PSX Daily Market Review - 17th June 2019

Trading volume at PSX floor increased by 13.55 million shares or 8.78% on DoD basis, whereas the benchmark KSE100 index opened at 35,443.40, posted a day high of 35,659.35 and a day low of 35,295.64 points during last trading session while session suspended at 35,572.95 with net change of 169.88 points and net trading volume of 129.02 million shares. Daily trading volume of KSE100 listed companies increased by 10.49 million shares or 8.85% on DoD basis.
Foreign Investors remained in net selling positions of 7.89 million shares and net value of Foreign Inflow dropped by 6.53 million US Dollars. Categorically Foreign Individuals and Foreign Corporate remained in net selling positions of 0.04 and 9.86 million shares but Overseas Pakistani investors remained in net buying positions of 2.01 million shares. While on the other side Local Individuals, Banks and Insurance Companies remained in net selling positions of 9.12, 2.32 and 0.68 million shares respectively but Local Companies, NBFCs, Mutual Fund and Brokers remained in net selling positions of 1.17, 0.09, 11.43 and 6.91 million shares.

Asian shares wobble on trade, political tensions; focus turns to Fed meet
Asian shares got off to a shaky start on Monday as investors were cautious ahead of a closely-watched Federal Reserve meeting, while political tensions in the Middle East and Hong Kong kept risk-appetite in check. MSCI’s broadest index of Asia-Pacific shares outside Japan opened slightly lower and was last little changed, while Japan’s Nikkei average stood flat. Wall Street stocks ended lower on Friday as investors turned cautious before this week’s Fed meeting, while a warning from Broadcom on slowing demand weighed on chipmakers and added to U.S.-China trade worries.[.N] “The week ahead is likely to provide some clarification for investors on three fronts that have been a source of uncertainty. The FOMC meeting, with updated forecasts, is center stage,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.
China’s FedEx probe should not be seen as retaliation
China’s investigation into FedEx Corp over misdirected mail should not be regarded as retaliation against the U.S. company, state news agency Xinhua said on Sunday, amid worsening relations between China and the United States. The inquiry was aimed at sending a message that any economic entity in China should abide by the country’s laws and regulations, it said in a commentary. “China is willing to share the opportunities in its courier market with foreign investors. Undermining Chinese clients’ legitimate rights and interests, however, is not acceptable,” Xinhua said. China launched an investigation into FedEx Corp on Friday over parcels delivered to the wrong address, without giving details about the deliveries in question.
ADB distances itself from govt’s budget support claim
In a rare rebuff, the Asian Development Bank (ADB) on Sunday distanced itself from a Pakistan government announcement about provision of $3.4 billion budgetary support by the Manila-based lending agency. On Saturday, two senior members of the government had announced that the ADB would provide $3.4bn budgetary support to Pakistan to help the latter implement its economic reforms and stabilisation. The announcement was first made by Planning and Development Minister Makhdum Khusro Bakhtyar at a news conference and then reconfirmed by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh through his official Twitter account after a meeting with two senior officials of the ADB. Dr Shaikh had said the ADB would provide $3.4bn in budgetary support to Pakistan after he had a meeting with Werner Liepach, the ADB director general. He said the meeting had agreed on an ADB programme. “The ADB will provide $3.4bn in budgetary support to help with reforms and stabilisation of the economy.”
Incentives to boost tech usage in export sectors
The government took several facilitation measures to incentivise use of technology to boost exports from the country. Through the Finance Bill 2019, the government has reduced retention period from 10 years to 5 years of plant, machinery and equipment brought under export facilitation schemes. After this amendment, now if export-oriented units intend to dispose of their machinery prior to the period of five years, further option is made to pay duty and taxes against the different depreciated rates after three years. This facility is also extended to units operating within export processing zones. Moreover, it has also been decided to revalidate the licences of export-oriented units for two years.
ADB to provide $3.4bn loan for budgetary support
The Asian Development Bank (ADB) would provide a loan of $3.4 billion to Pakistan for budgetary support, said federal Minister for Planning, Development and Reforms Khusro Bakhtiar as well as Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh on Saturday. The news was broken by Mr Bakhtiar who told a press conference that an agreement had been reached between the ADB and the finance ministry in this regard. Of the total amount, $2.1bn would be released within a year of the agreement. When asked to explain the terms of the loan, the minister only said it was “on a concessional rate”. Later in the day, Dr Shaikh took to Twitter to confirm the development. “The ADB will provide $3.4 billion in budgetary support,” he said in his tweet. “$2.2 billion will be released this fiscal year (FY), starting in the first quarter of FY 2019-20. This will help the reserve position and the external account.”

The Benchmark KSE100 Index have tried to penetrate its major resistant region of 35,500 points during last trading session but have not succeeded in doing so but daily momentum indicators have succeeded in generating a bullish crossover which would try to lead index further advance and if it would succeed in closing above 35,500 points today then a short term spike would be witnessed which would push index towards 36,300 & 37,500 points. While on flip side index would find supports at 35,081 and 34,500 points in case of any pressure. It's recommended to post trailing stop loss on long positions until index close above 35,500 points.