Downstream Oil: Sales looking for a crest
Exceedingly strong sales growth in the POL products portfolio of local OMCs continued in May'17 with sales of 2.44mn tones in the month (up 10%MoM), taking 11MFY17 total industry sales to 23.5mn tones (climbing 11%YoY and crossing FY16 total sales). With cumulative sales remaining above long term 5/10YR CAGR of 6.3/4.0% these levels show the positive impact of 'lower for longer' oil prices, depressed borrowing costs and constrained CNG/fuel alternatives. Company wise sales indicate some headwinds in PSO's strategy to regain market share (sales for the May were -10%YoY), APL paired back lost market share with a strong showing in May'17 (sales up 10%MoM), yet HASCOL continued to surmount the latter (total sales of 0.25mn tonnes during May'17 up 50%YoY). We have a BUY call on PSO with an FCFF based TP of 539/sh. At current levels the lure of attractive multiples (FY17E/18F P/E of 8.5/6.7x) overcomes strains on short term liquidity impediments, in our view.
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.
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