Pakistan Steel_Scrap at 7yr high - rebar prices to increase further, (AKD Daily, Jul 06, 2021)
AKD Daily
Pakistan Steel: Scrap at 7yr high - rebar prices to increase further
- International scrap prices have increased by 21% CYTD to currently stand at US$517/mt compared to CY20 avg. of US$287/mt as global demand recovers with economic activity picking up while supply remains restricted
- Additional stimulus to scrap prices has been provided by China lifting restrictions on import of scrap as local Chinese scrap prices made multi year highs on account of robust demand.
- Due to robust demand (derived steel demand increased by 18% in FY21), local players were able to manage increase in input costs (scrap prices up by 90.5% for FY21) through swift pass on (local rebar prices up by PKR36-40K/ton or up by 36.4% FYTD).
- ASTL has posted performance of 92% against 75.1% of KSE-100, an outperformance of 16.9% since Mar’20 while moving forward, with earnings growth of 17.0% for FY21-24 and PEG of 0.48x, we expect the stock to continue performing with our TP of PkR64/sh providing an upside of 45.1%.
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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