PSX Daily Market Review - 10th May 2018

Trading volume at PSX floor increased by 38.34 million shares or 24.97% on DoD basis during last trading session, whereas the benchmark KSE100 Index opened at 44,163.86, posted a day high of 44,249.13 and a day low of 43,386.63 during last trading session. The session suspended at 43,796.00 with net change of –271.96 and net trading volume of 80.67 million shares. Daily trading volume of KSE100 listed companies increased by 0.6 million shares or 0.74% on DoD basis.
Foreign Investors remained in net selling position of 4.74 million shares and net value of Foreign Inflow dropped by 4.89 million US Dollars. Categorically, Foreign Corporate and Overseas Pakistanis Investors remained in net selling positions of 4.50, 3.08 and 0.23 million shares. While on the other side Local Individuals, Local Companies, Mutual Fund and Insurance Companies remained in net buying positions of 6.15, 1.46, 1.19 and 0.63 million shares but Banks, NBFCs and Brokers remained in net selling positions of 1.69, 2.2 and 3.28 million shares respectively.

Asia stocks rise as crude oil extends rally on Iran worries
Asian stocks rose on Thursday, with energy shares leading the way as crude oil prices bolted higher after U.S. President Donald Trump’s decision to pull out of a nuclear deal with Iran.MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.4 percent, while Japan’s Nikkei climbed 0.1 percent. South Korea’s KOSPI rose 0.4 percent and Shanghai edged up 0.3 percent. Brent crude futures rose 0.7 percent to $77.76 a barrel in early trade, the highest since November 2014 and building on gains of about 3 percent on Wednesday. U.S. light crude futures rose 0.8 percent.[O/R] But battered emerging market investors got another jolt after a stunning election upset in Malaysia.
Cement sector profits down by 24pc
The cement producers profitability declined by 24 percent in three quarters of ongoing financial year (3QFY18) versus marginal decline of 1 percent in 3QFY17. Decline in profits was mainly on the back of lower margins which fell to nearly 6-year low of 28pc. Margins have been on a declining trajectory since 3QFY17. Volumetric growth remained robust during the outgoing quarter, up 19pc YoY thanks to higher local dispatches, fueled by private sector construction activities and demand from CPEC related projects. Despite robust dispatches, sector revenues grew by mere 4% YoY in 3QFY18, primarily owing to decline in high margin local net retention prices. Experts estimate that the industry’s average net retention prices declined by around 12% YoY to Rs323/bag in 3QFY18. While on sequential basis, average net retention prices were down by Rs12/bag (4%).
Thorough audit of tobacco sector can boost revenue collection
In encouraging signs for Pakistan’s economy, the introduction of third tier tax slab on tobacco products and cigarettes has remarkably helped boosting revenue collection, which could improve further provided that a thorough audit of tobacco sector is carried out with its extension to retail sector for effective enforcement of minimum price law. In the financial year 2017-18 which started on July 1 last year and ends on June 30 this year, the federal government introduced third tier tax slab on cigarettes with an aim to stem the unabated decline in government revenues due to an alarming increase of up to 40 per cent in market share of illicit cigarette component.
PRGMEA wants PM package extension in budget
The Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) has asked the government to declare export emergency in the federal budget for 2018-19, which is presently under discussion in the national assembly, as there is no other shortcut to control the ballooning trade deficit of the country. Addressing a post-budget conference here, PRGMEA Senior Vice Chairman Sheikh Luqman Amin termed the federal budget very disappointing and political, aimed at attracting the voters, as no incentive was announced in the budget for export industry. He said that the budget has disappointed the value-added textile industry as the government has not announced implementation of the proposals given by the industry.
Value added textile exporters facing severe hardships
Huge amount of exporters’ liquidity of billions of rupees in shape of refunds of sales tax claims, customs rebate, withholding tax and payments of DDT and DLTL have been stuck up with the government causing great sufferings to the already harassed and burdened exporters who are now at a loss to understand how to make both ends meet and such an alarming situation will ruin the export business of the value-added textile exporters. The government has been making just announcements without any firm commitment to release the refund claims since last several years.

The Benchmark KSE100 Index have tried to bounce back yesterday after posting day low at a horizontal supportive region and an intraday pull back was witnessed at day end. As of now index have resistant regions ahead at 43,990 and 44,510 and these are the same regions which have supported index while it was sliding down and now these regions would try to add pressure on index in case of reversal. It’s expected that index may take a spike towards 43,990 points during current trading session and if it would not become able to penetrate that region then a new bearish rally would be witnessed today. It’s recommended to initiate selling on strength with strict stop loss of 43,990 on intraday basis. Index would remain bearish until it close above 44,530 points on daily chart.