Flash Note: Pakistan Fertilizer: Urea prices up lesser than cost increase
- As per our channel checks, urea prices are up by Rs10 per bag to Rs1,804 per bag (DLT-Dealer Transfer Price) against increase in natural gas cost by Rs200 per bag.
- Discussion between fertilizer manufacturers and Govt. official continued for weeks. We now believe talks have concluded as Govt. promised to settle Gas Infrastructure Development Cess (GIDC) issues.
- The Advisor to PM on industries, Mr. Razaq Dawood initially agreed to increase urea prices by Rs100 per bag, however, Prime Minister did not agree to increase prices as in future GIDC concession would be given to manufacturers.
- Our channel checks suggest, for one to two months urea prices will remain at Rs1,804 per bag (MRP: 1,840 per bag) as GIDC settlement can take few more weeks. We have taken out earnings impact on companies for their two months sales in below table.
- Most importantly, the Govt. fixed imported urea prices at Rs1,800 per bag which also signals Govt’s. unwillingness to burden farmers with higher urea prices.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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