PSX Daily Market Review - 13th Sep 2019

Trading volume at PSX floor increased by 86.18 million shares or 86.47% on DoD basis, whereas the benchmark KSE100 index opened at 30,950.85, posted a day high of 31,846.68 and a day low of 30,950.85 points during last trading session while session suspended at 31,546.61 points with net change of 591.78 points and net trading volume of 145.29 million shares. Daily trading volume of KSE100 listed companies increased by 66.49 million shares or 84.37% on DoD basis.
Foreign Investors remained in net selling positions of 12.80 million shares but net value of Foreign Increased by 1.39 million US Dollars. Categorically, Foreign Individuals, Corporate & Overseas Pakistanis remained in net selling positions of 0.05, 11.83 and 0.92 million shares. While on the other side Local Individuals, Banks, NBFCs, Brokers and Insurance Companies remained in net selling positions of 2.45, 5.16, 0.31, 0.46 and 4.60 million shares but Local Companies and Mutual Fund remained in net buying positions of 0.97 and 18.32 million shares respectively.

Asian shares advance on U.S.-China trade progress, ECB easing
Asian stocks advanced on Friday as hints of progress in U.S.-China trade talks and aggressive stimulus from the European Central Bank helped counter worries about a global economic slowdown. MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.3% though mainland China and South Korea were closed for public holidays. Japan’s Nikkei rose 1.0% to four-month highs. “Risk assets should find further support from accommodative policies, which are set to remain in vogue for some time, and not just in Europe as seen in the global easing trend,” said Esty Dwek, head of global market strategy at Natixis in Geneva, Switzerland. “Nonetheless, we believe that trade uncertainty and growth concerns will not vanish, so any reprieve on either subject will be welcome. We also believe that some earnings growth will be needed for equities to grind higher,” she said.
Investment Conference closes with resolution to enhance Pak-US ties
The 4th annual Pakistan Investment Conference wrapped up after wide-ranging discussions on enhancement of bilateral trade ties between Pakistan and the United States alongside exploration of foreign investment avenues. Hosted by JS Global- a subsidiary of JS Bank, the conference aimed to connect Pakistani corporates with their US counterparts and build communication channels for growth and technology transfers. During the visit, the delegation met with representatives of the US State Department, Chamber of Commerce, USAID, US-Pak Business Council and global fund managers. The delegation was led by Imran Ismail - Governor Sindh and included Ali Jehangir Siddiqui - Ambassador for Foreign Investment, Kamran Nasir - CEO JSGL, Basir Shamsie, President & CEO JS Bank, Khalid Mansoor- CEO HUBCO, Ehsan Malik – CEO Pakistan Business Council, alongside other CEO’s and CFO’s from leading Pakistani corporations.
ICCI for focusing on engineering sector to boost exports
The Islamabad Chamber of Commerce and Industry (ICCI) has called upon the government to focus on policy measures for better development of engineering sector. Ahmed Hassan Moughal, President Islamabad Chamber of Commerce and Industry, said that Pakistan has been depending on textiles products for exports while the share of textiles exports in the global market was reducing while that of engineering goods was rising. He said the engineering goods constituted around 50 percent of the world trade while, Pakistan’s share of engineering goods in global exports was just 0.015 percent which was very negligible. It showed that the country was losing huge export potential by ignoring engineering sector. He said that Pakistan could earn billions of dollars of exports by creating an enabling environment for engineering sector.
Trade deficit falls sharply by 38pc in July-August
The country’s trade deficit shrank by nearly 38 per cent in the first two months of current fiscal year, driven largely by a decline in imports of non-essential luxury items. The constant decline in trade deficit shows the government’s battle against bloated trade deficit is finally bearing fruit as imports have plummeted despite paltry growth in exports proceeds. Provisional trade figures available with Dawn showed the trade deficit dipped to $3.973 billion in July-August from $6.37bn over the corresponding months last year, reflecting a decline of 37.62pc. On a monthly basis, the trade deficit decelerated by a hefty margin of 42.25pc to $1.848bn in August as against $3.20bn over the corresponding month last year. The government has set a target to bring down annual trade gap to $27.476bn by June 2020.
Auto sales plunge in a slowing economy
Car sales during July and August nosedived by massive 41.3 per cent to 20,094 units compared to 34,264 during the corresponding months last year. In August, total car sales lowered to 9,126 units versus 15,389 in the same month last year. Major auto assemblers including Honda Atlas Cars Limited (HACL) scaled down production for ten days in July. Similarly, the Indus Motor Company (IMC), during the same month, also shut down its plants for eight days amid sluggish demand on account of rising prices, high interest rates, unsold inventory, slow down in fresh booking and imposition of federal excise duty in the range of 2.5 per cent to 7.5pc on various engine capacities.

The Benchmark KSE100 Index have penetrated above its initial resistant region of 31,200 points during last trading session but it's expected that index would not succeed in maintaining above that region till day end today and day would end with a negative note below 31,200 points, because a half moon formation is already completed on daily chart and index would try to entertain a daily triple top before 32,060 points. Today's closing below 31,200 will generate a strong bearish sentiment on daily and weekly chart as this formation would finalize a false breakout of a descending trend line but it's recommended to post a strict stop loss on short positions at 32,100 points to secure a continuity pattern risk. While it's also recommended to post trailing stop loss on long positions because if index would start sliding in downward direction which is highly expected then it would become a roller coaster and would gain strength on bearish momentum once closed below 30,700 points on daily chart.

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