PSX Daily Market Review - 21st May 2019

Trading volume at PSX floor increased by 75.11 million shares or 83.11% on DoD basis, whereas the benchmark KSE100 index opened at 33,037.18, posted a day high of 33,322.39 and a day low of 32,352.40 points during last trading session while session suspended at 33,250.54 with net change of 83.92 points and net trading volume of 132.06 million shares. Daily trading volume of KSE100 listed companies increased by 68.74 million shares or 108.55% on DoD basis.
Foreign Investors remained in net selling positions of 6.42 million shares and net value of Foreign Inflow dropped by 0.47 million US Dollars. Categorically, Foreign Corporate Investors remained in net selling positions of 6.81 million shares but Overseas Pakistanis remained in net buying positions of 0.40 million shares. While on the other side Local Companies, Banks, Mutual Fund and Insurance Companies remained in net selling positions of 5.07, 8.89, 8.42 and 0.66 million shares respectively but Local Individuals, NBFCs and Brokers remained in net buying positions of 21.13, 3.14 and 4.28 million shares.

SBP jacks up interest rate by 150bps to 12.5%
The State Bank of Pakistan (SBP) on Monday aggressively hiked the key interest rate by 150 basis points to a 91-month (nearly eight-year) high at 12.25% in anticipation of acceleration of inflation under the International Monetary Fund’s (IMF) loan programme. The monetary policy committee at the central bank tightened the policy keeping in view the rising inflationary pressure due to rupee depreciation, potential increase in utility tariffs and an upward trend in prices of petroleum products and essential food items in the world markets.
Govt taking all possible measures to facilitate investors: Dawood
While welcoming the Bulgarian delegation, Advisor to the Prime Minister on Commerce Abdul Razak Dawood said that current government is taking all the possible measures to facilitate investors in various sectors of economy to attract more investments in the country. “Government is fully committed to introduce more business friendly reforms in the country to attract more investments” the Advisor said while talking to Bulgarian delegation, which was led by Deputy Minister of Economy Liliya Ivanova. The delegation is in Pakistan to hold 2nd session of Inter-Governmental Commission in order to enhance the trade and economic relations.
Pakistan’s total debt, liabilities rise to Rs35tr
Amid increasing discount rates that has now hiked to 12.25 per cent, Pakistan’s total debt and liabilities skyrocketed to Rs35.094 trillion till end March 2019 and its rising at supersonic speed in the wake of yawning budget deficit. In the first nine months (July-March) period of the current fiscal under the rule of incumbent regime, the total debt and liabilities went up by Rs6 trillion, increasing from Rs28.879 trillion in June 2018 to Rs35.094 trillion till end March 2019.
Oil import bill soars to $11.9 billion in ten months
Pakistan’s oil import bill has gone up by 4 percent to $11.9 billion during ten months (July to April) of the current fiscal year. The country’s oil import bill was recorded at $11.9 billion in July to April period of the year 2018-19 as compared to $11.4 billion in the corresponding period of the previous year, showing an increase of 4.01 percent. According to data from the Pakistan Bureau of Statistics (PBS), the import of petroleum products was recorded at $5.1 billion, petroleum crude at $3.8 billion and natural gas liquefied at $2.72 billion and petroleum gas liquefied at $222 million.
SBP warns of higher inflation next fiscal year
In a move that will doubtless trigger dismay across the business community, the State Bank of Pakistan (SBP) on Monday raised its policy rate by 150 basis points to 12.25 per cent, 50bps above market expectations. The bank cited rising inflation as well as expectations of future inflation driven by a weak rupee, widening fiscal deficit and potential adjustments to the utility tariffs as the key drivers behind the rate hike. The move follows a staff-level agreement with the International Monetary Fund (IMF) for a $6 billion bailout package, which is likely to be accompanied with tough conditions, including higher interest rates and commitments to roll over debts taken from China, Saudi Arabia and the UAE.

ISL, TRG, ASL, SSGC and ISL would try to lead the positive momentum.

The Benchmark KSE100 Index have formatted a hammer on daily chart during last trading session while daily momentum indicators have tried to change their direction towards bullish side but this sentiment would confirm once index would succeed in closing above 33,630 points, because closing above 33,630 points would create a morning star on daily chart which would strengthen current pull back. It's recommended to post strict trailing stop loss at long positions until index close above this level. As of now index have supportive regions standing at 32,800 and 32,500 points while on flip side index have resistant regions ahead at 33,630 and 34,000 points. If index would succeed in closing above 34,000 points on daily or weekly chart then next targets would be 36,800 and 37,500 points on short term basis. But index is about to complete 61.8% correction of its latest bearish rally and it needs to be cautious because if index would not succeed in sliding above this region then again a serious bearish pressure could be witnessed. It's recommended to stay cautious while trading during current trading session.