PSX Daily Market Review - 10th July 2017

Foreign Investors remained in a net selling of 4.04 million shares and the net value of Foreign inflow dropped by 0.91 million shares during the last trading session. Categorically, Foreign Individuals, Corporate and Overseas Pakistani investors remained in a net selling position of 0.39, 3.04 and 0.62 million shares, respectively. While on the other side Local individuals, Mutual Funds and Brokers remained in net buying positions of 4.11, 4.61 and 4.67 million shares, respectively. However, local companies, banks and NBFCs remained in net selling positions of 6.26, 4.18 and 1.05 million shares, respectively.

Asian stocks rallied on Monday, lifted by strong performanceof Wall Street on Friday, while the U.S. dollar extended gains made after much stronger than expected June employment data. MSCI broadest index of Asia-Pacific shares outside Japan advanced 0.55 percent while Japanese Nikkei rose 0.7 percent. Australian stocks were up 0.6 percent and South Korean KOSPI added 0.4 percent. Hang Seng gained 1 percent, though Chinees bluechip shares were flat. On Friday, Wall Street closed higher after U.S. jobs growth beat forecasts. However, a lag in wage increases led investors to bet wage data would limit the extent of the Federal Reserve hawkishness.
The government on Sunday formally ordered investigations into last week’s sharp devaluation of the rupee and sought a report within 10 days. The ministry of finance announced that it had “officially asked the Governor State Bank of Pakistan (SBP) to initiate an inquiry” into the depreciation of the rupee against the US dollar exchange rate in the interbank market on July 5, 2017. Tariq Bajwa, a former civil servant from the district administration group, who was suddenly posted as governor of the central bank after the sharp fall in the rupee value, was also directed to “send a report in this regard within a period of ten days”, the announcement said.
Concentration of earnings in the banking sector grew in 2016 as the share of large banks in overall profitability increased to 77 per cent against 72pc a year ago. The development comes in a year when pre-tax profitability of the banking sector declined 4.5pc against 33pc growth in the preceding year. Meanwhile, the share of earnings by medium-size banks in the sector’s total profits decreased to 16pc from 19pc over the same period. According to the financial stability report issued recently by the State Bank of Pakistan (SBP), the share of small banks in overall profitability reduced to 5pc in 2016 from 8pc in the preceding year.
Finance Minister Ishaq Dar on Saturday reviewed the implementation status of budget for 2017-18. The finance minister said the measures announced in the budget are aimed at improving the welfare of the masses, and enabling higher, sustainable and inclusive economic growth. He also urged the finance division officials to ensure continued pursuance of austerity measures in order to maintain financial discipline. Finance Secretary Shahid Mahmood briefed the finance minister on the status of implementation of relief measures announced in budget 2017-18.
The industrial output of Dhabeji Special Economic Zone (DSZE) is expected to exceed $2 billion along with the creation of 100,000 direct and indirect jobs, Sindh Board of Investment (SBI) Chairperson Naheed Memon said on Friday. Addressing a press conference after a meeting with Chinese investors, Ms Memon said a consortium of consultants has been engaged by the SBI to conduct a detailed feasibility study in this regard. The zone is one of the three projects of the Sindh government approved by the last joint coordination committee (JCC) under the China-Pakistan Economic Corridor (CPEC), she said.

The Market is expected to remain volatile today. We advise Traders to exercise caution. Buying on dips and booking gains on strength is recommended.

Daily Stochastic and MAORSI are attempting to generate a bullish crossover on daily chart and the Benchmark KSE100 index is finding support at a rising trend line along with a horizontal supportive region at 44500 and 44300 which may try to push the index back in bullish zone. During the last trading session a piercing line pattern was created on daily chart, which indicates a start of a bullish trend only If the index closes above 45600. For the current trading session, key supportive level is 43700 and breakout of this level could push the index into a new bearish zone therefore trading with strict stop loss is recommended.