Previous Session Recap
Trading volume at PSX floor dropped by 39.38 million shares or 23.47% on DoD basis during last trading session, whereas the benchmark KSE100 Index opened at 39,467.64, posted a day high of 40,051.56 and a day low of 39,219.69 during last trading session. The session suspended at 39,586.76 with net change of 133.95 and net trading volume of 72.46 million shares. Daily trading volume of KSE100 listed companies dropped by 44.16 million shares or 37.86% on DoD basis.
Foreign Investors remained in net selling position of 6.56 million shares and net value of Foreign Inflow dropped by 6.50 million US Dollars. Categorically, Foreign Individual and Overseas Pakistani remained in net buying positions of 0.03 and 0.20 million shares but Foreign Corporate investors remained in net selling positions of 6.79 million shares. While on the other side Local Individuals, Companies, Brokers and Insurance Companies remained in net buying positions of 0.13, 3.12, 0.80 and 3.24 million shares but Banks, NBFCs and Mutual Funds remained in net selling positions of 1.17, 0.58 and 0.09 million shares respectively.
Analytical Review
Stocks, commodities consolidate after latest trade war jolt
Stocks and commodities recovered slightly on Thursday as markets tried to consolidate from the previous session’s steep losses when fears of an escalation in the U.S.-China trade war jolted investor sentiment. MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.05 percent. The index slumped 1 percent on Wednesday along with a slide in global equities after U.S. President Donald Trump’s threat to imposing tariffs on another $200 billion of Chinese goods deepened the trade row between the world’s two largest economies. Hong Kong’s Hang Seng rose 0.2 percent and the Shanghai Composite Index bounced 1.1 percent. Australian stocks rose 0.7 percent, South Korea’s KOSPI added 0.35 percent and Japan’s Nikkei gained 1.1 percent.
Amnesty scheme generated Rs97b so far
The current tax amnesty scheme has generated Rs97 billion revenue for the government as 55,225 declarations have been filed so far. “So far, 55,225 declarations have been filed in which declared value of foreign assets is around Rs 577 billion and that of domestic assets is around Rs1,192 billion,” the ministry of finance said on Wednesday. It further said that declarants have paid around Rs 97 billion out of which around Rs 36 billion have been collected on foreign assets and Rs 61 billion on domestic assets. In addition, $40 million have been repatriated. This response to the amnesty scheme has been unprecedented. Sources informed The Nation that government is expecting to generate additional Rs60 to Rs80 billion in remaining twenty days of the scheme, as people are taking interest to declare their hidden assets by paying nominal tax. The scheme would expire by end of July.
China believes Pakistan can overcome temporary financial difficulties
A Chinese spokesperson said Wednesday that China believes Pakistan can overcome temporary difficulties in foreign exchange reserves and maintain stable economic development. Foreign Ministry spokesperson Hua Chunying made the remarks at a press briefing in response to some Western media reports, which said Pakistan, facing a surging debt risk and a shortage of foreign exchange reserves, hoped China could continue to provide loans, otherwise a number of infrastructure projects of the China-Pakistan Economic Corridor could be affected. Hua refuted the reports as being "seriously inaccurate."
TDAP invites applications for int'l exhibition
The Trade Development Authority of Pakistan (TDAP) has invited applications from the manufacturing and trade bodies to attend International Trade Exhibition being held at Chicago (USA) from November 11, 2018. The TDAP sources told APP on Wednesday that applications would be received till July 22. They said that in a three-day show, various trade items, including surgery equipments, cosmetics, food products, home textiles and variety of rice and many other items, would be displayed.
High coal prices increase industry’s cost of production
High import duty and around 15 percent rupee depreciation against dollar have increased the rates of imported coal to 11-month high of $108 per ton from $92 per ton, leading to increase in cost of production for the local industry. Industry experts are of the view that because of the rupee depreciation and rising coal prices in the international market, the industry has no choice except to again shift on the national grid which would cause additional burden on the power distribution companies, besides increasing cost for the industry. According to analysts, rates of coal in the global market have surged by 35 percent, which has jacked up production cost of the cement industry and if the manufacturers continue the previous profit margin when the rupee was stable, they would have to increase prices by Rs100 per cement bag of 50kg.
Stocks and commodities recovered slightly on Thursday as markets tried to consolidate from the previous session’s steep losses when fears of an escalation in the U.S.-China trade war jolted investor sentiment. MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.05 percent. The index slumped 1 percent on Wednesday along with a slide in global equities after U.S. President Donald Trump’s threat to imposing tariffs on another $200 billion of Chinese goods deepened the trade row between the world’s two largest economies. Hong Kong’s Hang Seng rose 0.2 percent and the Shanghai Composite Index bounced 1.1 percent. Australian stocks rose 0.7 percent, South Korea’s KOSPI added 0.35 percent and Japan’s Nikkei gained 1.1 percent.
The current tax amnesty scheme has generated Rs97 billion revenue for the government as 55,225 declarations have been filed so far. “So far, 55,225 declarations have been filed in which declared value of foreign assets is around Rs 577 billion and that of domestic assets is around Rs1,192 billion,” the ministry of finance said on Wednesday. It further said that declarants have paid around Rs 97 billion out of which around Rs 36 billion have been collected on foreign assets and Rs 61 billion on domestic assets. In addition, $40 million have been repatriated. This response to the amnesty scheme has been unprecedented. Sources informed The Nation that government is expecting to generate additional Rs60 to Rs80 billion in remaining twenty days of the scheme, as people are taking interest to declare their hidden assets by paying nominal tax. The scheme would expire by end of July.
A Chinese spokesperson said Wednesday that China believes Pakistan can overcome temporary difficulties in foreign exchange reserves and maintain stable economic development. Foreign Ministry spokesperson Hua Chunying made the remarks at a press briefing in response to some Western media reports, which said Pakistan, facing a surging debt risk and a shortage of foreign exchange reserves, hoped China could continue to provide loans, otherwise a number of infrastructure projects of the China-Pakistan Economic Corridor could be affected. Hua refuted the reports as being "seriously inaccurate."
The Trade Development Authority of Pakistan (TDAP) has invited applications from the manufacturing and trade bodies to attend International Trade Exhibition being held at Chicago (USA) from November 11, 2018. The TDAP sources told APP on Wednesday that applications would be received till July 22. They said that in a three-day show, various trade items, including surgery equipments, cosmetics, food products, home textiles and variety of rice and many other items, would be displayed.
High import duty and around 15 percent rupee depreciation against dollar have increased the rates of imported coal to 11-month high of $108 per ton from $92 per ton, leading to increase in cost of production for the local industry. Industry experts are of the view that because of the rupee depreciation and rising coal prices in the international market, the industry has no choice except to again shift on the national grid which would cause additional burden on the power distribution companies, besides increasing cost for the industry. According to analysts, rates of coal in the global market have surged by 35 percent, which has jacked up production cost of the cement industry and if the manufacturers continue the previous profit margin when the rupee was stable, they would have to increase prices by Rs100 per cement bag of 50kg.
PPL, POL, DGKC and MLCF may lead the index in negative zone.
Technical Analysis
The Benchmark KSE100 Index have tried to format a morning star on daily chart during last trading session but could not succeed at day end and index slide back before closing, daily momentum indicators have created bullish indication but it seems that index may face a dip during current trading session before trying once more for a spike because hourly Stochastic and MAORSI have generated bearish crossovers which would lead index towards 39,100 and 38,900 points during current trading session. Its recommended to initiate selling on strength in first half while swing positions before day end during current trading session.
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