As per the latest data disclosed by PBS, textile exports for the month of August 20 depicted a double digit decline of 15%YoY clocking in at USD1.0bn. On a sequential basis, textile exports reduced by 21%MoM accredited to 24%MoM decline in value added textile exports.
Recent data suggests that cotton arrivals at factories as of Sep 15, 2020 were recorded at 1.04mn bales, down by 44%YoY according to Pakistan Cotton Ginners Association data.
The government has continued the concessionary grid rate for the export oriented sectors including textile to increase their competitiveness globally.
We believe that ease in lockdowns globally and increased orders have been priced in where textile composite has posted a return of 22%FYTD.
We advise caution since second wave of corona, lower cotton production and hike in cotton prices may dent the profitability of sector. (BIPL Securities Ltd.)