PSX Daily Market Review - 19th Sep. 2017

Trading volume at PSX floor dropped by 86.3 million shares or 43.13% , DoD basis, whereas the benchmark KSE100 Index opened at 42833.86, posted a day high of 42924.93 and a day low of 42489.69 during the last trading session. The session suspended at 42841.41  with a net change of 54.22 points and a net trading volume of 59.06 million shares. Daily trading volume of KSE100 listed companies dropped by 38.89 million shares or 39.71%, DoD basis.
Foreign Investors remained in net net buying position of 0.43 million shares and a net value of Foreign Inflow increased by 0.05 million US Dollars. Categorically, Foreign Individuals remained in net selling position of 0.4 million shares but Foreign Corporate and Overseas Pakistani investors remained in net buying position of 0.41 and 0.42 million shares. On the other side Local Individuals and Banks remained in net buying positions of 2.49 and 8.01 million shares but Local Companies, Mutual Funds, Brokers and Insurance Companies remained in net selling positions of 2.76, 0.91, 6.79 and 0.39 million shares respectively.

Asian shares slipped on Tuesday, supported by record highs on Wall Street but hobbled by uncertainty as traders awaited a Federal Reserve meeting for clues on U.S. monetary policy. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.1 percent after wobbling between positive and negative territory for much of the morning. Japan's Nikkei stock index .N225 surged 1.5 percent, catching up to global equities gains and responding to a weaker yen as Tokyo markets reopened after a public holiday on Monday. On Thursday, the Bank of Japan will also hold a regular policy meeting, and is widely expected to maintain the status quo as inflation remains stubbornly weak despite a modest economic recovery.
The Bank of China (BoC) has been allowed to commence banking business in the country, said the State Bank on Monday. This is the second Chinese bank which has been allowed to operate in Pakistan. Earlier, the Industrial and Commercial Bank of China (ICBC) opened two branches in Karachi and Islamabad on May 20, 2011. The ICBC provides various services including corporate finance, investment banking, foreign deposits, project loans, and working capital loans. “In Pakistan, the BoC aims to provide specialised banking services to serve the financing needs of China-Pakistan Economic Corridor (CPEC) related projects by leveraging on its experience and global technology platform,” said the SBP.
United Kingdom on Monday pledged to continue to support Pakistan to benefit from the EU’s GSP-plus scheme, as Pakistan assured UK to make progress in improving human rights, labor rights, environment and good governance. The UK has confirmed the continuation of Generalized System of Preferences plus (GSP-plus) incentives for Pakistan after Brexit. “As the UK leaves the EU, we recognize the need to ensure a smooth transition in our trading arrangements. The UK’s firm intention is to maintain these preferences on a bilateral basis, with the generous access to UK markets that it brings. Alongside that, whilst the UK is still a member of the EU, the UK will continue to support Pakistan to benefit from the EU’s GSP-plus scheme, whilst in return Pakistan pledges to continue to make progress to improve human rights, labor rights, environment and good governance in line with the commitments made as part of the GSP-plus scheme,” said a joint statement of UK Minister of State for Trade Policy Greg Hands and Minister for Commerce and Textile Pervaiz Malik.
FBR has stepped up its campaign of reaching out to big organisations and companies to boost the filing of income tax returns. A team of FBR's Facilitation and Taxpayers Education (FATE) Wing led by FATE Member Nausheen Javaid Amjad and FATE chief Tehmina Aamer visited the offices of Fauji Fertilisers Company Limited (FFCL) and held an extensive meeting with the company's chief executive and managing director Lt-Gen (r) Shafqaat Ahmed for seeking his assistance in promoting filing of income tax returns within the company. Nausheen informed the MD that FBR had compiled a list of over 50 large corporations, financial institutions and companies to be approached by FBR in days ahead to explain to them how a majority of their employees with taxable income had been failing to fulfill a national obligation by not filing their income tax returns despite contributing their due tax through deduction at source. Nausheen said FBR was aware of the organisations and companies diligently fulfilling their responsibility of reporting salary paid and taxes withheld from their employees.
The provinces are likely to face around 20 percent water shortage during the upcoming Rabi season, mainly due to reduction in rivers flows and early draw down from the reservoirs, it is learnt. “The water shortage is caused by less than anticipated flow in Jhelum and Kabul rivers and early draw down from the reservoirs,” a source told The Nation on Monday. The water flows in Jhelum was 14 percent less from the anticipated flows, while the river flows in River Kabul were also considerably lower than the anticipated flows, the official said. Resultantly, to meet the provincial demand, water is being released from the reservoirs. The release from the reservoirs is considerably reducing the reservoirs level and Tarbela dam level is decreasing by around two feet per day. The level of Mangla is also going down due the water release.

The market is expected to remain volatile today. We advise traders to exercise caution. Buying on dips and booking gains on strength is recommended.

The Benchmark KSE100 Index has a resistant region ahead at 43186 and breakout of that level will call for 43700 where Index will complete correction of its last bearish rally. That level might push index back in the negative zone therefore profit taking is recommended around these both regions. For the current trading session buying on dips and selling on strength is recommended. Index also has a weekly double top at 43173 which may try to react as resistance.