Pakistan _Cement_Cement dispatches continue cyclical trend, (AKD Daily, Dec 05, 2022)
Cement dispatches continue cyclical trend
Northern region sales to the domestic market clocked in at 3.16mn tons in the month,
posting a decline of 8.8%YoY while remaining flat on a MoM basis. On the flipside, local
cement sales in the South posted a gain of 6.6%YoY to 0.70mn tons in Nov’22. On a sequential basis, South sales were down by 6.7%MoM.
Exports from the North posted an increase of 1.5%YoY in 5MFY23 to 0.5mn tons, while
Southern region exports declined by 56.5% in 5MFY23 to 1.0mn tons compared to 2.3mn
tons SPLY.
Local construction sector was expected to remain under pressure even before the floods
hit parts of the country. With that in mind, the cement dispatches have recovered from
the impact of the floods as major rehabilitation drives uplifted cement dispatches in the
two prior months (Sep-Oct’22 average of 4.3mn tons, compared to 2.7mn tons averaged
in Jul-Aug’22).
Prices of Richards Bay coal have contracted significantly in the mid of Oct’22 with increase in the last of the month, currently hovering at around US$248/ton compared to
FYTD/CYTD avg. of US$292/280/ton.
High coal prices coupled with PkR depreciation and rising fuel costs have kept the cement
sector under pressure. The surprise hike of 100bps from the SBP has put further burden
on the sector, as several companies increased leveraging in order to fund capacity expansions.
Therefore, we continue to advocate for LUCK and MLCF with the companies having low
leverage on their balance sheets in an increasing interest rate environment along with
significant cost efficiencies.
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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