Pakistan Fertilizer: Nominal growth in urea off take 3% YoY to 625k tons
- Urea offtakes during Jun 2019 is expected to depict the growth of 3% YoY to 625k tons. The nominal increase in sales is due to the excessive purchasing by dealers/farmers in previous months amid an expected hike in prices due to an upward revision in gas tariff from July 2019.
- Similarly, Urea production during Jun 2019 is expected to post growth of 25% YoY due to a resumption in production by Fatima Fert (FATIMA) and Agritech (AGL). Fauji Fertilizer (FFC) and Engro Fertilizer Limited (EFERT) production is expected around 214k tons 177k tons, up 1% and 27% respectively. Industry’s closing inventory for Jun 2019 expected around 200k tons.
- Amongst companies, FFBL is likely to record the highest growth of 47% YoY in its urea offtake to 83k tons, followed by FFC; up by mere 22% YoY to 263k tons, while EFERT is expected to post a decline of 29% YoY to 173k tons.
- Industry’s DAP sales during Jun 2019 is likely to decline by 21% YoY to 150k tons. The largest fall is expected in FFC 65% YoY to 23k tons, followed by EFERT 53% YoY to 30k tons. However, FFBL is expected to witness an accretion in DAP volumes; up by 58% YoY to 61k tons.
- Key risks to fertilizer sector include, 1)an un-favorable settlement of GIDC, 2) poor crop season, and 3) increase in gas 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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