Morning Market Brief 25th Jan. 2021

The Benchmark KSE100 index is trying to penetrate below supportive trend line of its ascending price channel on daily chart since last three days, meanwhile its facing rejection from a strong horizontal resistant region. As of now it's expected that index would face initial resistance at 46,100pts and in case of penetration above this region index would call for 46,350pts and 46,545pts. It's expected that index would remain under pressure after retesting its resistant regions and overall a volatile session could be witnessed therefore it's recommended to stay on selling side, while selling between 46,100pts-46,350pts with strict stop loss of 46,600pts could be beneficial for coming days. After two consecutive Doji formations on weekly chart index have entered uncertain region and it would remain under pressure until it would not succeed in closing above 46,600pts. In case of rejection from its resistant regions index could slide downward till 45,500pts initially where it would try to establish ground above a strong horizontal supportive region but breakout below that region would call for fresh bearish rally for correction of its last bullish spike on weekly chart which may prolong towards 44,500pts or 42,500pts in coming days. Currently index have completed 5th primary wave of its bullish Elliot wave which started from 27,000pts after 74.6% expansion of its third wave. While on longer run index also have completed 74.6% correction of its previous bearish Elliot wave which started from 53,127pts and ended at 27,046pts. Overall scenario is trying to push index for a correction and it can be said that index needs a healthier correction before breakout of 46,500pts-47,000pts.

Asian shares were on the defensive on Monday as rising COVID-19 cases and doubts over the ability of vaccine makers to supply the promised doses on time soured risk appetite. MSCI’s broadest index of Asia-Pacific shares outside Japan was barely changed at 718.72. The benchmark is below the record high of 727.31 touched last week but up 8.5% so far in January, on track for its fourth straight monthly rise. Japan’s Nikkei fell 0.1%. Australian shares were higher after the country’s drug regulator approved the Pfizer/BioNTech COVID-19 vaccine with authorities saying a phased rollout will begin late next month. Global COVID-19 cases are inching towards 100 million with more than 2 million dead, though financial markets have been buoyant on hopes of a vaccine and a quick economic revival.Read More...

The country’s oil import bill witnessed reduction of 22.32 percent during the first half of the current fiscal year as compared to the corresponding period of last year, Pakistan Bureau of Statistics (PBS) reported. The overall oil imports during July-December (2020-21) were recorded at $4771.471 million against the imports of $6142.197 million during July-December (2019-20), showing decline of 22.32 percent, according to latest PBS data. The commodities that contributed in decline of oil import bill included petroleum products, the imports of which decreased by 16.30 percent, from $2591.065 million last year to $2168.674 million during the current fiscal year.Read More...

Country’s IT exports has registered 40 percent increase during period from July to December 2020 as comparing to corresponding period of financial year 2019-20,said the performance report of Pakistan Software Export Board (PSEB), the attached department of the Ministry of IT and Telecommunication. According to the report, Information and Communication Technology (ICT) export remittances including export of Telecommunication, computer and information services, have surged to US $958 million at a growth rate of 40% during July-December of FY 2020-21, in comparison to US $684 million during July-December of FY 2019-20. Lauding the increase in IT exports, Federal Minister for IT and Telecommunication Syed Amin Ul Haque said this is the highest growth rate for the FY 2020-21 (July-December). He directed making special efforts to increase IT exports and encourage IT companies.Read More...

The Central Power Purchasing Agency and the National Transmission & Despatch Company — both key federal entities — have opposed transmission licence to the Khyber Pakhtun­khwa Transmission and Grid System Company (KPTGC) that seeks to operate about 7300MW of power supply system in the province over a period of five to 10 years. In response to comments sought by the National Electric Power Regulatory Authority (Nepra) from stakeholders over the KPTGC’s request for grant of provincial transmission licence, the Punjab government has, however, supported the request while demanding that the proposed licence should ensure provision of minimum technical and human resource capital as and when required and the provincial transmission company should provide open access and participate in the wholesale electricity market.Read More...

Private sector borrowing from banks — said to be the most important macro indicator — went up sharply by over 65 per cent in December 2020, latest data issued by the State Bank (SBP) shows. Private sector borrowed Rs215.5 billion from banks since July to Jan 8, 2020-21 compared to Rs130.2bn in the same period last year amid accelerated economic activities. The rebound in December borrowings emerged as the turning point against the sharp decline — by 88pc — witnessed in the previous five months of the current fiscal year compared to the same period in FY20. In its monetary policy issued on Friday, the SBP said it expects growth rate slightly above 2pc despite upside risks.Read More...