Pakistan Cement_Budget’20 will make for stormy seas
- Budget’20 is going to weigh significantly on local cement manufacturers with little support for demand while additional burden in the form of duties and taxes will further put pressure on margins.
- Though target for Federal PSDP is expected to increase, we expect releases to remains stagnant or post a muted growth as government looks to control the burgeoning fiscal deficit.
- Adding fuel to the fire will be 9.7mn tons of capacity expected to come online in FY20 , which coupled with muted demand will put further pressure on local prices after local prices have already declined by PkR66/bag in last 2 months.
- Among other revenue measures, duty on import of coal and FED on cement bags are also expected to be jacked up, increasing jeopardy of already under pressure margins of local cement players.
- All in all, the continued decline in prices, over-capacity in local markets and further increase in duties will continue pressure on stock prices in short term where we expect LUCK to be the least affected while PIOC to face the highest brunt.
AKD Research
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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