Morning Market Brief 4th May 2021

The Benchmark KSE100 index had continued its bearish journey initially after breakout of its triangle during last trading session but later on a sharp recovery was witnessed as index succeeded in establishing ground above a horizontal supportive region and it bounced back towards supportive trend line of its triangle to retest it on hourly chart. As of now index is being capped by two strong resistant objects initially at 44,230pts where supportive trend line of its previous triangle would try to cap bullish sentiment while its being followed by a strong horizontal resistant region at 44,360pts it's recommended to stay cautious because index seems to continue its pull back towards its resistant regions during current trading session while breakout above 44,360pts would call for 44,500pts and 44,760pts in coming days. While on flip side in case of rejection from its resistant regions index would start sliding again towards 43,730pts and 43,500pts. It's recommended to adopt swing trading until either index succeeds in closing above 45,200pts or below 43,900pts. Daily closing below 43,200pts would push index towards a sharp dip. Currently hourly momentum indicators are in mixed mode while daily indicators are in bearish mode therefore it's recommended to wait for breakout of either side to initiate positions for short term trading;

 

IMF being urged to relax harsh terms, says minister

Finance Minister Shaukat Tarin has said that stabilisation is no more affordable for Pakistan’s economy that should now shift gear towards higher growth and the International Monetary Fund (IMF) would be convinced to relax conditions particularly those related to power tariff hike. Testifying before the National Assembly’s Standing Committee on Finance, Mr Tarin said the higher power tariff was leading to corruption and affecting economic growth. The conditions agreed to under the IMF programme were very harsh, he said. He claimed that the government would take alternative measures to reduce circular debt instead of tariff increases. Similarly, he said, tax net would be expanded instead of increase in taxes to achieve revenue targets. However, he admitted that the state-owned entities that the government was unable to run in the public sector would be privatised. The finance minister said the IMF was being convinced to have a sympathetic view towards Pakistan after it had been hit by the third wave of coronavirus pandemic. Unless the country moved to higher economic growth, nothing would improve and if we continue with stabilisation that has been in place for over two years, neither revenue collection would go up, nor job opportunities would be available to people or productive capacity of the economy could improve, he explained.Read More...

Prime Minister Imran Khan setting aside the protocol on Sunday drove to G-11 Markaz and some other areas of the federal capital where he interacted with cart owners before presiding over a meeting on the next annual budget and national economy. The prime minister said the government should prepare a development-oriented budget for the year 2021-22 in which improving GDP growth and tackling inflation would be the main areas of focus.“Give special attention to development projects and measures to control the inflation while formulating the upcoming annual budget,” Mr Khan said at the meeting. Besides ensuring the completion of ongoing development projects, new projects should be designed in accordance with the public needs, he said.National Assembly Speaker Asad Qaiser, federal ministers Shah Mahmood Qureshi, Asad Umar, Pervaiz Khattak, Shafqat Mahmood, and Fawad Chaudhry, Khyber Pakhtunkhwa Governor Shah Farman, KP Chief Minister Mahmood Khan, provincial ministers Hashim Jawan Bakht, Taimur Saleem Jhagra, and relevant senior officers also attended the meeting.Read More...

Seed cotton (Phutti) equivalent to over 5.645 million or exactly 5,645,967 bales has reached ginning factories across the country till May 1, 2021. According to final fortnightly report of Pakistan Cotton Ginners Association (PCGA) for the cotton season 2020-21 released to media on Monday, Punjab arrival figures stood at 3.5 million or 3,509,798 bales while Sindh contributed over 2.1 million or 2,136,169 bales. PCGA could not release fortnightly reports during Apr 2021 due to the pandemic and the final report released yesterday does not carry last year’s statistics for the month of April. The PCGA report says, “Data was not collected last year on May 1, 2020 due to COVID-19”. Hence, final report does not show comparison of statistics with last year’s data. However, PCGA’s mid March 2021 report does indicate the shortfall then stood at 34.16 per cent compared to corresponding period i.e year 2020, when arrivals were recorded at 8.57 million bales. Cotton production plunged to new low this year prompting the federal and provincial governments to take initiatives to revive past production patterns and move forward to touch new highs. Vice President, Pakistan Central Cotton Committee (PCCC) Dr. Muhammad Ali Talpur had said a few days ago that a proposal was under consideration by the government to announce cotton support price to encourage farmers and revive their confidence in the silver fibre. The report says that all the cotton that had arrived at the ginneries has been pressed into bales.Read More...

The housing and construction finance portfolio of banking sector has recorded an unprecedented surge as it reached Rs.202 billion in March 2021 from Rs.148 billion by the end of June 2020. A growth of Rs.54 billion or 36% in three quarters of FY 20-21 compared to a stagnant position in earlier quarters is manifest that housing and construction finance by banking sector has been progressing significantly and a momentum in the sectors was building up as a result of the recent measures by the GoP and SBP under the “Mera Pakistan Mera Ghar Housing Finance Scheme”. A joint statement of SBP and Pakistan Banks Association (PBA) issued here the other day further informed that up to April 20, 2021 banks had received applications for financing of more than Rs.52 billion from the general public under the scheme.Read More...