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Pakistan Cement_Sept’17 Dispatches Review

As per provisional data released by APCMA, total dispatches during Sept'17 dropped 5.1%YoY/22.9%YoY, primarily led by significant decline in export dispatches to 0.372mn tons (-28.8%YoY/-9.2%MoM) and flattish domestic demand at 2.53mn tons (-0.2%YoY/-24.6%MoM). Local dispatches growth came into the red zone again owing to slow demand due to Muharram factor. On a cumulative basis, total dispatches growth reached 12.0%YoY in 1QFY18 vs. 8.3%YoY growth recorded in 1QFY17 led by domestic demand growth of 18.3%YoY in 1QFY18 vs.9.5%YoY in 1QFY17. Post Eid-ul-adha, extended rainfall and Muharram season, we anticipate total dispatches growth to remain healthy going forward. We derive our thesis from: 1) strong PSDP and provincial spending in 2HCY17 running up to national polls (83% unutilized federal PSDP at the end of Sept'17) and 2) impressive growth in private sector credit related to construction activity (+40.9%YoY in Aug'17). While risk of pricing indiscipline prevails with upcoming expansions, we feel current price levels offer attractive entry points especially when growth dynamics remain intact. Maintaining our preference for the sector, our top picks include LUCK (TP: PkR1,150/sh), DGKC (TP: PkR260/sh), MLCF (TP: PkR166/sh) and FCCL (TP: PkR56/sh).

Maple Leaf Cement Factory Ltd.

Maple Leaf Cement Factory is engaged in the production and sale of white cement, grey cement and clinker. Co. is a subsidiary of Kohinoor Textile Mills Limited.

AKD Securities Limited
AKD Securities Limited

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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