Pakistan Fertilizers_Sector update Oct'17
According to the latest figures released by NFDC, total fertilizer sales in Oct'17 stood at 916k tons against 942k tons sold in Oct'16 (+45%MoM/-3%YoY), mainly due to higher Urea sales of 375k tons during the month (up 2.1xMoM/+4%YoY) on account of high demand Rabi season. DAP offtake on the other hand remained on the lower side, sliding by 19%YoY to 387k ton in Sept'17 on account of higher sales in the previous months. On the export front, companies were able to export another 108k tons of Urea in Oct'17, taking total Urea export offtake to 530k tons against the allocated quota of 600k tons. On a cumulative basis, total fertilizer sales posted encouraging growth of 21%YoY to 7.58mn tons during 10MCY17 where urea offtake posted a decent growth of 18%YoY to stand at 4.52mn tons. Near-term checkpoints for the fertilizer industry remain in the form of: 1) ongoing Rabi season to continue driving demand, 2) international pricing dynamics (urea prices rebounded to US$282/ton, up 48% since low of US$190/ton in Jul'17), and 3) normalization of inventory level (urea inventory standing at 690k tons vs. 1.70mn tons in Oct'16). Maintaining our Marketweight stance on the sector, FATIMA (TP of PkR45.1/sh) remains our top pick with its diversified product mix, continuous improvement in market share and concessionary gas pricing.
Fauji Fertilizer is engaged in the manufacturing, purchasing and marketing of fertilizers including the investment in other fertilizer manufacturing operations. As of Dec 31 2004, Co. had a design capacity of 2,455,000 tonnes for urea production and 445,000 tonnes for DAP production.
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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