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Nestle Pakistan:

Nestle had started its operations in


Pakistan back in the year 1988 by
acquiring a diary company Milk Pak
Ltd.
Nestle is a low cost leader which has
efficient operations as it provides its
customers with high quality products
and sells them at a premium price.
Therefore it is earning good profits

Economic Growth:
Pakistans economy has expanded
around 2% over the last year and
current growth GDP on an inflation
adjusted basis is 4.1%
Economic growth faced a serious set
back in the fiscal year because:
1.
2.
3.
4.
5.
6.
7.

Depressed consumer credit market


slow progress of public sector programes,
inflation
reduction in subsidies
security threat
instability in the state
energy crisis

Inflations Past history and Future


Expectation:

Inflationary pressure has intensified


recently after a number of number of
adverse developments.
From a low of 8.9 percent in October
2009, yearonyear Consumer Price
Index (CPI) inflation has accelerated to
13.3 percent as of April 2010.
Food inflation is stabilizing at around
14.5% against 7.5% in October 2009
though of change in prices of NonFood
items has been recorded at 12.2% for
April from 10% in October.

Trend in the last years

Expected Monetary Policy:


Excessive borrowing has stimulated
expectations of increasing inflation in the
future and resulted in higher interest rates
which in turn have caused a decrease in
investment.
SBP realizes that the burden of monetary
tightening is being borne largely by the
private sector as higher interest rate
cause investment to crowd out
SBP after careful consideration has
decided to increase the policy rate by 50
basis points to 14 percent as on outcome
of 30th November, 2010.

Gold and Oil outlook:

The lowest price reached was on 13/02/2010 which was Rs. 28774.
The highest price reached was on 20/11/2010 which was 38213.5.
On average the price remained Rs. 27596.8.
It can be expected that in the future the gold prices will continue
to rise with a fluctuating trend.

The lowest prices of petrol was Rs.


62.170 and the highest price petrol
was Rs. 75.900 respectively.
On average the price petrol was Rs.
69.559.
The prices have been fluctuating
over the year 2010 the oil prices
have been exposed to international
prices shocks.
The future of the prices remains
unpredictable

View on Stocks and Bonds:

In the future investment in stocks and


bonds expect high return.
This is primarily due to:

1. the fact that the global markets have started


to recover from the financial crisis
2. the country primarily is coming out of the
political turmoil
3. law and order situation has improved much
since last year

For 2011 the approach is to allocate to


both markets. If the economy heats up
and stocks jump in value that would be
great as large capital gains will be
realized.