PSX Daily Market Review - 12th Feb 2019

Trading volume at PSX floor dropped by 34.69 million shares or 20.51% on DoD basis, whereas the benchmark KSE100 index opened at 41,038.02, posted a day high of 41,076.26 and a day low of 40,218.37 points during last trading session while session suspended at 40,326.53 with net change of -560.53 points and net trading volume of 87.57 million shares. Daily trading volume of KSE100 listed companies dropped by 37.07 million shares or 29.74% on DoD basis.
Foreign Investors remained in net buying positions of 4.88 million shares and net value of Foreign Inflow increased by 1.68 million US Dollars. Categorically, Foreign Individuals, Foreign Corporate and Overseas Pakistani investors remained in net buying positions of 0.30, 1.19 and 3.39 million shares. While on the other side Local Individuals, Banks, NBFCs and Insurance Companies remained in net buying positions of 10.51, 2.90, 0.40 and 2.03 million shares respectively but Local Companies, Mutual Fund and Brokers remained in net selling positions of 1.38, 16.54 and 2.18 million shares.

Asian stocks edge up, U.S. futures rise on hope for no U.S. government shutdown
Asian shares edged up on Tuesday as investors hoped a new round of U.S.-China trade talks would help to resolve a dispute that’s dented global growth and some corporate earnings. Improving market sentiment was news that U.S. lawmakers reached a tentative deal on border security funding that would avert another partial government shutdown due to start on Saturday. The S&P 500 e-mini futures were up more than 0.5 percent.. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3 percent. The Shanghai Composite Index rose 0.6 percent, South Korea’s KOSPI climbed 0.4 percent and Australian shares were up 0.4 percent.
ADB for improving country's power system
The Asian Development Bank of Pakistan (ADB) has noted that power generation in Pakistan may overload the transmission and distribution systems that would threaten the financial sustainability of the energy sector. “Power sector state-owned companies do not have sufficient incentives to improve their financial and operating performance, while IPP operations have been adversely affected by delayed payments from the off-taker,” the ADB noted in its report ‘ADB’s Support to Pakistan Energy Sector (2005–2017)’. It further said that inter-and intra-agency coordination is poor, while political economy factors that support the status quo and resist reforms and transparency have slowed down improvements in the power sector.
Gas crisis deepens as govt investigates price hike issue
As the government investigates gas price hike controversy, a serious shortage has hit the country with delay in the berthing of Q-flex cargo of Pakistan State Oil (PSO), affecting almost all sectors of economy. “The situation is very serious. Gas supply to power plants, fertiliser plants, general industry and CNG sectors has already been curtailed and SNGPL is struggling to meet demand of residential and commercial consumers,” said a senior government official. He explained that the SNGPL had reported about 400 million cubic feet per day of reduction in LNG supplies and the supply could go further down by Tuesday depending on weather conditions.
Trade deficit shrinks by 9.6pc in 7 months
Pakistan’s trade deficit narrowed by 9.66 percent in first seven months of the current fiscal year due to decline in imports and marginal growth in exports. The country’s trade deficit was recorded at $19.3 billion during July to January period of the 2018-19 as against $21.3 billion of the corresponding period of the previous year, according to the latest data released by Pakistan Bureau of Statistics (PBS) on Monday. The deficit has narrowed due to decline in imports as against the growth in exports of the country.
Remittances up by 12.2pc
Overseas Pakistani workers' remittances increased by 12.22 percent during first seven months of fiscal year 2018-19 as compared to same period of last year. The remittances during the period under review stood at $12,774.02 million against the average inflow of $11,383.47 million during July-January (2017-18), according to a report issued by State Bank of Pakistan (SBP) on Monday. During January 2019, the inflow of workers’ remittances amounted to $1743.25 million against $1,638.72 million during same month of previous year showing an increase of 6.4 percent while on month-on-month basis the remittances witnessed a slight decline of 0.3 percent compared to remittances recorded during December 2018.

The Benchmark KSE100 Index have slide below its major supportive region of 40,500 points during last trading session in response to an evening shooting star on daily chart which occurred during last week and it’s expected that if index would not succeed in recovering above 40,500 points during current trading session then an evening shooting star could be formatted on weekly chart as well. Current weekly closing below 40,000 would create an evening shooting star which would push index again in bearish trend which may lead index towards 39,500 and 38,800 points in coming days. It’s recommended to stay cautious while trading until index close below 40,000 points or above 40,700 points on daily basis because these both levels have become crucial as daily momentum have changed to bearish side and weekly momentum would confirm bearish trend once index would succeed in closing below 40,000 points this week.
Categorically, PSO have strong supportive region ahead between 230-227 Rs and it can start a bounce back from this region therefore buying PSO with strict stop loss of 224 Rs and profit target at 238 and 242 Rs respectively. TRG have a strong supportive region ahead between 25.00-24.80 and it can be bought with strict stop loss of 24.60 on daily closing basis. ATRL is going to complete its 61.8% correction on daily basis and it would face strong supports at 130 and 127 Rs and it can be bought with strict stop loss of 125 and profit targets at 138 and 144 Rs. While SNGP have a strong supportive region ahead at 80.80 Rs and buying in SNGP could be beneficial if it would be bought with strict stop loss at 78 Rs.