According to latest data released by the Federal Bureau of Statistics (FBS), 1HFY10 total exports amount to US$9.1bn out of which textile exports during the period contributed US$5.03bn, exhibiting a marginal decline of 0.57%YoY. That said, textile exports in Dec’09 were up 15%YoY at US$831mn against US$720mn in Dec’08. Further on this note, textile machinery imports of US$35mn in Dec’09 were the highest in the last 16 months, and are now back to FY08 levels. While sequential textile exports have slightly dipped in Dec’09 (down 2.5%MoM), robust textile machinery import orders are encouraging in our view, despite weakening of the PkR, and points towards a recovery as the global economy gains traction. NML remains our preferred player in the textile sector and we have an Accumulate stance on the stock based on our target price of PkR75/share. .
