OMCs_A 'twist' in the CPI-linkage tale
​
We downgrade earnings expectations for AKD OMC universe citing the absence of tangible headway on margin increase for FY18/CY17F with present political circumstance weakening our thesis in the medium term. Key risks emanate from: 1) ECC delaying decision on margin increase for HSD and MOGAS sticking to PkR2.41/ltr for both segments, 2) clearance of circular debt and associated liquidity concerns, and 3) possible disruptions to logistics operations and approvals for storage and retail expansion hurting supply. In this backdrop, we continue to favor PSO where the entity is primed to continue benefitting from RLNG imports aided by a strong balance sheet (access to FE-25 trade loans) to support any volatility in PkR or oil prices. At an amended FCFF based TP of PkR498/sh, a BUY stance is implied with the stock trading at an attractive FY18/19F P/E of 6.2/5.3x.
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.