Pakistan Banks : Reinstating Coverage – Overweight Maintained
Latest data denotes OMC sales for Aug’19 dropped 20/4% MoM/YoY to 1.29mn tons. The decline was witnessed across the products led by drop in black oil and diesel sales. Retracement in FO sales was noted down 39/4% MoM/YoY amid lower offtake by power sector while HSD sales hit a 7-yr low of 407k tons down 30/17% MoM/YoY.
On the other hand, the retail fuel market saw MOGAS sales climb 5% YoY to stand at 634k tons. On a MoM basis, however, the sales saw a dip of 4% MoM.
Overall, in 2MFY19, industry sales registered at 2.3mn tons, a reduction of 7% YoY. While black oil sales have remained relatively muted during the period, major attrition has emanated from 18% YoY drop in HSD sales.
The overall market share (M/S) of the key players depicts that PSO has captured the withering HASCOL share to establish itself as the only player with double-digit growth trajectory on YoY basis. Resultantly, PSO’s share improved by 8.6ppt and 2.7ppt YoY to 45.9% and 42.0% in HSD and MOGAS segment, respectively.
We maintain our Marketweight stance on the sector and continue to favor APL as our top pick amongst BMA OMC universe.
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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