Pakistan Cement_May'18 Dispatches Review
After posting record high dispatches in previous months (reached a monthly peak of 4.65mn tons in Mar'18), cement dispatches growth came into the red zone for the first time in FY18 owing to seasonal slowdown on arrival of Ramadan in May this year. As per provisional statistics, total dispatches during May'18 declined by 13.8%MoM/1.5%YoY to 3.65mn tons, primarily led by 14.0%MoM/4.5%YoY fall in domestic dispatches to 3.25mn tons. Exports on the other hand, continue to recover, going up 32.2%YoY to 0.409mn tons in May'18. On a cumulative basis, total dispatches growth reached 13.5%YoY in 11MFY18, significantly higher than the 5.8%YoY growth witnessed in 11MFY17, primarily led by domestic demand growth of 15.2%YoY. With the elections drawing close, we anticipate total dispatches to remain on the higher side (despite seasonal slowdown in the month of Ramadan and eid holidays) for the remainder of the year. We derive our thesis from: 1) strong PSDP and provincial spending in upcoming month ahead of national polls (32% unutilized federal PSDP at the end of May'18) and 2) impressive growth in private sector credit related to construction activity (+22.3%YoY in Apr'18). While risk of pricing indiscipline prevails with each expansions (particularly for South players) coupled with higher coal prices, we believe recent cement price recovery (+PkR55/bag in North since Feb'18), offer attractive entry points especially when the sector has corrected 11.5% since May’18 . While maintaining our preference for the sector (particularly North players), our top picks include well diversified, energy efficient companies like LUCK (TP: PkR849/sh), MLCF (TP: PkR108/sh), PIOC (TP: PkR109/sh) and DGKC (TP: PkR198/sh) in our Cement Universe.
Co. is engaged in the production and sale of Ordinary Portland and Sulphate Resistant Cements.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.