Pakistan Fertilizers_Sector update May’18
After a promising start to CY18 (+27%YoY during 4MCY18), overall fertilizer sales came under little pressure for the first time in this calendar year owing to delayed start of the Kharif season. According to the latest figures released by NFDC, total fertilizer sales in May'18 clocked in at 669k tons, down 7%YoY. In tandem, urea sales have also decreased by 5%YoY to 494k tons in May’18. DAP offtake also remained dull during the month (down 15%YoY/15%MoM) owing to seasonal slowdown and inflated product prices. Despite this monthly slowdown, total fertilizer sales posted an encouraging growth of 19%YoY during 5MCY18 where urea offtake posted a robust growth of 29%YoY in the review period. The fertilizer sector has posted a strong recovery (market cap +11% CYTD) on improving fundamentals. Going forward, we anticipate the sector to remain in limelight on the back of: 1) lower inventory levels, 2) expected urea import at current elevated cost of imported fertilizers and 3) continuous upward trend in local product prices. Maintaining our Marketweight stance on the sector, EFERT (TP of PkR87.8/sh) remains our top pick on the basis of an attractive dividend yield of ~11% followed by FATIMA (TP of PkR45.1/sh) with its diversified product mix and an equally impressive dividend yield of above 10%.
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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