Saturday, 31 August 2013

Karachi Stock Exchange: Cenment Sector Analysis

Cements: Dark Clouds

  • Our channel checks confirm that Lucky Cement, the largest cement manufacturer in Pakistan, has resigned from APCMA.

  • We believe that this may be in connection with the recent power tariff increase and disagreements among cement manufacturers related to passing on of cost increase.

  • This may have detrimental effect on cement price unless issues among APCMA members are resolved.

  • Historically  speaking,  issues  among  cement  manufacturers  led  to  price  wars  and  a  risk  of  that  happening  again  might  be  evident from recent events.

  • We advise caution at current levels and will revisit our investment case on the cement sector.

  • We have done a sensitivity of cement price on earnings of Elixir’s cement universe below.

1 comment:

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