Automobile Assemblers: PSMC subjugates year-end effect
- According to the latest data released by Pakistan Automotive Manufacturers Association (PAMA), total passenger car and LCV sales for Dec’19 clocked-in at 12,103 units, recording an uptick of 23% MoM
- Cumulatively, car sales for 1HFY20 declined by 44% YoY to 67,510 units owing to macro-economic factors including higher financing rates and lower economic activity.
- OEM-wise, PSMC outperformed the industry, recording an uptick of 49% MoM to 8,732units during Dec’19. Key outperformance was witnessed in Wagon-R (+88% MoM), Bolan (+89% MoM) and Ravi (+202% MoM). INDU and HCAR, however, fell victim to the year-end phenomenon and recorded declines of 12% MoM and 23% MoM, respectively. INDU’s Corolla was able to insulate itself from December’s effect and recorded sales of 2,085units during Dec’19, down by just 4% MoM
- Tractors sales remained under stress as sales for the month stood at 1,145units, down 37% MoM. Tractor sales have recorded a cumulative decline of 38% YoY in 1HFY20.
- Trucks and buses sales were lower by 34% YoY and 19% MoM with the segment reporting sales of 312 units during Dec’19. On a cumulative basis, sales dipped by 48% YoY in 1HFY20 on the back of slowdown in economic activity.
- We maintain our neutral stance on the sector. We believe the current aggressive decline in automobile sales may taper off in 2HFY20.
BMA is amongst the leading financial groups in Pakistan. BMA Capital’s core areas of business include Capital Markets, Corporate Finance & Advisory, Asset Management, and Financial Products Distribution. BMA Capital is the leader in privatisation advisory in Pakistan, having successfully advised on over 50% of all privatisations in Pakistan, by value, in transactions valued in excess of US$4 billion. Recent transactions include joint lead managing the $813 million GDR Offering of 10% of OGDCL on the London Stock Exchange in 2006-07, and advising Etisalat on their successful acquisition of a 26% strategic stake in Pakistan Telecommunications Company Limited (PTCL) for US$2.6 billion, the largest M&A transaction and foreign direct investment in Pakistan’s history. The firm is among the top brokers in the Pakistan equity and treasury markets, and is among a handful of firms that comprehensively cover all segments of the capital markets. This is supported by a very strong and independent research capability, which is quoted regularly in both local and international media. BMA Capital’s retail brokerage brand, BMA Trade, has launched a nationwide network of branches as well as a comprehensive online trading platform, enabling investors across Pakistan to take part in the capital markets.
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