PSX Daily Market Review - 1st Oct 2018

Trading volume at PSX floor dropped by 3.44 million shares or 2.30% on DoD basis during last trading session, whereas the benchmark KSE100 Index opened at 40,862.69, posted a day high of 41,047.08 and a day low of 40,622.11 during last trading session. The session suspended at 40,998.59 with net change of 146.79 and net trading volume of 98.75 million shares. Daily trading volume of KSE100 listed companies increased by 3.45 million shares or 3.62% on DoD basis.
Foreign Investors remain in net buying positions of 0.26 million shares but net value of Foreign Inflow dropped by 1.25 million US Dollars. Categorically Foreign Corporate remained in net buying positions of 0.33 million shares but Overseas Pakistanis investors remained in net selling positions of 0.07 million shares. While on the other side Local Companies, Banks, Mutual Fund and Insurance Companies remained in net buying positions of 1.05, 10.38, 5.71 and 3.11 million shares respectively but Local Individuals, NBFCs and Brokers remained in net selling positions of 15.89, 0.08 and 5.42 million shares.

Dollar rises amid false reports of steep devaluation
In the last three days the US dollar kept appreciating against the rupee and was trading above Rs127 in the open market. The market saw a panic-like situation on Saturday after a private TV channel ran a news that the International Monetary Fund (IMF) has asked to depreciate the rupee up to Rs150 against the dollar and the government has agreed to bring it up to Rs135.
Korean tyre maker enters Pakistan market
Tyre market may see an intense competition in coming days as South Korea’s second largest tyre manufacturer Kumho Tyre has sealed a deal with a Pakistani company -Century Engineering Industries - to transfer its tyre making technology for the next 10 years. Under the deal, the first of its kind for a Korean rubber wheel-covering producer, Century will pay $5 million to Kumho for transferring its basic tyre manufacturing technology, to make 28 different types of tyres for passenger and commercial vehicles till September 2028. The foreign company will also get 2.5 percent of Century Engineering’s annual sales in royalty fee for the next decade. According to insiders the contract will be renewed for another five years upon expiration.
Policy rate raised by 100bps to 8.5 percent
As some consolidation efforts are required to ensure macroeconomic stability, the Monetary Policy Committee of the State Bank of Pakistan (SBP) has increased the target policy rate by 100 basis points (bps) to 8.50 percent for next two months.
KP Govt completes 255 mini hydropower projects
The Khyber Pakthunkhwa Government has completed 255 mini macro hydro-power projects and work on 67 others were in full swing in 12 northern districts of the province to provide inexpensive electricity to people as per vision of Prime Minister Imran Khan. The KP government has also proposed seven mega projects for inclusion in CPEC include Mujigram-Shghor 64MW, Istaru Booni 72MA, Turen More Kari 350MW, Jamshill Turen More 260MW, Ghrait-Swir Lasht 277MW, Torcamp-Guddubar 409MW, Kari-Mushkur 446MW and power evacuation from Chitral to Chakdar through a transmission line that after completion would help arrest energy and water problems.
Govt asked to raise custom duty on clinker import Share:
Govt asked to raise custom duty on clinker import Share: Moreover, the industry also recommended that the imports of cement should not be allowed until the importers register themselves with Pakistan Standards and Quality Control Authority (PSQCA) to certify the quality of their cement in line with the Indian government as well as all other importing countries’ authorities, the industry representatives demanded. The industry stakeholders said that Pakistan has already lost a major chunk of its market in Afghanistan to Iranian cement. The high energy cost has made the cement more expensive as cement is an energy intensive sector.

PSO, DGKC, MLCF and MLCF would try to drad index in negative direction while ATRL, TRG and HBL along with KAPCO would try to resist against bearish momentum.

The Benchmark KSE100 Index is trying to bounce back in bullish direction after retesting its major supportive region since last two trading sessions but a clear breakout is not being happened. Index had succeeded in recovering above 40,800 points and has avoided an engulfing pattern on weekly chart but a dark cloud pattern has been created on weekly chart. Currently hourly and weekly momentum indicators have changed their direction to bullish side but daily stochastic and maorsi are still trying to create bullish crossovers. As of now index have major resistances ahead at 41,300 and 41,600 points but before these regions index would have to cross its 61.8% correction of its last bearish rally which fall on 41,093 points. It’s recommended to wait for a clear breakout of 41,093 points on hourly chart before initiating long positions otherwise selling on strength would be beneficial if index would not succeed in closing above 41,093 points on hourly chart. For buying positions it’s recommended to post stop loss at 40,660 points.
ATRL have supportive region ahead at 149 and it has chances of a pull back from this region. PSO have completed its 61.8% correction on weekly chart but as long it’s trading below 322 it’s recommended to initiate selling on strength with strict stop loss of 324 and cut and reverse would be recommended above this region. DGKC is caged in a triangle on daily chart and it’s recommended to swing between 97.60 and 105 until breakout of either side. Sliding below 97.60 will call for 91 and 89.30. TRG have supportive region ahead at 26.65 and a chance could be taken in buying with strict stop loss.