PSX Daily Market Review - 19th April 2019

Trading volume at PSX floor increased by 43.38 million shares or 25.10% on DoD basis, whereas the benchmark KSE100 index opened at 36,737.51, posted a day high of 36,919.95 and a day low of 37,419.36 points during last trading session while session suspended at 36,811.86 with net change of 59.29 points and net trading volume of 151.84 million shares. Daily trading volume of KSE100 listed companies increased by 28.75 million shares or 23.35% on DoD basis.
Foreign Investors remained in net buying positions of 6.69 million shares and net value of Foreign Inflow increased by 0.54 million US Dollars. Categorically, Foreign Individuals remained in net selling positions of 0.01 million shares but Foreign Corporate, and Overseas Pakistani investors remained in net buying positions of 5.50 and 1.21 million shares respectively. While on the other side Local Individuals, Banks, NBFCs, Brokers and Insurance Companies remained in net buying positions of 6.25, 2.14, 0.02, 1.93 and 0.92 million shares respectively but Local Companies and Mutual Funds remained in net selling positions of 8.55 and 8.91 million shares respectively.

Earnings deluge could make or break sentiment
Next week will go a long way in determining whether investors should be concerned about the dawning of an earnings recession or whether back-to-back quarters of negative growth can be avoided in what is the heaviest week for profit reporting by U.S. companies. A wide swath of S&P 500 sectors are scheduled to report next week, with 155 companies representing over $9 trillion in market capitalization in the queue, more than 35 percent of the total for the index. Heavy hitters Facebook and Amazon are due to report as well as a dozen Dow components such as United Technologies, Coca-Cola, Microsoft and Exxon Mobil. “The focus is going to continue to be on earnings and what the message is and so far the message hasn’t been that great,” said Ken Polcari, managing principal at Butcher Joseph Asset Management in New York.
PEACE Cable, Cybernet Pakistan ink agreement
A Cable Landing Party Agreement has been signed between PEACE Cable International Network Co., Ltd (PEACE Cable) and Cyber Internet Services Pvt Ltd (Cybernet Pakistan). This landmark agreement, signed on 16 April at Capacity North Africa in Cairo, follows a memorandum of understanding signed by both parties in 2018. Pakistan & East Africa Connecting Europe (PEACE) is 12,000 km long, privately owned cable system that provides an open, flexible and carrier-neutral services for its customers. PEACE is targeted for completion in Q1, 2020.The system design will adopt the latest 200G technology and WSS technology, which provides the capability to transmit over 16 Tb/s per fiber pair, servicing growing regional capacity needs. The PEACE cable system with landings in Pakistan, Djibouti, Egypt, Kenya and France --- in the first phase -- will connect the three most populated continents in the world, providing critical interconnection to the economic corridors of Asia, Europe, and Africa. A total capacity of 96 Tb/s will be added to Pakistan’s internet infrastructure.
Textile exports unchanged at $9.99b
Pakistan’s textile exports were recorded at $9.99 billion during nine months (July to March) of the ongoing fiscal year. The country’s textile exports had remained at the same level of previous year, showing no growth. The incumbent government had provided several incentives to the five exports oriented sectors including textile to enhance the country’s exports. The government had depreciated the currency and reduced the prices of electricity and gas but it failed to achieve the desired results.
Performance aside, Asad Umar's resignation ill-timed, say trade and industry leaders
Trade and industry leaders all said that the departure of the finance minister at this critical juncture was ill-timed, though many raised questions about his performance. “As finance minister, Asad could not control the economy and did not take trade and industry on board while framing policies. The economy can only be controlled if you know the ground realities,” said Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Daroo Khan Achakzai. The FPCCI chairman acknowledged that Mr Asad did consult the business community. “However, our suggestions were either blocked at decision making stage or were brushed aside by bureaucracy. The end result is there in the form of his resignation,” he said.
CAD jumps by 196pc in March
The country’s current account deficit during March climbed by 196 per cent month-on-month compared to February, according to latest data released by the State Bank of Pakistan (SBP) on Thursday. The central bank reported that the current account deficit in March was at $822 million compared to $278m in February. Cumulatively, the current account deficit has seen a gradual decrease of around 29pc during the first nine months of the fiscal year mainly due to import compression. The deficit during July-March fell by 29.4pc or $4 billion to $9.58bn against $13.589bn in the same period last year. However, despite shrinking current account deficit, the size of trade deficit remained as large as $23.84bn. The incumbent government, despite offering multiple incentives to the export-oriented sector, during the ongoing fiscal year, has failed to improve the country’s exports. The data provided by the SBP shows that exports increased by a meagre $267m during the nine months under review.

NCL, NML, STCL, ISL and EFOODS would try to lead the positive momentum on intraday basis, while BOP, ATRL and PPL would remain in laggards.

The Benchmark KSE100 Index have bounced back after getting support from a horizontal supportive region during last trading session and have formatted a hammer on daily chart but daily momentum indicators are still in bearish mode while a hope for bulls have been created on hourly chart because hourly momentum indicators have changed their direction in bullish side and these would try to push index in upward direction initially during current trading session. It's expected that index would try to take a spike in first half of current trading session towards 37,000 or 37,300 points but if it would not succeed in closing above 37,000 points on hourly basis then it would be push back which may lead index towards 36,500 points again. It's recommended to stay cautious with long positions and post trailing stop loss on long positions because today's closing below 37,000 points would add further pressure on index.