PSX Daily Market Review - 18th March 2019

Trading volume at PSX floor increased by 43.6 million shares or 50.78% on DoD basis, whereas the benchmark KSE100 index opened at 38,799.91, posted a day high of 38,839.01 and a day low of 38,187.48 points during last trading session while session suspended at 38,306.95 with net change of -501.66 points and net trading volume of 100.36 million shares. Daily trading volume of KSE100 listed companies increased by 41.47 million shares or 70.41% on DoD basis.
Foreign Investors remained in net buying positions of 0.28 million shares and net value of foreign inflow increased by 2.08 US Dollars. Categorically, Foreign Corporate Investors remained in net buying positions of 2.61 million shares but Overseas Pakistanis remained in net selling positions of 2.34 million shares. While on the other side Local Individuals, Mutual Funds, Brokers and Insurance Companies remained in net selling positions of 0.64, 3.41, 2.47 and 3.29 million shares respectively but Local Companies, Banks and NBFCs remained in net buying positions of 3.66, 5.42 and 0.56 million shares respectively.

Asia shares, bonds underpinned as Fed seen accommodative
Asian shares pulled ahead on Monday while bonds were in demand globally on mounting speculation the U.S. Federal Reserve will sound decidedly dovish at its policy meeting this week. Japan's Nikkei .N225 led the way with a rise of 0.56 percent, and MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.35 percent. Shanghai blue chips .CSI300 firmed 0.8 percent, while E-Mini futures for the S&P 500 ESc1 were a fraction lower. The S&P 500 boasted its best weekly gain since the end of November last week, while the Nasdaq had its best week so far this year.[.N] There is much talk Fed policymakers will lower their interest rate forecasts, or “dot plots”, to show little or no further tightening this year.
Letter of interest issued to invest $2b in Pakistan
The XCMG and HSS Group of China have issued a letter of intent highlighting their course of action to materialise its 2 billion dollars investment recently announced in Pakistan’s housing and manufacturing sectors. “This shows that the foreign investors have started reposing confidence in improving business environment of Pakistan due to investors’ friendly policies of the government, Special Assistant to Prime Minister on Overseas Pakistanis and Human Resource Development remarked while sharing this news with APP. Earlier, the delegation, representing two Chinese business giants, led by XCMG global sales president Dr Hanson Liu, Chairman HSS Syed Saman Hashmi has apprised Prime Minister Imran Khan of their desire to support the government’s public centric initiatives especially focusing low-costing housing facility and employment opportunities. He said XCMG and HSS Group’s Letter outlined a four-point agenda of the companies for formalizing its investment plan before converting it into a legal instrument.
Taxation laws termed complicated
Taxation laws in the country are not only very complicated but also contradictory to each-other, said Haroon Khawaja, the chairman of Pakistan Freedom Movement. Talking to party workers, Haroon Khawaja said the businessmen and industrialists are facing tremendous difficulties due to such complications and contradictions. “I am Chartered Accountant by profession and still I need many chartered accountants to deal with the taxation paradigm in order to carry out taxation responsibilities in an efficient manner,“ he said. He said that business community of the country has no role in formulating economic and taxation policies and their recommendations have no weightage in the domain of economy and taxation.
Medicinal imports up by 9.74pc
Pakistan imported medicinal product worth $656.092 million during the first seven months of current fiscal year, showing growth of 9.74 percent, when compared to the import of $597.844 million during the corresponding period of last month. According to the Pakistan Bureau of Statistics (PBS), Pakistan imported 13,781 metric tons of medicinal products during July-January (2018-2019) against imports of 597,844 metric tons during July-January (2017-2018), showing increase of 9.36 percent in term of quantity the PBS data revealed. On year-on year basis, the imports of medicinal product witnessed growth of 1.71 percent in January 2019, when compared to the import of the same month of last year. The medicinal imports during January 2019 were recorded at $82.115 million against the imports of $80.738 million in January 2018. On month-on-month basis, the imports of medicinal products decreased by 21.89 percent during January 2019, when compared to the import of $105.121 million during December 2018, according to the data.
Economy to grow at average 5.4pc in 5 years
The gross domestic product (GDP) is expected to grow at an average of 5.4 percent during the next five years, according to preliminary figures of 12th Five Year Plan (2018-23). The highest growth of 6.7 percent will be witnessed in fiscal year 2022-23, according to the provisional figures of the draft 12th Five Year Plan. The economy would grow at four percent during the current fiscal year (2018-19), followed by 4.6 percent growth rate in FY 2019-20, 5.5 percent growth in 2020-21, 6.2 percent in 2021-22 and 6.7 percent in 2022-23. At average, the economy would grow at the rate of 5.4, according to draft of the Five Year Plan. The break up figures reveal that the agriculture sector would grow by 1.9 percent during the current year followed by 3.2 percent growth in 2019-20, 3.7 percent in 2020-21, 3.9 percent in 2021-22 and four percent in 2022-23. At an average, the agriculture sector would grow at 3.3 in next five years.

The Benchmark KSE100 Index have slide below its major supportive region of 38,500 points on weekly basis during last trading session while daily momentum indicators have entered into bearish zone once again and it’s expected that index would be pressed further downward in coming days and it may find supportive regions at 37,600 and 37,000 points on short term basis. While on intraday basis it’s expected that index would try to bounce back to retest 38,500 points and if it would not succeed in closing above that region then a serious bearish pressure would be witnessed which may push it towards 37,600 points on intraday basis as well. It’s recommended to stay cautious while trading during current trading session because index would have to remain under pressure but an intraday spike may would try to attract investors for fresh buying but it’s recommended to post strict stop loss at fresh buyings.