Pakistan OMCs: Volumes succumb to economic woes, (AKD Daily, Sep 04, 2019)
- Aug’19 volumetric offtake clocked in at 1.3mn tons, moving -16%MoM/-4%YoY with HSD sales continuing to crater on the back of persistent grey-product penetration, whereas FO’s decline seems to have slowed with volumes moving by -4%YoY/-38%MoM, contributing to the prevailing slowdown in POL volumes
- For 8MCY19, volumes amounted to 12mn tons, receding 16%YoY exhausted by weak power demand (cumulative FO sales dip 40%YoY), where monthly average sales have dropped to 255k tons vs. 427k tons during 8MCY18, indicative of subdued monthly demand, but significant annual deviation
- In terms of market shares, PSO/APL/HASOL account for market shares of 46/11/5% during Aug’19 where a comparison with FY19 cumulative shares of 45/10/8% reveals PSO successfully clawing back share during the outgoing month while HASCOL continued to lose out
- 16%YoY decline in cumulative POL product sales for 8MCY19 underpins a fall in demand for POL products from the industrial segment mainly as influx of grey product and economic slowdown weighs heavily, exacerbated by consumers buckling under the pressure of rising pump prices
- With major shifts underway, we advocate for building positions in APL, with the company having a strong balance sheet and steady pace of growth (devoid of any event-based developments, neutral to policy reforms or clearances) providing an attractive mix of defensive and growth credentials
AKD Research
Pakistan State Oil is a petroleum group based in Pakistan. Co.'s principal activities are the procurement, storage and marketing of petroleum and related products. Co. also blends and markets various kinds of lubricating oils.
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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