PSX Daily Market Review - 10th July 2019

Trading volume at PSX floor increased by 0.6 million shares or 1.01% on DoD basis, whereas the benchmark KSE100 index opened at 33,750.85, posted a day high of 34,051.01 and a day low of 33,656.21 points during last trading session while session suspended at 33,855.58 points with net change of 112.9 points and net trading volume of 48.35 million shares. Daily trading volume of KSE100 listed companies increased by 1.56 million shares or 3.34% on DoD basis.
Foreign Investors remained in net buying positions of 2.5 million shares and net value of Foreign Inflow increased by 1.67 million US Dollars. Categorically, Foreign Corporate and Overseas Pakistani Investors remained in net buying positions of 1.68 and 0.91 million shares. While on the other side Local Individuals, Banks, Mutual Funds and Insurance Companies remained in net selling positions of 2.6, 0.96, 2.62 ad 0.14 million shares respectively but Local Companies and Brokers remained in net buying positions of 0.21 and 3.8 million shares.

Asia shares cautious in case Powell closes rate door
Asian shares turned mixed on Wednesday while rising Treasury yields lifted the dollar as markets wondered if the world’s most powerful central banker would confirm or confound expectations for U.S. policy easing this month. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.4%, after three sessions of losses. South Korea .KS11 edged up 0.4%, but Japan's Nikkei .N225 lagged with a loss of 0.2%. E-Mini futures for the S&P 500 ESc1 dithered either side of flat in very slow trade. Chinese blue chips .CSI300 barely budged as data showed inflation remained stubbornly subdued despite a spike in pork prices.
Pakistan to repay $14.9b under public external liabilities, repayment schedule
Pakistan has to repay $14.9 billion under public external liabilities and repayment schedule during current fiscal year (FY2019/20), which would keep the country’s foreign exchange reserves under pressure. According to a staff report released by the International Monetary Fund (IMF), Pakistan would have to repay $721 million to Paris club and $7.44 billion to non-Paris club during this fiscal year. Similarly, the government would repay $2.2 billion multilateral, $2.8 billion as commercial loan, one billion dollars as bond and $757 million to the IMF during FY2019/20. Overall, the country would have to repay $14.9 billion. The authorities have given an undertaking to the IMF that Pakistan had received firm commitments from China, Saudi Arabia and the UAE to keep rolling over their existing loans over the course of the programme. Among Paris club, Pakistan would repay $307 million to Japan, $131 million to France and $90 million to United States. The overall outstanding debt of Paris club has recorded at $11.26 billion. The IMF programme required Pakistan to bring down the volume of Paris club outstanding loans to $8.88 billion by fiscal year 2022/23. Meanwhile, the government would have to repay $7.44 billion to non-Paris club this year. In this club, Pakistan has to repay $3.4 billion to China, $3 billion to Saudi Arabia and one billion dollars to United Arab Emirates. The overall outstanding debt of non-Paris club is $23.8 billion, which would be brought down to $7.5 billion by the end of IMF programme. The bilateral debt from China will be reduced from $15.155 billion today to $7.946 billion by the programme end.
Overpayment of Rs 955b to IPPs increased circular debt
Sub-Committee of Senate Standing Committee on Power has observed that an overpayment of Rs 955 billion has been made to the IPPs during past six years which has increased the circular debt. About 75 percent of 187 Independent Power Producers are operational and if all of them are financially evaluated the assumption is that more than 2000 billion is recoverable from them, said Senator Nauman Wazir Khattak while chairing the meeting of the Sub-Committee of Senate Standing Committee on Power here. Nauman Wazir, who is also convener of the sub-committee, observed that for 40 Thermal Power Stations (average generation time till date of 10 years), the GoP has paid Rs 955.728 billion extra to the lPPs. Sub-Committee of Senate Standing Committee discussed the issues of high tariff, capacity charges, heat rates and calculation of pay back periods of IPPs and presented a detailed analysis of how the overpayments to Independent Power Plants have greatly contributed in the circular debt of the power sector and the private businesses have flourished while damaging the national exchequer owing mainly to the poorly and haphazardly designed agreements.

Speakers at a seminar have urged the government to form special policies and introduce soft taxation regime for the real estate sector of the country. Lahore Chamber of Commerce & Industry arranged the seminar on house & real estate on Tuesday. LCCI acting President Faheem-ur-Rehman Saigal, Chairman Al-Jalil Developers Nasrullah Waraich, Prof Jason Pomeroy, Yaqoob Tahir Izhar, Akber Sheikh, Mian Abuzar Shad, Chairman Federal Task Force Zaigham Rizvi and other experts addressed the seminar.
Country’s security situation improves further: OICCI survey
OICCI’s 2019 annual security survey showed that security situation of the country has further improved significantly compared to the already improved security situation recorded in the 2018 survey. The survey was conducted in June 2019. The annual security survey, conducted among OICCI members only, is one of the critical annual assessments of the operating conditions in Pakistan and is taken very seriously by the potential foreign investors, relevant diplomats and other stakeholders interested in doing business in Pakistan. Whilst overall responses clearly convey continued improvement in the general security environment, the increase in street crimes, an attack on Chinese Consulate in Karachi, sporadic religious/communal attacks in Baluchistan province and some consequences of the recent spat between India and Pakistan, are also reflected in this survey.

The Benchmark KSE100 Index still not have been succeeeded in penetration above its major resistant region of 34,000 points during last trading session and right now it's going to find a support at a rising trend line along with another horizontal support. It's recommended to stay cautious during current trading session because if index would succeed in penetration below 33,700 and 33,500 points then a new low would be witnessed in coming days. As of now its recommended to post strict stop loss on long positions and avoid initiating any short positions until index would close below 33,500 points on daily chart. In case of reversal index would face resistance at 34,000 and 34,260 points.