Pakistan vs. Terrorists

Pakistan
Market Strategy
Pakistan vs. Terrorists
17 December 2014 Special Report
The Final Showdown Seems Near
Fatalities in Terrorist Violence in Pakistan
Casualties Since Jun'14
59
280
473
Aug
111
30
209
350
Sept
108
26
353
487
Oct
110
22
289
421
Nov
157
51
376
584
Total
782
254
2,064
3,100
Casualties During Oct'09 - Dec,09 (Operation Rah-e-Nijat)
Civilians
Security
Force
Personnel
Terrorists/
Insurgents
Total
Oct
255
118
1,001
1,374
Nov
175
93
792
1,060
Dec
227
43
505
775
Total
657
254
2,298
3,209
Security
Force
Personnel
Terrorists/
Insurgents
Total
Apr
132
89
297
518
May
279
155
1,590
2,024
June
200
157
1,397
1,754
Total
611
401
3,284
4,296
A desperate measure in wake of effective army operation: We see the
attack, termed by TTP as a response to military operation, as a desperate
measure by the terrorists as the recent army offensive had increased terrorist
deaths to disproportionately high levels.

The attack has further galvanized support for terrorist elimination: The
incident helped in further galvanizing support for the ongoing operation against
the militants, and has brought the entire nation as well as the political parties
on one platform. Army operation against the militants has already gained pace
with air strikes in Khyber agency. The government has removed the
moratorium on death penalties to allow convicted terrorists to be hanged.

The current lot of terrorists seem to be half-trained; terrorist elimination
may not be far away: While the recent terrorist attacks have been severely
deadly as terrorists targeted civilian soft targets, each could have been worse
had the terrorists been able to successfully carry out their plan. As such, we
believe the current lot of terrorists are half-trained and Security Forces have
been successful in destroying their first line of defense. This leads us to
believe that Pakistan is moving towards terrorist cleanup and peace dividend
may not be too far away. Terrorist aiming for soft targets in desperation Casualties During Apr'09 - Jun,09 (Operation Rah-e-Raast)
Civilians

Tehrik e Taliban Pakistan (TTP) backed terrorists stormed into an army run school
in the provincial capital of Peshawar in KPK killing 141 people including 132
children. Importantly, the army was able to rescue the remaining 960 in the school
compound. We see the attack, termed by TTP as a response to military operation,
as a desperate measure by the terrorists as the recent army offensive had
increased terrorist deaths to disproportionately high levels. The proportion of
terrorists deaths in total terrorism related casualties had fallen from a peak of 84%
in Jun-10 following Operation Rah-e-Rast to a low of 17% in Sep-13. Since Jun-14,
terrorist deaths have amounted to 67% of the total casualties.
Total Casualties
Share of Terrorists in Casualties (RHS)
Operation Zarb‐e‐Azb
Source: SATP
Operation Rah‐e‐Rast
2500
90%
Operation Rah‐e‐Nijaat
80%
2000
70%
60%
1500
50%
40%
30%
1000
20%
500
10%
0%
‐10%
0
Dec‐14
134
Dec‐13
July
Dec‐12
785
Dec‐11
557
Dec‐10
66
Dec‐09
162
Dec‐08
June
Dec‐07
Total
Terrorist attack leaves 141 dead in Peshawar: Tehrik e Taliban Pakistan
(TTP) terrorists stormed into an army run school in the provincial capital of
Peshawar in KPK killing 141 people including 132 children. Importantly, the
army was able to rescue the remaining 960 in the school compound.
Dec‐06
Terrorists/
Insurgents

Dec‐05
Civilians
Security
Force
Personnel
Source: SATP
Azfer Naseem, CFA +92 111 262 111 [email protected] www.bmacapital.com Pakistan
Market Strategy
Nation unites further against terrorists: The incident has helped in further galvanizing
support for the ongoing operation against the militants, and have brought the entire nation
as well as the political parties on one platform. Government called an All Parties
Conference and Imran Khan participated on PTI’s behalf despite the party’s demand for PM
Nawaz Sharif’s resignation while also postponing the party’s shutdown call. Army operation
against the militants has already gained pace with air strikes in Khyber agency and
Peshawar action will likely further solidify support for the army’s operation against the
terrorists.
The current lot of terrorists seems to be half-trained; terrorist elimination may not be
far away: While the recent terrorist attacks have been severely deadly as terrorists have
targeted civilian soft targets, each could have been worse had the terrorists been able to
successfully carry out their plan. Armed forces were able to rescue 960 people inside the
school compound, and thus 141 casualties amounted to 13% of the people inside the
compound. A recent terrorist attack at Wagha Border on 2nd November left 62 dead.
However, terrorists failed to blow up the second suicide jacket which was found in the car
park where the crowd retreated to after the first blast. Terrorists attacked Karachi airport in
June 2014 and killed 26 people including security forces but were unable to cause major
harm to the airport infrastructure or aircrafts. As such, we believe the current lot of terrorists
are half-trained and Security Forces have been successful in destroying their first line of
defense. This leads us to believe that Pakistan is moving towards terrorist cleanup and
peace dividend may not be too far away.
GSP status could go as a collateral damage: The Government today announced the
withdrawal of the moratorium on death penalties so that the convicted terrorists could be
hanged. We believe this decision while largely welcomed by the general public could
potentially affect Pakistan's GSP status with the EU.
17 Dec 2014
2 Pakistan
Financials: Banks
Pakistan Banks
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