Pakistan Refinery - Near term profitability to remain strong! (AKD Daily, May 30, 2023)
AKD Daily
Pakistan Refinery - Near term profitability to remain strong!
- Global prices of diesel and petrol have corrected significantly by ~46% and 50% since the start of the calendar year to presently stand at US$86/90 per bbl
- Naturally, domestic refinery margins have fallen sharply from their multi-year highs from US$26/45/bbl for MS/HSD back in June’22, to presently stand at US$-0.2/2.6/bbl (down 100%/94%).
- Assuming Arabian gulf gasoline/gasoil prices increase by +10% from current levels, this is expected to raise domestic MS/HSD prices by PkR18/21 per liter, respectively.
- Moving forward, sector profitability may remain firm in the near term as refined product margins are expected to remain strong during 2Q/3QFY23 alongside healthy inventory gains amidst increasing ex-refinery prices
- Overall, given strong retail margins, our preference stems towards ATRL majorly due to consistently higher white-product throughput and one of the lowest FO yields in the sector.
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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