PSX Daily Market Review - 11th June 2019

Trading volume at PSX floor dropped by 32.9 million shares or 26.4% on DoD basis, whereas the benchmark KSE100 index opened at 35,505.29, posted a day high of 35,505.29 and a day low of 34,468.16 points during last trading session while session suspended at 34,567.55 with net change of -937.74 points and net trading volume of 74.89 million shares. Daily trading volume of KSE100 listed companies dropped by 17.73 million shares or 19.15% on DoD basis.
Foreign Investors remained in net buying positions of 4.82 million shares and net value of Foreign Inflow increased by 4.42 million US Dollars. Categorically Foreign Individuals remained in net selling positions of 0.15 million shares but Foreign Corporate and Overseas Pakistani investors remained in net buying positions of 4.78 and 0.19 million shares. While on the other side Local Individuals, Mutual Funds, Brokers and Insurances Companies remained in net selling positions of 1.36, 1.51, 24.7 and 1.8 million shares respectively but Local Companies and Banks remained in net buying positions of 24.26 and 0.82 million shares.

Asia stocks edge up on Mexico reprieve but Sino-U.S. rift caps gains
Asian stocks made modest gains on Tuesday after the Trump administration shelved plans for tariffs against Mexico, lifting Wall Street, however, fresh U.S. trade threats against China are expected to limit any major investor sentiment boost. U.S. President Donald Trump said on Monday he was ready to impose another round of punitive tariffs on Chinese imports if he cannot make progress in trade talks with Chinese President Xi Jinping at the G20 summit. The U.S. president has repeatedly said he expected to meet Xi at the June 28-29 summit in Osaka, Japan although China is yet to confirm any such meeting. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2%. Australian stocks rose 0.9%, South Korea’s KOSPI added 0.15% and Japan’s Nikkei edged up 0.05%. U.S. stocks extended their recent climb on Monday, with the Dow rising for the sixth trading day following a decision by the United States to forego imposing tariffs on Mexican goods.
GDP growth rate falls to 3.29pc in FY19; agricultural, industrial growth registers sharp slowdown
The economy grew at an average rate of 3.29 per cent (provisional) in fiscal year 2018-19 against an ambitious target of 6.2pc set in last year's budget, the Pakistan Economic Survey revealed on Monday.
Sector-wise growth rates:
Agriculture: 0.85 per cent (against target of 3.8pc)
Industry: 1.4pc (against target of 7.6pc)
Services 4.7pc (against target of 6.5pc)
Revenue collection
Total revenue at Rs3,583.7bn (9.3pc of GDP) showed almost 0pc growth from July-March 2019, while growth in total expenditures was 8.7pc. The fiscal deficit was recorded at 5pc of the GDP compared to 4.3pc in the corresponding period last fiscal. "Decelerated performance of total revenues primarily was due to marginal growth of 1.8pc in tax revenues and negative growth of 16.7pc in non-tax revenues," the PES explained. The Federal Board of Revenue's tax receipts from July-April 2019 remained at Rs2,976bn against Rs2,922.5bn in the corresponding period last year, registered growth of 1.8pc. "Actual tax collection during [the] first 10 months of the CFY remained at 67.7pc of revised target of Rs 4,398bn," the document said. Provincial revenue collection rose by 1.5pc from July-March 2019.
Budget to lay down parameters for austerity: PM’s aide
The government plans to present an austerity-oriented budget providing a ‘slight’ relief to middle and low grade government employees, including military personnel, with no increase in the salaries of army officials of higher ranks. This was said by Special Assistant to the Prime Minister (SAPM) on Information Dr Firdous Ashiq Awan at a joint news conference with SAPM on Accountability Shahzad Akbar here on Sunday. In an apparent reference to the opposition’s plan to launch anti-government protests and disrupt the budget proceedings in parliament, Dr Awan warned that “the agitators will be dealt with an iron hand if they violate the law”. She claimed that the opposition would not get any support from the masses and their proposed agitation campaign would turn out to be a mere “tall claim”.
Punjab okays two uplift schemes
United Group of ICCI Chairman Habibullah Zahid has said that the business community had rejected the proposed hike of trillion of rupees in the taxes, terming it extortion which will hurt the masses. “We reject the move as it will make life difficult for the masses and the business community reeling under inflation and uncertainty.” Habibullah Zahid said that the government has failed to achieve anything and it has targeted masses to cover its inefficiencies. He said, “Army has voluntarily reduced its budget which has gone down very well with the masses and the businessmen and now we demand that politicians and bureaucracy should also sacrifice some of the luxuries in the national interest.” He noted that Islamabad Chamber has been hijacked by a ‘qabza group’ since long which continues to bargain on the interests of the business community. This group always ensures the election of incompetent to the top slots so that they remain dominant and their activities remain unchecked, he added. Habibullah Zahid said that one of the former presidents of ICCI has made shops worth million in the Super Market while other has doubled the size of his hotel in Blue Area by grabbing the state’s land.
IFRS 9 accounting software launched in Pakistan
Abacus Consulting, a leading firm in transformation services, has entered into a strategic alliance with Aestimatio Analytics Inc. on an exclusive basis in Pakistan to provide end-to-end automated solution for estimating provisions under IFRS 9 for corporations, especially listed companies and financial institutions. SECP has made IFRS 9 accounting standard mandatory for all listed companies for reporting periods ending on or after June 30, 2019. “IFRS 9 is a paradigm shift from conventional provisioning methods of IAS 39, and Aestimatio-9 is the answer”, said Mr. Asad Ali Khan, President of Abacus. “Instead of the previous Incurred Loss method that resulted in delayed recognition of credit losses, IFRS 9 takes a completely forward-looking approach with Expected Credit Losses. This is a radical change that has posed challenges for auditors and corporations in countries all over the world who have adopted the standard. Aestimatio-9 will help Pakistani corporations in meeting this complex but mandatory requirement.”

The Benchmark KSE100 Index have continued its bearish momentum during last trading session and an evening shooting star on daily chart have been confirmed while completing correction of its last bullish rally. As of now index have found support at its 50% correction and a previous gap also have been filled during last trading session and it's expected that index would try to recover after posting a double bottom on daily chart during current trading session because sliding below 34,500 will call for 33,900 points where index would complete its 61.8% correction. It's recommended to stay cautious because daily momentum have turned to serious bearish trend and if a pullback could not succeed before 33,900 points then index would try to amend previous low of 32,352 points therefore it's recommended to start buying in chunks on dips with strict stop loss of 33,900 points. While on flipside index would face resistances at 35,023 and 35,400 points initially and breakout above 35,500 points would call for 36,300 points.