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European stock markets steady at open

Dec 03, 2020: European stocks steadied at the open Thursday, as traders weighed Covid vaccine hopes against rising infections and uncertainty surrounding a post-Brexit trade deal, OPEC oil output and US stimulus package.

London's benchmark FTSE 100 index edged up 0.1 percent to 6,468.54 points.

In the eurozone, Frankfurt's DAX 30 index dipped 0.1 percent to 13,298.34 points and the Paris CAC 40 eased 0.1 percent to 5,580.26.


OMCs post highest ever monthly sales since Sep’18

December 3, 2020 (MLN): The overall sales of Oil and Marketing Companies (OMCs) for the month of November 2020 witnessed a growth of 21%YoY to 1.72 MTs as compared to 1.42 MTs in the same month of last year, bringing industry volumes for 5MFY21 to 8.16 MTs, up by 11% YoY.

 To note, the November’s sales figures are the highest ever monthly sales of pertoleum products since September 2018.

On a sequential basis, OMCs’ volumetric sales remained relatively flat, posting a meek rise of 1% MoM from 1.69 MTs.

The YoY growth in sales of OMCs is driven by High Speed Diesel (HSD) demand which improved by 29% YoY to 802 MTs. According to Topline Securities, the pickup in HSD volume is largely attributable to continued restrictions on the border due to COVID-19 which is restricting inflow of smuggled product and overall pick-up in economic activity following improvements in COVID-19 situation.

In addition to this, the sales of Motor Spirit (MS) and Furnace Oil (FO) also posted notable growth of 20% YoY and 18% YoY to 693 MTs and 170 MTs, respectively.

According to Fortune Research, MS continued to post impressive sales numbers for the 4th consecutive month and its current monthly sale is even higher than 5-year average MS monthly sales of 0.62 MTs. The growth was largely supported by impressive car and motorcycles sales during growth FY21TD, lower retail prices by approx. 12% against same period last year and lifting-off of lockdown restrictions resulting in resumption of inter-city travelling.

On monthly basis, growth in sales volume is linked to 20% MoM incline in HSD and 1% MoM jump in MS. On the other hand, FO volumes declined 41% MoM.

Cumulatively, during 5MFY21, industry volumes surged 11% YoY, accredited to surge in FO, HSD and MS sales which jumped by 31%, 13% and 8% YoY respectively.

Company- wise, BYCO posted the largest volumetric growth of 97% YoY in sales of petroleum products, driven by 7.3x YoY increase in FO sales. This was followed by 33% YoY rise in Shell’s volume and 15% YoY increase in PSO volumes. The strong consumption of HSD was the major contributor in increasing Shell’s and PSO’s sales volume.

With regards to market share, PSO grasped the biggest market share of 44%, down by 1ppts MoM, while BYCO’s market share improved by 2ppts MoM to 7%.

On the other hand, APL’s share dropped to 8% from 10% in the previous month. while SHEL and HASCOL maintained its market share at 8% and 5% in Nov’20 respectively.

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OPEC+ to meet for talks on output policy

December 03, 2020: The group of the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, will meet on Thursday over a possible extension of production cuts over the coming months.

The meeting via video call, scheduled to be held later in the day, was postponed from Tuesday and comes as the oil market recovery remains fragile amid the raging COVID-19 pandemic.

Ahead of the upcoming talks, "key players in the 23-nation alliance are making diplomatic efforts to resolve a dispute -- centered around Saudi Arabia and the United Arab Emirates -- over how much crude to pump in the new year," Bloomberg News reported.

As investors await the group's key decision on output policy, analysts warn that "if their pact breaks down, prices would sink again," the report said.


Air Link Communication submits its prospectus for proposed IPO

December 03, 2020 (MLN): Air Link Communication Limited (Air Link or the Issuer), a leading distributor of mobile phones such as Apple, Samsung, TCL, Techno and Huawei in Pakistan has applied to the Exchange for revalidation of PSX’s approval earlier granted on February 24, 2020 to the Draft Prospectus of the Issuer.

In this regard, JS Global Capital Limited, the consultant to the Issue /Lead Manager, has updated the contents of the Issuer’s Prospectus and has resubmitted the same to the PSX for its approval.

According to the notice issued to Exchange, Air Link shall be issuing 90 million ordinary shares (consisting new issue of 60 million ordinary shares and an offer for sale of 30 million ordinary shares) at a floor price of PKR 65 per share using the 100% Book building Method Details about the Issuer and the Issue can be reviewed through the attached Draft Prospectus of Air Link.

Moreover, the Draft Prospectus of the company is being placed on the PSX website for seeking public comments.

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Circular debt in gas sector grows to Rs 350...

December 03, 2020 (MLN): The growing circular debt is not only plaguing cash-bleeding power sector where it was accumulating at supersonic speed and crossed the Rs 2,253 billion mark, but now the circular debt in the gas sector is also on the scene, surging to Rs 350 billion due to various inefficiencies and policy errors.

According to the ‘The News’, firstly, the gas prices were not passed on by increasing tariff for some time. Secondly, the circular debt has also been piled up on the back of RLNG. Thirdly, the Unaccounted for Gas (UFG) is also causing the hike.

“At this moment, the circular debt built up into gas sector has touched around Rs 350 billion,” former Economic Adviser Dr Khaqan Najeeb told The News.

Unaccounted for gas (UFG) is causing huge losses and is becoming increasingly difficult to control under the current large unbundled system.

As per media group, there is a need to set up separate cost centers in the form of separate legal entities so that accounting and operational performance can be measured with great accuracy and reliability. Existing consumers are accustomed to lowering domestic gas prices and are unwilling to pay the delivered cost of LNG. This has created a significant discrepancy for utility companies. The power sector has not yet taken the expected volume of LNG and the zero-rated industry is not paying the full price of LNG. In addition, LNG is being diverted to lower-paying domestic consumers. Hence, the trend of cost-side revenue for utility companies is growing exponentially.

Considering piled-up difficulties, the government is planning an aspiring reform to improve the gas sector, under which the unbundling of two giants in different distribution companies is on the cards, The News said.

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