OMC: Rising prices and FO decline pressure volumes
April POL product offtake amounts to 1.86mn tonnes moving +4%MoM but slowing -16%YoY largely from halving of FO volumes (+1%MoM/-51%YoY) where ex-FO the industry endured stable volumes (+2%YoY/+5%MoM). Cumulative product volumes for 10MFY18 stood at 20.08mn tonnes lower by 5%YoY where secluding the secular slowdown in FO sales (-23%YoY) gives us total industry volume growth of 5%YoY, led by MOGAS/HSD sales growth of 10%/2%YoY. During a period where pump prices for MOGAS/HSD have climbed 11.0/12.2% CYTD to reach a 4MCY18 average of PkR85.02/95.16/ltr, an ascent of +21%/+20% from average pump prices during 4MCY17, the possible suppression of discretionary demand can’t be ruled out as both segments approach their summer seasonal upswings. OMC-wise market shares for listed players remained range-bound with PSO/APL/SHEL reaching market shares of 41.4/10.9/8.3% for April'18 (vs. 39.3/11.8/7.9% during March'18) while that of HASCOL grew to 15% (vs. 13.7% for March'18) of total product volumes with its share in MOGAS jumping to 15.6% (vs. 12.0% last month). We retain our BUY call on PSO which trades at appealing FY18E/19F P/E of 5.9x/6.3x.
Hascol Petroleum Limited is a Pakistan-based company, which is engaged in procurement, storage and marketing of petroleum and related products. The Company is involved in the sale of petroleum products, such as fuel oil, high speed diesel, gasoline, Jet A-1, liquefied petroleum gas (LPG) and lubricants. The Company offers products, such as Tiger Super, Rocket Diesel and Furnace Oil. The Company offers Fuchs Lubricants products, which include corrosion preventives, quenching oils, industrial lubricants, open gear lubricants, greases, automotive oil and metal working fluids. The Company also markets LPG as an automotive fuel through its retail network. The Company is engaged in owning, leasing and renting oil storage facilities, as well as importing petroleum products. The Company has storage facilities at Machike, Shikarpur and Daulatpur. The Company sells its product to dealers, government agencies and autonomous bodies, independent power project and other corporate customers.
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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