AKD Securities Limited Equity Research – Daily Report

Karachi, May 03, 2019 (PPI-OT): Pakistan OMC’s: Spring for some, winter for others

Apr’19 volumetric offtake clocked in at 1.7mn tonnes, moving +14%MoM/-11%YoY with FO sales continuing to crater, albeit at a lessening pace (+48%MoM/-26%YoY), while MO-GAS/HSD offtake shifted +5/+13%MoM and +4/-16%YoY.

Cumulative 10MFY19 volumes amounted to 15.2mn tonnes, receding 24%YoY exhausted by weak power demand (cumulative FO sales dip 57%YoY), where monthly average sales have dropped to 243k tons vs. 593k tons during 10MFY18, indicative of subdued monthly deviations,

In terms of market share, PSO/APL/HASOL stood at market shares of 44/10/7% during Apr’19 where a comparison with 10MFY19 cumulative shares of 41/11/11% reveal PSO successfully clawing back market share during the outgoing month while HASCOL continues to lose.

24%YoY decline in cumulative POL product sales for 10MFY19, underpins a fall in demand for POL products from the industrial segment mainly as influx of grey product and economic slowdown weighs heavily while retail posts a late recovery with an increase of 1%YoY for 10MFY19.

With major shifts underway, we advocate for building positions in PSO, standing to gain from circular debt clearance and near term inroads into the refining space, pushed for by state level (mostly G2G) investments.

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