Morning Market Brief 15th Mar. 2021

Technical Overview

The Benchmark KSE100 index have created a bullish engulfing pattern on daily chart during last trading session after getting support from its major supportive region of 42,500pts. As of now momentum indicators are trying to generate bullish crossovers on daily chart but MACD on both timeframes is still in bearish mode therefore its recommended to stay cautious because current pull back could convert into a correction of last bearish rally or a cheat pattern. It's expected that index would try to continue its bullish pull back initially and would try to target 44,370pts-44,500pts region where its being capped by a horizontal resistance while breakout above this region would call for 45,000pts. Overall sentiment would remain bearish until index would not succeed in closing above 45,000pts on daily chart. But for day trading long positions with strict stop loss could be beneficial. On flip side in case of rejection from its resistant regions index would try find support at 43,350pts-43,200pts and breakout below this region would call for 42,800pts-42,500pts. On longer run index have completed 50% correction of its previous bullish rally but ABC formation is taking place therefore it's recommended to remain on buying side with strict stop loss and start profit taking around its resistant regions.

Regional Markets

World stocks firm as stimulus fuels economic optimism

Global stock prices were off to a solid start while U.S. bond yields hovered near a 13-month peak on Monday as investors bet U.S. economic growth will accelerate after the passing of a massive stimulus package.U.S. S&P500 futures rose 0.25% in early Asian trade, trading just below a record high level touched last week, while Japan’s Nikkei ticked up 0.1% MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed. “With the $1.9 trillion economic package approved, there are strong expectations of an economic recovery, which will be supporting cyclical shares,” said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui DS Asset Management. The U.S. House of Representatives gave final approval last week to the COVID-19 relief bill, giving President Joe Biden his first major victory in office.Read More...

Business News

Power tariff may go up to comply with IMF plan

The government may have to increase electricity tariff for consumers two times before December, in addition to making monthly fuel price adjustments and diverting substantial funds from taxpayers’ money to the power sector, to keep the International Monetary Fund programme going, according to sources. Background discussions with government officials suggested the exact sizes of and schedule for tariff increases and disbursement of enhanced subsidy payments would be taken up by the Economic Coordination Committee (ECC) of the Cabinet on Wednesday. And decisions in this regard would have to be finalised within the current month. The papers prepared by the power division with inputs from lending agencies suggest the average power tariff has to be increased by more than Rs3 per unit for all power companies including K-Electric in two coming quarters.Read More...

Govt won’t directly receive HIV grant

The federal government has lost its mandate to fight HIV as the Global Fund (GF) has declared Pakistan sub-recipient of its $72 million aid. The aid will be given to the United Nations Development Programme (UNDP) and the private sector which will spend it in the country. However, as UN agencies spend a large chunk of funds on management expenses, such as on salaries and security, only a meagre amount will actually be spent on the people of Pakistan, it is feared. Moreover, in case of an outbreak in places like Ratodero (Sindh), the UN agency may not be able to deal with it due to issues of access and mobility. However, Ministry of National Health Services (NHS) spokesperson Sajid Shah said the UNDP was a credible agency and hoped that it would use the funds most transparently.Read More...

PBF for uniform wheat procurement price

Pakistan Businesses Forum (PBF) on Sunday called for fixing a uniform price for purchasing wheat by the federal and provincial governments to avoid confusion among wheat growers. Talking to the media, PBF Vice President Ahmad Jawad cited that the federal government fixed wheat procurement price at Rs1,650 per 40kg, Punjab at Rs1,800 and Sindh at Rs2,000. To avoid a crises-like situation that struck the market last year, he said and added that growers wanted the government to chalk out a comprehensive plan for wheat procurement. He said the government should also provide bags to farmers timely to avoid crisis as the harvest has already started in early cultivation areas. Ahmad Jawad said last year’s situation where provincial government did not establish procurement centres at every level especially in Sindh, leaving them at the mercy of traders, who instead of buying wheat at then fix price of Rs1,400 per 40 kg, bought the commodity at Rs1,100 or even below price.Read More...

Pakistan earns $958 million from IT services’ export in 6 months

Pakistan earned US $958.110 million by providing different information technology (IT) services in various countries during the first six months of financial year 2020-21. This shows growth of 40.11 percent as compared to US $683.850 million earned through provision of services during the corresponding period of fiscal year 2019-20, Pakistan Bureau of Statistics (PBS) reported. During the period under review, the computer services grew by 44.25 percent as it surged from US $522.220 million last year to US $753.300 million during July-January (2020-21). Among the computer services, the exports of software consultancy services witnessed increase of 30.58 percent, from US $194.316 million to US $253.737 million, while the export and import of computer software related services also rose by 11.90 percent, from US $163.482 million to US $182.933 million. Read More...