Public offering by Hi-Tech Lubricants

Hi-Tech Lubricants Limited (HTLL) will become the first lubricant company to go public, by issuing 29 million shares at a floor price of PkR37/share through book building of 75% of the total issue size (6th and 7th January) and remaining 25% to offloaded through general public subscription (25-27 January 2016).
HTLL is expects to raise at least PkR1.07 billion from the listing which will be utilized in expanding its footprint in the lubricants market through forward (establishing retail network) and backward integration (construction of an additional filling line).
HTLL has an established presence in the automotive sector through its “ZIC” brand (14% market share in the passenger car sub-segment) contributing 56% to overall revenues becoming a key growth driver for the company.
Post IPO, the company plans to focus on diesel and motorcycle sub-segments of the automotive market (contributing 31% and 9% to revenues) through competitive pricing and cost efficiencies of bulk imports (utilizing the blending plant).
With an aggregate market share of 6% in lubricants, robust 5-year revenue CAGR of 20%, Gross Margin averaging 24% and Net Margin of 6%, HTLL’s fundamental outlook remains promising.
HTLL) is engaged in the import and distribution of petroleum products/lubricants under the brand name of “ZIC” in Pakistan. It imports lubricants from South Korea, which has the single largest Petrochemical Chemical Complex in the world.
HTLL has a network of more than 150 distribution channels across all major cities of Pakistan. The Company diversified from trading to manufacturing and established a state of the art blending plant at Lahore that became operational in 1QFY16.
HTLL plans to utilize IPO proceeds for funding its investment plan of PkR1.25 billion which envisages the development of a service delivery channels with 37 retail service outlets (9 owned and 29 rentals) and additional filling lines (expected to be streamed online by August this year at its Blending Plant (recently set up with a total investment of PkR776 million).
Analysts believe healthy demand exists for its products. However the company has been facing hurdles in meeting this demand due to shortage of product supply on account of 1) time lag in imports and 2) foreign market specified product sizes of finished products, rendering them ineffective for local market, especially for motorbike segment.
Additionally, HTLL’s newly setup Blending Facility is expected to provide rationalized cost benefits to the company as it is likely to now import in bulk as compared to sealed cartons. The new plant will also produce its own High Density Poly Ethylene bottle/Cap and filling lines for imported lubricants, further extending its cost-saving benefits.
The company has been able to keep costs of goods sold (COGS) at a steady 76% of total revenues, indicating preferred pricing from the supplier and ability to pass on the impact of changes in the PkR/US$ parity. As a result, gross margins have been maintained at a stable 25% during the last five years.
That said, administrative and distribution costs have increase by a 5-year CAGR of 26% as the company increased its footprint in the sector. As a result, bottom-line of the company has recorded a 5-year CAGR of 6.2% during FY10-FY15.

Pakistan: Time to oppose deep sea fishing

Local fishermen have always opposed operation of deep sea fishing trawlers in the exclusive economic zone (EEZ). However, the unlawful activity goes own because certain quarters in the government are more than keen in making small personal gains and depriving the country from the catch as well as huge foreign exchange that could be earned from export of this catch.

According to a Dawn report the federal government has invited applications for issuance of licences to deep-sea fishing trawlers for operating in the exclusive economic zone (EEZ).  Marine Fisheries Department (MFD) plans to issue 100 licences for various fishing vessels in the EEZ between 20-200 nautical miles.

According to the break up, the government aims to issue 25 licences for Tuna Longliners fishing vessels of up to 350 gross tonnage (GT), followed by 25 licences for Tuna Longliners from 351-1,000 GT. MFD will issue 30 licences Stern Trawlers (Single Boat Pelagic/Midwater Trawling) up to 350 GT, 15 licences for Squid Jiggers up to 350 GT and five licences for Tuna Purse Seiners up to 700 GT.

There is need to strongly oppose the move, especially because MFD and Food and Agriculture Organization (FAO)  has already undertaken a project called ‘Fishing Resources Assessment Project’ which warned of depleting fish stocks. Reportedly fish and shrimp landings have already reduced to 40 per cent as compared to above 90 percent three years ago. It is feared that if these trawlers are allowed fishing in Pakistan’s territorial waters then the stocks would further deplete.

MFD and Korangi Fisheries Harbour Authority (KFHA) have jointly defended the decision saying the Korangi Fish Harbour was primarily developed to promote deep-sea fishing beyond territorial waters (from 12 up to 200 nautical miles referred as EEZ, the water area measuring about 240,000 square kilometre) which falls under the federal jurisdiction. To protect the interest of local fishermen, a buffer zone from 12 to 20 nautical miles has been created where no foreign fishing vessel under joint venture with Pakistani nationals can operate.

Pakistan Fisherfolk Forum (PFF) staged sit-in against issuance of licences to foreign deep sea fishing trawlers in front of Korangi Fisheries Harbour. Chairman PFF Mohammad Ali Shah said the fish stock has already shrunk due to over fishing and increasing marine pollution and these deep sea trawlers would further cause destruction.

                                                                                                                                                       

Coupon rate for the 3-Year Government of Pakistan Ijara Sukuk

State Bank of Pakistan (SBP) has announced1st Rental coupon rate for the 3-Year Government of Pakistan Ijara Sukuk GIS-16 (auction conducted on December 15, 2015) on Friday 18^th December 2015. The first rental coupon rate is 5.8946 percent and payment date is 18^th June 2016.

Is India Secular?

Without digging too deep into the history of Hindustan, it may be said very conveniently that the rulers have always been hiding their real face behind two strong veils i.e. democracy and secularism. Both these terms have been used to deceive the international community. If one probes the events taking place with the beginning of the division of the subcontinent into Pakistan and Hindustan and particularly over the last two decades, it becomes evident that democracy is a hoax and secularism is the name given to vandalism.
To read details visit http://southasia.com.pk/cs-3.html