Morning Market Brief 29th Jan. 2021

The Benchmark KSE100 index had faced rejection from an ascending trend line on daily chart during last trading session, meanwhile daily momentum indicators have given a serious pull back signal which indicates that index is ready for a deep correction in coming days. For current trading session it's expected that index would try to retest its resistant regions but overall sentiment would remain bearish until index would not succeed in closing above 46,650pts or 47,000pts. Daily Stochastic and MAORSI have generated a bearish crossover on same time while daily MACD have lost strength while price was posting a new high therefore it's expected that now indicators would lead the price and index would start sliding downward in coming days after a spike during current trading session. Initially index would try to establish ground above 46,100pts but in case of penetration below this region next supportive region at 46,000pts-45,960pts would try to push index in bullish direction for an intraday spike but breakout below 45,960pts would push index further downward till 45,500pts. While on flip side index would face initial resistance at 46,350pts which would be followed by 46,550pts and 46,650pts. It's recommended to start profit taking from existing long positions and start selling on strength with strict stop loss of 46,650pts for day trading while for short term trading post stop loss at 47,000pts.

Asian stock markets recovered on Friday but are headed for their steepest weekly loss in months, as a liquidity squeeze in China and a Wall Street retail-trading frenzy has unnerved investors. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9, but is headed for a weekly loss of more than 3%, the sharpest such fall since September. Japan’s Nikkei was steady but tracking toward its first weekly loss of 2021, having fallen 1.5% since last Friday. Safe-haven U.S. Treasuries sold off overnight and the U.S. dollar softened a fraction with a broader improvement in risk appetite, however S&P 500 futures fell 0.4% in Asia trading. Meanwhile, in China, the central bank injected 100 billion yuan into the financial system on Friday after a week of sucking liquidity which had put investors on edge as to whether the supportive policy environment could be shifting. The Hang Seng Index in Hong Kong opened 1% higher and the Shanghai Composite rose 0.6%, however both are on course for weekly losses of more than 2%.Read More...

Foreign Minister Shah Mehmood Qureshi on Thursday expressed the hope that the Financial Action Task Force (FATF), the global illicit financing watchdog, would delist Pakistan from its grey list at its next plenary meeting. The meeting is scheduled to take place virtually from Feb 22 to 25. Briefing the Senate Foreign Affairs Committee, the foreign minister said he was optimistic that no politically motivated decision would be taken by the FATF. The meeting was chaired by Chairman of Senate Foreign Affairs Committee Senator Mushahid Hussain Sayed.Read More...

The Economic Coordination Committee (ECC) of the Cabinet on Thursday deferred the approval of Textiles and Apparel Policy 2020-25 and revising the oil marketing companies (OMCs) and dealers’ margins on petroleum products. Federal Minister for Finance and Revenue, Dr Abdul Hafeez Shaikh chaired the meeting of ECC. On Textiles and Apparel Policy 2020-25, the ECC decided to include Special Assistant to Prime Minister on Power Tabish Gauhar in the sub-committee for detailed consultation on proposals related to the power sector which fall under the ambit of the Textile Policy. The Textiles and Apparel Policy 2020-25 would be presented before ECC in a couple of weeks. Petroleum Division presented a summary before ECC to review the oil marketing companies (OMCs) and dealers’ margins on petroleum products.Read More...

The Asian Development Bank (ADB) will provide about $5.4 billion assistance to Pakistan over the next three years. This is part of the ADB’s five-year Country Partnership Strategy (CPS). “The indicative resources available for commitment during the first three years of the CPS period (2021-2023) total $5.4bn,” said the ADB on Thursday. This include $3.6bn for regular OCR (ordinary capital resource) lending and $1.8bn for concessional OCR lending. Pakistan is classified as a group B category developing member country with access to OCR lending and concessional OCR lending. The bank said additional grant resources had been allocated for a project in 2021 from the Asian Development Fund thematic pool worth $5 million to increase gender equity.Read More...

The Oil & Gas Regulatory Authority (Ogra) on Thursday allowed Rs44 per unit (5.4 per cent) increase in the prescribed price for Karachi-based Sui Southern Gas Company (SSGC). The increase was determined on the request of the utility on the basis of its estimated revenue requirement (ERR) for financial year 2020-21. The regulator said the company will be able to meet Rs14.3 billion shortfall in its ERR, including prior year shortfall of Rs51bn. The new prescribed price has been worked out at Rs779 per Million British Thermal Unit (MMBTU) from the existing rate of Rs636 per MMBTU. Ogra has also allowed the utility to double its gas meter rent from Rs20 per month to Rs40 per month for domestic consumers. In its determination, Ogra recommended to the government to fix Rs779 per unit rate for all consumer categories so that all consumers pay at least the cost of gas supply.Read More...