PSX Daily Market Review - 16th Aug 2019

Trading volume at PSX floor dropped by 32.69 million shares or 29.96% on DoD basis, whereas the benchmark KSE100 index opened at 29,732.34, posted a day high of 30,034.68 and a day low of 29,332.80 points during last trading session while session suspended at 29,429.07 points with net change of -308.91 points and net trading volume of 58.41 million shares. Daily trading volume of KSE100 listed companies dropped by 32.11 million shares or 35.47% on DoD basis.
Foreign Investors remained in net selling positions of 3.59 million shares and net value of Foreign Inflow dropped by 0.79 million US Dollars. Categorically, Foreign Individuals and Overseas Pakistan remained in net buying long positions of 0.01 and 1.16 million shares but Foreign Corporate investors remained in net selling positions of 4.77 million shares. While on the other side Local Individuals, Banks, NBFCs, Brokers and Insurance Companies remained in net long positions of 10.86, 0.17, 0.015, 2.10 and 0.24 million shares but Mutual Funds remained in net selling positions of 9.66 million shares respectively.

Asia stocks take heart in stimulus speculation
Asian shares found some footing on Friday after a turbulent week as China hinted at more support for its economy, amid growing expectations of aggressive stimulus from all the major central banks. Sentiment got a lift when China’s state planner said Beijing would roll out a plan to boost disposable income, though details were lacking. A bounce in U.S. and European stock futures also helped, with E-Minis for the S&P 500 up 0.55% and the EUROSTOXX 50 rising 0.5%. MSCI’s broadest index of Asia-Pacific shares outside Japan responded by edging up 0.2%, though it was still down 1% for the week. Japan’s Nikkei recouped early losses to be 0.09% firmer, while Shanghai blue chips rose 0.7%.
Pakistan’s trade deficit with China shrinks by $3.2 billion
ISLAMABAD-Pakistan’s trade deficit with China had shrunk by $3.2 billion during previous fiscal year mainly due to completion of China-Pakistan Economic Corridor (CPEC) projects. The trade balance between Pakistan and China had shrunk to $10.8 billion during the Fiscal, year (2018-19) as compared to the previous year (2017-18) i.e. $14 billion. According to the data of Ministry of Commerce, the trade deficit between Pakistan and China was continuously increasing till the fiscal year 2017-18 when it has reached to $14 billion. However, in last fiscal year, the trade imbalance between two countries had come down by $3.2 billion. Overall trade between Pakistan and China was $14.6 billion.
Govt lifts all bank liquidity as private credit offtake goes negative
With banks parking their money in risk-free government securities in huge sums, private sector has found no space to borrow from financial institutions since the beginning of FY20. The State Bank of Pakistan’s latest data shows the government borrowed Rs1.367 trillion from July 1 to Aug 2 (33 days) as against net debt retirement of Rs20.2bn during the same period last fiscal year. This shift in government’s borrowing to the private banks came as a result of SBP’s decision to stop lending to the centre and finance its cash shortages. Banking money’s flow now directed towards the government papers is likely to hit economic growth by adversely affecting the investment landscape of the country.
Strategy in the works for boosting horticulture exports to $1bn
The Pakistan Horticulture Development and Export Company (PHDEC) is working on a comprehensive plan to enhance exports of fruits and vegetables to $1 billion mark within the next three years. The five products identified by PHDEC include kinno, mangoes, dates, onion and potatoes. “We have almost finalised the marketing strategy for promoting exports of these products until 2021-22,” a senior officer of the Ministry of Commerce told Dawn. In the year 2019-20, horticulture exports will be increased to $800 million from the current $700m, reflecting an increase of 14.28 per cent. PHDEC is a public sector organisation established by the Ministry of Commerce as Pakistan Horticulture Development Board in 2002, later converted into a Section-42 company in 2009. Due to several administrative and financial constraints, the company’s performance gradually deteriorated and there was serious consideration of its closure in 2015.
China to counter latest tariffs as Trump vows deal on US terms
China on Thursday vowed to counter the latest US tariffs on $300 billion of Chinese goods but called on the United States to meet it halfway on a potential trade deal, as US President Donald Trump said any pact would have to be on America’s terms. The Chinese finance ministry said in a statement that Washington’s tariffs, set to start next month, violated a consensus reached between Trump and Chinese President Xi Jinping at a June summit in Japan to resolve their disputes via negotiation. In a separate statement, China’s foreign ministry spokeswoman, Hua Chunying, said, “We hope the US will meet China halfway, and implement the consensus of the two heads of the two countries in Osaka.” China hopes to find mutually acceptable solutions through dialogue and consultation on the basis of equality and mutual respect, she added.

The Benchmark KSE100 index is trying to find support at a descending trend line since last two trading sessions but it's expected that it would not succeed until it would reach 29,000 points therefore it's recommended to stay cautious because penetration below 29,000 points would call for 27,600 points in coming days. As of now if index would succeed in maintaining above 29,000 points then a sharp pull back could be witnessed towards 31,200 points and then 31,700 points, for long positions its recommended to post stop loss at 29,000 points and start adding further positions in chunks if index would succeed in closing above 30,200 points on daily chart.