Federal Budget to be unveiled on 12th June with an expected outlay of Rs3.4trn – KASB Research
By: Sarah Mazher,
+92 21 111 222 000
KASB Securities Limited
The new PML(N) govt is set to unveil its first Federal Budget on 12th June with an expected outlay of PRs3.4trn.
Key highlights of the budget include a deficit of 5.6-5.8% of GDP (PRs1.59-1.64tn), with a projected 21% increase in FBR tax revenue, 30% YoY increase in PSDP (PRs1.13trn) and reduction in non-development expenditure by 30%.
While FY14 budget is unlikely to have any direct implication for KSE (no change expected in CVT, CGT, Corp income tax), we expect sector/stock specific rally in cements, power, OMCs and autos.
With KSE-100 index already up 32% YTD we suggest caution should be exercised before entry into selected stocks. We highlight, outcome of Energy Conference, upcoming Monetary Policy and talks with IMF should be critical to watch out in order to better gauge outlook for the Energy sector and Banks.
FY14E Budget: Setting the performance bar for PML (N)
The newly elected PML (N) led govt is all set to unveil the federal budget on June 12th, to be announced by the new Finance Minister Ishaq Dar. With an expected PRs3.4trn (+6% YoY) federal budget outlay, the govt is expected to realign focus towards (1) heavy infrastructure projects (2) reduction in current expenditures (3) taxation drive to improve tax/GDP and (4) tapping sources of external financing.