PSX Daily Market Review - 15th April 2019

Trading volume at PSX floor increased by 45.56 million shares or 31.68% on DoD basis, whereas the benchmark KSE100 index opened at 36,788.89, posted a day high of 37,420.92 and a day low of 36,741.70 points during last trading session while session suspended at 36,737.87 with net change of 550.23 points and net trading volume of 125.96 million shares. Daily trading volume of KSE100 listed companies increased by 24.27 million shares or 23.86% on DoD basis.
Foreign Investors remained in net selling positions of 3.76 million shares and net value of foreign inflow dropped by 0.45 US Dollars. Categorically, Foreign Individuals and Foreign Corporate remained in net selling positions of 0.22 and 4.30 million shares but Overseas Pakistanis investors remained in net buying positions of 0.76 million shares. While on the other side Local Individuals, Mutual Fund and Brokers remained in net buying positions of 22.91, 2.37 and 5.47 million shares respectively but Local Companies, Banks, NBFCs and Insurance Companies remained in net selling positions of 14.11, 6.37, 2.48 and 3.38 million shares respectively.

Asian shares near nine-month highs, helped by U.S. optimism on China trade talks
Asian shares neared nine-month highs on Monday after U.S. Treasury Secretary Steven Mnuchin said he hoped U.S.-China trade talks were approaching a final lap, while strong Chinese export and bank loan data boosted confidence in the global economy. The consequent improvement in risk appetite resulted in the dollar easing against other major currencies. MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.6 percent to its highest since late July. Chinese shares led the growth with the blue-chip CSI300 index rising 2.2 percent. Hong Kong’s Hang Seng added 1.2 percent while South Korea’s KOSPI rose 0.7 percent. Japan’s Nikkei also joined the party, gaining 1.4 percent to the highest since early December. “Stocks bulls certainly have the wind at their backs with improving growth but steady inflation, reduced trade tensions and a solid/better-than-feared Q1 earnings season,” JPMorgan analysts said in a note.
PEW fears another gas bomb to fall on masses
The Pakistan Economy Watch (PEW) on Sunday said another gas bomb has been prepared which will hit masses shortly. The gas companies which are not satisfied by up to 143 percent hike in the gas tariff during last one year have initiated efforts for a 145 percent further increase in the price of gas, it said. If the government didn’t allow full revision in prices and decided to increase tariff by only 40 to 50 percent it would spell disaster for the masses reeling under inflation, said Dr Murtaza Mughal, the president of PEW. The move will increase the profit of gas utilities but result in increased cost of doing business, closure of many businesses and widespread unemployment in the country, he added.
SCCI irked by raids on factories
The Sarhad Chamber of Commerce and Industry (SCCI) expressed serious concern over sealing of chipboard factories, harassing owners and workers of these industrial units during a crackdown, carried out by Institute of Environmental Protection on the pretext of emitting environmental pollution. SCCI President Faiz Mohammad Faizi termed the move was an attempt to sabotage industrialisation process and cost the poor factory workers their jobs. He added that the closing down of already terrorism and extremism-hit industries could force to investors and factories owners to shift their industrial units to other parts of the country, consequently, he feared that it would further increase unemployment ratio in the province.
Will protracted reforms lead to an early recovery?
FINANCE Minster Asad Umar expects to reach an agreement with the International Monetary Fund (IMF) on a three-year economic stabilisation programme by the end of this month. However, he says that the ongoing painful phase of reforms will last for two years and recovery will begin in the third year. The latest edition of the South Asia Economic Focus report tends to support his view. Owing to tight monetary and fiscal policies, the report sees Pakistan’s economic growth at 3.4 per cent in FY19, slowing down to 2.7pc in FY20 and recovering at 4pc in FY21. Leading local economists differ. Dr Ashfaque Hasan Khan estimates that the gross GDP will shrink by 15pc from $330 billion to $280bn. An independent observer says the recovery may take three years.
IMF may delay visit as bailout talks still going on
The visit of an IMF mission to Islamabad for finalising a bailout package for Pakistan may be delayed as both sides are still engaged in an intense discussion on the proposed programme, official sources told Dawn. Finance Minister Asad Umar said earlier this month that the mission would visit Islamabad soon after the spring meetings of the World Bank Group, which includes the International Monetary Fund (IMF), and an agreement should be signed by the end of this month. The meetings, held in Washington this week, ended on Sunday. The finance minister, who led the Pakistani delegation at the meetings, went to New York on Friday but his team, which includes senior officials of his ministry and other government agencies, stayed in Washington for further talks.

DGKC, MLCF, ENGRO, SNGP and ISL would try to lead the negative momentum after a spike on intraday basis, while TRG, PAEL and DOL would try to support bullish sentiment.

The Benchmark KSE100 Index have formatted a morning star on daily chart while weekly have created a hammer, these both are reversal signs and have strong impact, but chances of creation of a cheat pattern are still intact unless index succeed in closing above 38,000 points. Index have resistant regions ahead at 37,700 and 38,000 points while on flip side 36,880 and 36,500 points regions would try to provide support to index against any pressure. Therefore it's recommended to stay cautious and start profit taking before both resistant regions or post trailing stop loss at long positions. Daily momentum indicators have changed their direction to bullish side but weekly momentum is still in bearish direction and it need to close above 38,000 points to start a positive momentum.