Pakistan Strategy_Gas Price Hike Gets ECC's Approval - Inflationary Pressures to Follow, (AKD Daily, Jul 13, 2022)
Gas Price Hike Gets ECC's Approval - Inflationary Pressures to Follow
ECC approved gas tariff hike to be implemented form 1st July 2022, after a break of al-most 21 months. This will increase cost of doing business and result in demand destruc-tion but will provide much needed fiscal discipline, as per IMF’s demand.
Inflationary concerns may worsen as headline inflation is expected to inch up by ~66bps on MoM basis, due to wt. avg increase of 90% for domestic consumers.
Export-oriented sector is expected to feel the heat due to ~77% increase in their tariff, while for textile sector it is proposed to increase by ~38%, from US$6.5 to US$9/mmbtu.
Gas price hike is expected to bode well for the E&P Sector as cash collection against sup-ply of gas would improve. PPL to be a major beneficiary due to high contribution of gas revenues.
We believe that this development bodes well for E&P sector as it will ease liquidity pres-sure of the sector. Therefore we opine that PPL and OGDC will remain in limelight. Simi-larly, EFERT and FFBL will remain beneficiary due to their gas pricing structure.
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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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