MoM co US$157mn, Knitwear exports were down by 5%MoM while bed wear exports remained flat at US$168mn. in this regard, substantial growth in exports in ye t materialize due to the GSP Plus status as evident from a decline in exports of higher value added products.


Feb’14 Textile Exports
Value AUP
Unit Qty MoM YoY (US$’mn) MoM YoY (US$/unit) MoM YoY
Total 1,131 3% 14.1%
Cotton Yarn M.T 57,123 28% -6% 167 28% -9.4% 2,916 0% -3%
Cotton Cloth TH.SQM 135,446 10% 3% 237 13% 15.1% 1,751 3% 13%
Knitwear TH.DOZ 9,374 -5% 27% 176 -5% 26.8% 18,798 -1% 0%
Bed Wear M.T 24,407 2% 24% 168 0% 28.3% 6,876 -2% 4%
RM Grmts TH.DOZ 2,361 -9% 20% 157 -8% 19.8% 66,636 1% 0%

GSP Plus benefits to materialize in 4QFY14: AKD Securities believes benefits of the EU GSP Plus status will start. becoming evident: by 40FY14. In this regard, average monthly textile exports value to the EU during 1HFY14 was US$362mn .A onetime 20% increase in exports to EU will result in additional exports revenue of US$72mn per month.

That said exports will likely witness a sharp decline in value in PKR duet The sharp appreciation of the PKR vs. The greenback during Feb14. The appreciation of the PKR vs the US$ is likely to have a front end loaded impact on sector valuations, and since the procurement season has concluded, earnings are likely to remain under pressure.

However, AKD Securities expects margins to materialize with the acquisition of fresh cotton stock in 2QFY15. AKD Securities maintains AKD Securities’ liking for NML and highlight this as an opportunity to build fresh positions in the stock. NML offers an upside of I 3% from current levels to AKD Securities’ TP of PKR1 37.5/share.

The post AKD Quotidian about — Feb’ 14 Textile Exports appeared first on AsiaNet-Pakistan.

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